The consumer driven economy is for people who don't naturally automate things

Automation has never unemployed people, only persons. Specific categories of jobs are removed by automation, but these are replaced by other categories of jobs. Demand is created for the products of these jobs, and the whole machine keeps turning.

The consumer driven economy is built on artificial demand. The vast majority of 'stuff' bought is unnecessary. Without advertising and a culture that emphasises keeping up with the joneses we would see unemployment on a large scale, but our economy has adapted to fill the unemployment niches.

The real challenge is not how to prevent unemployment through automation. It is to find an alternate solution to artificially inflated demand which doesn't waste so much labor and materials producing goods and services which are strictly speaking unnecessary.

This isn't true, though people keep writing about it in various contexts: Babbage in the 19th C, and David Ricardo: http://en.wikipedia.org/wiki/David_Ricardo. The jobs people do change. No one in 1800 worked as a video-game designer or social media marketing specialist. Few people today work as farrier or milliners.

I have no idea what the book situation is like in China, but if you can, get a copy of Tyler Cowen's recent book Average Is Over.

5. Richer people will get richer. Poor people will get poorer.

The entire world has been getting richer for centuries, and in the last couple decades the world has seen unprecedented wealth creation due to the fall of Communism. See Cowen, noted above, or something like Why Nations Fail by Daron Acemoglu and James Robinson.

Yup, except why do the developers not get the income? Presumably they are selling the machines?

>4

Yes. The key with this kind of logic is to relate it to the current situation, though; people with more workers can afford even more workers. Why doesn't it all blow up now?

There is more to success than simply scale of manufacturing capability; firms need to keep ahead of competitors, keep up with technology, manage the whole stack, etc, and then they can end up controlling the whole market (at the thing they do) and having nowhere else to go because the firms in other fields have an advantage that takes something special to beat.

Also, the neat thing about capitalism is that money to buy more work is rarely the bottleneck, because you can get a capitalist to invest in your scheme (if it looks any good).

>5

The second thing (poor get poorer) does not necessarily follow. Only the people who can't do anything that machines can't do better get poor. The working poor have more buying power because the machines create more wealth for less money.

In practice, despite a lot of automation, we don't have many people unable to do anything productive; people are very much more versatile than machines (for now).

More on that: http://lesswrong.com/lw/hh4/the_robots_ai_and_unemployment_a...

>In the future (my crazy thoughts):

Yes, eventually the set of people who cannot do something that machines can't do better includes everyone, and everyone becomes unemployed. (Which looks pretty good, IMO; who likes working?). There are more serious problems than unemployment at this point, though.

At this point, why do you expect the machines to still be under the control of the capitalists? If the machines can do capitalism, etc better than capitalists, any wealth that ends up in the hands of an autonomous machine will eventually increase to eclipse the human capitalists as well. (And of course, meanwhile the machines are increasing in effectiveness because they are better at machine design as well).

This is called the "intelligence explosion" or "technological singularity" scenario, depending who you ask, and looks like bad news, unless we do some serious stuff to make sure the machines work to specifically benefit humanity instead of just continuing to find better and better ways to do whatever other task they were doing. (Better ways that eventually include overpowering humans militarily and melting us down for raw material).

If you want more info: http://intelligenceexplosion.com/

I'm going to go ahead and call you on that one. What you probably mean is that rich people will get a lot richer comparatively. There will be a wider gap on paper.

Those same machines have a tendency to make that paper gap more meaningless as time goes on. Bill Gates and I both get to ride in jet planes. Even the poorest people in developed countries live lives unimaginable to the rich of the past.

The question is: Would you rather be a poor man in a rich society or a rich man in a poor one?

This isn't to say that we don't need a better token of societal value than "an hour of labor" to face our own strange future, but I don't subscribe to the "Elysium" point of view.

Aside from getting in to the meta discussions here. I think automation is also an enabler as much as it also detracts from different kinds of labor.

I think it just means a temporary disruption in the short term, but a redistribution of skills in the long term.

One good example of this is one we're seeing now. It was Auto and industrial before where people had the most employment (at least as far as what had the highest quality of life).

This will (and is already) moving to technology. As it matures, it will become easier to teach and I hate to say it, but commoditize the work.

After that, money made will be based on combinations of value add not necessarily what skills you know.

At this point, you have intelligence explosion, and current economics means squat. The machine will take over the world, killing us all in the process (we're made of atoms it can use for its purposes, whatever they are).

Or it can build a paradise, if it has been programmed to do exactly that. Good luck with that, since it's not exactly easy to describe "paradise" with programmatic precision.

The article starts by talking about pointless consumer spending (convincing people to buy things they don't need). This is a net loss to society.

However, the article doesn't make any kind of distinction between pointless consumer spending and wise consumer spending and instead runs off on a totally unrelated tangent about automation (which certainly helps but isn't related to the macroeconomic effects of consumption).

The article totally ignores the fact that "wise" consumer spending is a significant benefit to everyone – i.e. when consumers are buying things they need or where the benefit of the purchase exceeds the effort input to earning the money. It also helps progress the economy when consumers are buying products that are new and innovative and make technology or business model improvements.