The Robots Can Take Our Jobs, But They Can’t Take Our Economy

There’s this rather peculiar idea floating around about artificial intelligence suggesting that while it might drastically increase productivity, it could also leave a vast number of people without jobs or the means to access what they need. This prediction seems, well, a bit off, doesn’t it?

The essence of the AI Economic Apocalypse Theory (AI EAT) is kind of alarming. It posits that machines will start off by taking over cognitive jobs, but over time, they’ll handle everything from food production to services currently done by humans—doing it all with exceptional efficiency. This would lead to an extreme accumulation of wealth among those who own these machines, while the average person, having been pushed out of the job market, would lack the buying power to enjoy all this newfound bounty.

However, there’s a bit of a contradiction here. How is it that we can be in a scenario of such massive production yet also be innately excluded from accessing it? We’re told we’re heading toward a future filled with abundant goods and services, yet it’s painted as one where most individuals are deprived of these essentials.

This isn’t just some random speculation; many believe this—including some people working in AI companies.

The crucial question missing from this narrative is: why would individuals with needs, skills, and resources suddenly stop exchanging goods and services? Seriously, why would we choose to be idle when we know our neighbors and friends rely on what we can supply?

Now, the argument can’t be that the job market disappears because AI handles everything at lower costs. If that were the case, we wouldn’t enter a dystopian world of deprivation; rather, we’d have a reality filled with such an abundance that there’s hardly any work left for us to do.

AI Productivity Can’t Create Mass Deprivation

Let’s dig deeper into this. Say the owners of automated businesses decide to keep everything for themselves or set prices so high that most people can’t afford them. It resembles some perverse version of Atlas Shrugged, with those in control retreating into their wealth while the rest of society suffers without jobs or access to goods and services we currently enjoy.

Yet even in such a bleak scenario, people would still require food, shelter, clothing, transportation, education, and entertainment. They would still possess their skills, tools, and the ability to coordinate production. Being locked out of the benefits of AI abundance wouldn’t erase the fundamental economy we have; it would still demand workers. The wealthy owners might find themselves with little purpose, but there would be ample opportunity for everyone else.

Part of the oversight here is the assumption that companies and bosses are the primary source of jobs and goods. In reality, companies are just intermediaries between the supply of labor and the demand for it. If AI companies were to dismiss all their workers and hoard the output for themselves, new entrepreneurs would step in to fill the void, organizing resources to meet demand.

In essence, companies don’t create labor demand; they facilitate it. Human needs drive economic activity. If someone possesses a better machine yet controls its output, that doesn’t negate the exchange of services. Even when one option becomes unavailable, people still find ways to meet each other’s needs.

Now, consider if automated businesses provided their products at prices that undercut human producers. Sure, some jobs may vanish, and incomes could dip. Yet, the goods and services previously provided by those jobs would become significantly cheaper, increasing overall purchasing power alongside the job displacement.

The economic apocalypse narrative hinges on the notion that cheap automated products somehow eliminate human competitiveness, yet conveniently ignores this cheap output when discussing living standards. This isn’t just a remote possibility; it’s an outright contradiction.

Humans Are Not Horses

Occasionally, advocates for the AI EAT reference the fate of horses after combustion engines and mass production took over. The claim is that since cars and tractors eliminated the working horse market, humans will likely face a similar fate when machines can replicate our roles.

But here’s the thing: we’re not horses. Horses had a limitation that humans do not—they couldn’t trade with one another. When the demand for horse labor plummeted, they had no way to establish their economy. If human labor becomes redundant due to AI, it doesn’t mean we lose our abilities to exchange goods and services among ourselves. We would still be capable of fulfilling each other’s needs, thereby creating our own economy.

To put it differently, the horse economy existed to serve human needs. Once horses were deemed unnecessary, they were in trouble. Our economy, conversely, is fundamentally about meeting those needs. If AI doesn’t utilize us and fails to provide everything, we can still support each other. The horses didn’t have that option.

If we push the abundance assumption far enough, the implications can be startling. If basic necessities cost next to nothing, individuals need considerably less income to fulfill their needs. Reduced wages don’t necessarily equate to diminished living standards. What truly matters is the purchasing power of those wages.

Sure, it’s possible that those who own capital could become significantly richer, while ordinary households enjoy improved comfort. This might enhance the income disparity, but do we genuinely care? The increase in productivity benefits everyone. If an AI magnate wants to live in a lavish fortress run by robots, that shouldn’t concern the rest of us as it doesn’t align with the fearful predictions of the AI EAT scenario.

Sorry Humans, You’ll Probably Still Have to Work for a Living

Let’s be honest; it’s unlikely we’ll achieve a state where all our desires are met at minimal cost.

In situations where goods and services remain costly or out of reach, there will always be an incentive for people to provide them. Where automation reduces costs, households have the freedom to spend on other things. Aspects like human interaction, personal services, craftsmanship, and experiences continue to hold value. New desires can arise once our fundamental needs consume less of our income.

In fact, human labor may become even more valuable in a scenario of abundance. With essentials easily supplied, people might choose to reduce their working hours. As economists put it, our “reservation wage” might soar because the value of leisure increases. This reduced labor supply would make those who are still working more valuable, leading to high demand for handmade goods and personal services, turning them into luxury items for the affluent.

A common concern is that a workforce comprised of artists, caregivers, or skilled crafters won’t provide sufficient employment for everyone at satisfactory wages. But satisfyingly high for what? The current living standards shouldn’t be our reference point in an economy dramatically shifted by abundance. How could an income that may seem modest today, in a transformed economy, support a comfortable lifestyle if essentials became significantly cheaper?

And if abundance eventually gives us more time for leisure activities like fishing, reading, or singing together, that’s a positive sign of productivity’s benefits.

For the moment, people don’t show any signs of running short on desires. So, it seems we’ll likely keep finding reasons to work together.