Sometimes it helps to understand a concept by considering what would happen in the extreme. Suppose, for example, what would happen if technology allowed us to do all normal work without human interaction. The first objection to such an assumption would be that this is impossible. Some human interaction would be needed to monitor the automated system. But, let’s take that up later.
In a society, there are people that are employed or whose time must be devoted to work, and those who live off investments. Of course, those who live off investments must monitor their investments just as there must be people to monitor a fully automated system. But, again lets take that up later.
For the moment, the question is, who should reap the rewards of a fully automated system? Should all share equally in them, or do some deserve more than others. Should those with greater needs, such as people with larger medical expenses be allotted more than people without such needs? Should people who are talented and admired by people for their personal traits be allotted more? Should people who are already wealthy get less than people who are not? These are questions that must be answered when faced with the prospect of a fully automated system.
We can now draw parallels with what is happening in the society now, that is only partially automated. As robots have taken over many of the functions that people used to perform in the automotive industry, what has happened to the people that have been displaced? And, where have the rewards of greater automation gone. Have investors received most of the rewards, or have prices of the cars gone down so consumers can participate in the rewards. Judging by the rising inequality in the last several decades, the sustained or increased prices of automobiles, and the reduced incomes of displaced workers forced to migrate to other work, it appear investors and management have gotten the best of the deal.
Going back to our idealized automated society, obviously the people necessary to monitor the automated system must be compensated. And, investors must be compensated for the time they spend monitoring their investments. But, we have not answered any of the questions raised regarding how the rewards of automation should be shared. This is the dilemma was face in our current society and that we are not addressing. We seem content to just let the money flow to the people that are closest to the source and who control the process, namely investors and managers. Is it any wonder that wages have stagnated, capital has accumulated beyond the need for it, assets are bid up to artificially high levels, and average people are forced into debt to survive. The resulting assets and debt bubbles have burst and we are facing a collapse of whole system.
Isn’t it time to reconsider tax policy to balance the accumulation of capital with the need for it, and to address the need for a redistribution of income resulting from the rewards of automation? As we have seen, in the limit of full automation, we should all be better off, not just a few people who happen to control the process in getting to a more automated society.