Words&Dirt

“‘You see, Princess Nell, you have conquered this world today, and now that you have conquered it, you’ll find it a rather boring place. Now it’s your responsibility to make new worlds for other people to explore and conquer.’ King Coyote waved his hand out the window into the vast, empty white space where once had stood the Land Beyond. ‘There’s plenty of empty space out there.’”

––The Diamond Age: Or, a Young Lady’s Illustrated Primer, by Neal Stephenson, loc. 7446

“A worker is also a consumer (and may support other consumers). These people drive final demand. When a worker is replaced by a machine, that machine does not go out and consume. The machine may use energy and spare parts and require maintenance, but again those are business inputs, not final demand. If there is no one to buy what the machine is producing, it will ultimately be shut down. An industrial robot in an auto manufacturing plant will not continue running if no one is buying the cars it is assembling.

So if automation eliminates a substantial fraction of the jobs that consumers rely on, or if wages are driven so low that very few people have significant discretionary income, then it is difficult to see how a modern mass-market economy could continue to thrive. Nearly all the major industries that form the backbone of our economy (automobiles, financial services, consumer electronics, telecommunications services, health care, etc.) are geared toward markets consisting of many millions of potential customers. Markets are driven not just by aggregate dollars but also by unit demand. A single very wealthy person may buy a very nice car, or perhaps even a dozen such cars. But he or she is not going to buy thousands of automobiles. The same is true for mobile phones, laptop computers, restaurant meals, cable TV subscriptions, mortgages, toothpaste, dental checkups, or any other consumer good or service you might imagine. In a mass-market economy, the distribution of purchasing power among consumers matters a great deal. Extreme income concentration among a tiny sliver of potential customers will ultimately threaten the viability of the markets that support these industries.”

––Rise of the Robots: Technology and the Threat of a Jobless Future, by Martin Ford, pg. 197-8