Post-labor economics: Will capitalism work when the robots take over?

Post-labor economics: Will capitalism work when the robots take over?
The fundamental balance between people, government and capital will be radically altered in a post-work society
The fundamental balance between people, government and capital will be radically altered in a post-work society
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The fundamental balance between people, government and capital will be radically altered in a post-work society
The fundamental balance between people, government and capital will be radically altered in a post-work society
Stripped of our occupations, humanity may move forward into a new age of leisure
Stripped of our occupations, humanity may move forward into a new age of leisure
Leaving the age of labor behind
Leaving the age of labor behind
AI and automation promise a new era of hyperabundance
AI and automation promise a new era of hyperabundance
The role of government in providing basic needs will need to be greatly increased
The role of government in providing basic needs will need to be greatly increased
A post-labor age places unprecedented power in the hands of capital
A post-labor age places unprecedented power in the hands of capital
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There's a non-zero chance that human labor and intelligence could be surplus to requirements in the mid-to-near future. That would entail a seismic shift in the balance of power and the way societies and economies function. Let's discuss some ideas.

There are plenty of people who think this whole AI revolution thing isn't what it's cracked up to be, that it's a storm in a teacup and another in a long list of technologies that won't deliver on the hype. Indeed, there's one in our team here at New Atlas, and I've asked him to out himself and put together a case for the negative, which I'm eager to read.

But there's plenty of others, myself included, that see this as the start of the greatest technological revolution humanity has ever seen. Today's multimodal AIs are already wildly capable in so many areas, and they're improving at a rate neither I nor Elon Musk have ever witnessed with any other technology. They're coming full speed for white-collar and creative jobs that would once have been thought of as untouchable. The kind of shocks that OpenAI's Sora has sent through the entertainment industry have been coming thick and fast in a huge range of employment categories.

Blue-collar workers can afford to be smug for a little while, but as varied and physical as their work is, AI is coming for that too. The advances made in humanoid robotics over the last few months make it clear enough to me: AI models project to be just as proficient at learning their way around a body, a tool box and the physical world as they have been at more or less anything else they've been given the data, the compute and the time to get their heads around.

For the first time in human history, there's a non-zero chance, and maybe even a probability, that the vast majority of human work might simply not be needed within a decade or two – and a real pathway to get there, that multiple multi-billion dollar companies are pushing toward with all their resources.

Stripped of our occupations, humanity may move forward into a new age of leisure
Stripped of our occupations, humanity may move forward into a new age of leisure

If AI does what it says on the tin, this won't be like the agricultural revolution, the industrial revolution, or the information revolution, where we'll just move to different jobs. The promise of embodied AGI is that it'll simply be better at us at whatever there is to do, as well as much faster, cheaper and more reliable. The value of both intelligence and physical work could well drop to nearly zero.

This fundamentally changes society – but how? Does capitalism hold up when all the labor power is owned and deployed by a few giant companies? What is the role of the individual? What do we do with ourselves, particularly given that AI has proven shockingly competent in the creative arts? What happens to money, and what the hell should governments be doing to prepare for the possibility of such upheaval?

Independent AI researcher and YouTuber David Shapiro has dressed up in Star Trek gear and taken a stab at building an economic picture of a post-AI world, which he describes in detail in the 35-minute presentation below.

Post Labor Economics: How will the economy work after AGI? Recent thoughts and conversations

Shapiro outlines some interesting ideas, which I'll attempt to summarize below if you don't have time to watch the full video. I was looking into finding the right people to interview on this topic, but Shapiro provides a nice place to start from, extrapolating forward from the premise that AIs indeed live up to the hype, and they don't immediately take over or decide to eliminate biological life.


If intelligence and labor become incredibly cheap, a snowball of productivity could be unleashed. AGI-speed advances in science, technology, commerce, communications and robotics could start making extremely quick and efficient use of energy and resources, creating businesses that are capable of scaling in unprecedented ways. Add unlimited robotic labor to the mix, and the sheer amount of stuff that gets made promises an age of hyperabundance.

AI and automation promise a new era of hyperabundance
AI and automation promise a new era of hyperabundance

Price collapse

All that supply could crash prices more or less across the board. Not everywhere, though; land remains finite and increasingly valuable, but goods and services, and even a lot of companies, simply won't be worth that much.

Reduced aggregate demand

For commerce to function, companies need buyers to sell to. But if a large proportion of humanity can't earn money from work, unemployment threatens a huge drop in demand. So Shapiro believes there are incentives beyond the torch and the pitchfork at both the private sector and government levels to redistribute profits, whether through a universal basic income model, through a "negative tax" in which any productive human work is rewarded by the government, through universal basic services, or through some other model.


Global commerce could be fundamentally changed when the cost of robotic labor is just the same in the Phillipines as it is in Switzerland. A rationalization of manufacturing could make sense, in which most goods are manufactured locally to reduce transport costs and emissions, and to provide tailored products on demand.

Despecialization and bespoke products and services

The companies that own the best AI models needn't necessarily specialize. In the digital realm, there's no reason why a company shouldn't offer legal services, financial services, websites, custom music, custom TV shows and movies made to order, and bespoke VR experiences and games. These things are already starting to happen. But physical manufacturing companies too may become more about their means of production and available source materials than about the final products they're known for. Tell 'em what you want, and they'll make it.

Leaving the age of labor behind
Leaving the age of labor behind

Industry survivors

Shapiro projects that certain sectors will survive where others wither away. Robotics and automation, of course, as well as semiconductor production, raw materials, and a huge ramp-up in clean energy generation. In the coming gold rush, look for the guys selling shovels. But in a post-labor world, 'experience industries' could also thrive, offering people things to do with all their time. Hospitality, luxury goods, personal services and other 'uniquely human' industries will experience increased demand.

Industry extinctions

On the other side of the ledger, Shapiro sees an AI revolution leading to radical extinction-level shifts in areas like healthcare. Advances in longevity research could put a bullet in aged care. The human education system will struggle to compete against the personalised attention and gamification that AI can provide – and indeed, in a post-work world, the entire reason underpinning much of education is set to change radically. The insurance and superannuation industries will likely be fundamentally restructured. And as far as media and entertainment goes, Shapiro doesn't see much hope for companies the size of Disney once anyone can create a movie or VR experience at low cost, although live entertainment performances may well become a growth industry.

The role of government in providing basic needs will need to be greatly increased
The role of government in providing basic needs will need to be greatly increased

Step one: A primary needs-based economy

The first challenge for governments in a post-work era will be to reorient their systems to make sure everyone's basic needs are met: Food, water, shelter, clothing, energy, healthcare, infrastructure, communications – that sort of thing. Some of this could well be aided by a hyperabundance-level price collapse, driving the basic cost of living way down. Other parts – land for housing, for example – might go the other way. But this stuff needs to be handled with equity and dignity at a population-wide scale even as employment begins to collapse.

The post-wealth status game

Humans have a great need to measure themselves against other humans. Wealth and conspicuous consumption have been relatively recent social status signals in the development of our species, and Shapiro sees a return to a much more diverse set of ways for people to elevate themselves. Through relationships and social standing. Through creative skills like musicianship and artistic expression. Through knowledge. Through athleticism and physical attractiveness. All these hierarchies already exist, and it'll be interesting to see what happens when they become our key point of productive focus.

A new social contract

The most frightening issue, in Shapiro's view, is the balance of power, which is now in some kind of unequal but stable balance between business owners, governments and citizens around the world. Workers stand to lose the sole bargaining chip that has got their needs and desires onto the table at all: their work, and by extension their contribution to a national economy and value as a citizen. As we transition to a post-labor era, the current balance of power will swing dramatically toward the owners of the new workforce.

Instead of mediating the relationship between business and labor, the role of government will need to shift, eventually nearly all the way to becoming solely the advocate of humankind as the power of the automated business sector grows. This could be easier said than done; robot overlords won't just be able to mobilize labor at scale, they'll easily be able to mobilize violence at scale in ways previously reserved for governments.

A post-labor age places unprecedented power in the hands of capital
A post-labor age places unprecedented power in the hands of capital

The only way a new equilibrium can be found and a new social contract forged is through extremely robust regulations and anti-corruption laws – two concepts that have had widely varying degrees of success wherever they've been tried. Citizens will need new powers – and in an ideal outcome, Shapiro says the foundation of these powers could weirdly lie in our ability to withhold consumption and demand, rather than withholding labor.

"Honestly, changing the narratives around money and around democracy is probably the hardest part of this," says Shapiro. "We've got lots of tools in the financial toolbox in terms of monetary policy and fiscal policy, however, in America, our narratives around the ownership class, around wealth, around privilege, around the elites, that is probably going to be the biggest sticking point. Because a lot of people are 'temporarily embarrassed millionaires,' saying things like 'protect the millionaire class, protect the corporate class at all costs.' They don't need any help. They're fine.

"We need to change the focus from the engines of productivity," he continues, "to us. I'm not talking about radically restructuring the entire economy, but we need to change something."

Clearly, Shapiro has a point of view on all of this, and this could fairly be described as an optimistic take. I recommend watching the video in its entirety if you can, I certainly haven't covered all the ideas in this piece.

It's probably unfair to hold up one thinker's ideas for scrutiny rather than broadening this piece to provide alternatives, but I think it's an important conversation to begin having at a species-wide level. So let's play the ball, not the man, and discuss where these ideas might hit and miss in the comments section below.

How do you think a post-work society might function?

Source: David Shapiro

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Anders Ramhed
Great topic to write about. Thanks for that! Maybe it's a good thing that it will go quickly because if politicians had kept up with the pace of change, they would make sure to create even more new jobs that are not needed. Smart people - lets create an exit strategy!!!
Answering to Mr. Blain question. We must go from A to B. Description of the B part is easy. For example Iain Banks answered it with his Culture novels. Essentially hyperinteligent machines CONTROL in a gentle tiranny the humanity (sometimes disguised as just manipulation). That´s a good situation if machines "like" us.
The difficult part is the path from A to B. Nobody has explained it (in SF at least, except some brushstrokes of "history").
I suppose -due to our biology and way of thinking- there will be violence until some strange equilibrium is reached.
There are a lot of variables: physical resources, people, knowledge, governments, corporations, war industries, weapons and climate change.
We´re going to live interesting times.
Faint Human Outline
The events may lead to parallels of the paradise for rats. If willing, the world has the potential to be a world free of needless suffering, but is conflict inevitable? Will we keep repeating the same patterns of striving, seeking, acquiring, even when it is no longer needed? How will we define progress when there are no more achievements? Hopefully we will not regress as a species.
This is quite a lot to consider (good job, Shapiro!) and quite a lot to summarize (good job, Blain!). As noted, transitions are never smooth, and those with money are not going to voluntarily cede their wealth. Capitalism had a good 3,000-year run, and the best thing we can do is think through and plan for the uneven move away from it.
How will this affect desire to have children? We're well past the age of needing lots of children to work the farm and provide for the parent's old age, or to marry the children off for benefits. If there aren't opportunities for children to "make their parents proud", that's not a factor either. For humans that have a need to nurture, that might be provided by pets, artificial babies (no fuss, no mess, and you can put them on standby anytime), or nurturing new AIs. Population decline needs to be taken into account.
If you think the oncoming transition will end in a post-labor paradise, you have not examined the history of capital vrs. labor conflict. The governemnt cannot be relied upon to smooth the path. Read the Wiki page on the Ludlow Massacre. Key takeaway: Mine hired militia teamed up with the Colorado National Guard to murder 21 men, women, and children. One Guardsman died. 408 strikers were arrested, 332 indicted for murder. 22 Guardsmen court martialed, not one member of Guard or militia convicted of obvious murder.

Musk and Bezos would do exactly the same if they thought they could get away with it.

The following is not a partisan comment. I propose a sincere research effort at replacing government with AI. Only when the leadership feels their own livlihood threatened will they make any moves in conflict with their corporate masters.
Don Soards
I've defined the problem and solution in "Progress Dollars from the Production Parabola" and "Maximum UBI" by Don Soards.
Great article but if AI intelligence and robotic labor will be abundant and cheap I'd buy them and use them for my life. AI experts working for me to help plan and run my life: financial, health, filtering out the internets troll', scams, clickbait etc., even reading and understanding things like EULAs. All this and more in the context of having my best interests as a goal. Then you add robotic labor to maintain my home, and even improve it with growing some food, adding energy capture and other projects. Projects made with 3D printed items and as few traditionally manufactured items as possible.
All this with the kicker that once my life has been properly sorted I'm cruising along on all these goals I will hit a situation where the AI and robot will have some extra time where I can lend/barter the service/rent them out (cheaply) to my community for my benefit.
A community of people like this would be very independent, resilient and ultimately not need mega corps to do as much and that would swing the power back to people.
AI only intensifies the problem of job loss that we were headed to through automation. One example is autonomous vehicles. Once the majority of vehicles drive themselves:

No more cab or ride share drivers
No more truck drivers
No more traffic police
No more traffic courts
No more municipal revenue from traffic violations
No more traffic court judges
No more attorneys required for traffic court
No more "truck stops" and other businesses that cater to truck drivers
Diminishing needs for traffic infrastructure such as lights and signs

I'm not thinking of all of them and this is from one single disruptive technology.

Generalize that through AI and robotics and you have a world in which the value of most kinds of human labor is diminished. This is not a trend that is likely to stop. In the short term since it will bring costs down it will accelerate. It might not be until it is too late for other than a revolutionary change that we realize this.

There is an evolutionary approach, however. Right now (in the US) we tend to think of a 40 or so hour work week. Perhaps, for the same overall compensation, that needs to start trending downward to match what is being fulfilled by automation. It isn't crazy to see 40 replaced by 10, or even 5. As this happens, demand will increase in the hospitality industry but with the gigantic labor pool, that demand won't make a dent in labor requirements vs availability.

The time to start thinking and planning is now so that we don't get caught off guard. We can see the future if we look. Now we need to plan for it.
I think this assumes humans are 'in control' with regards to being the apex animal on Earth. If we are not, and simply a means to an end...the large human population may not be needed?

@LordInsidious, where will you get money to buy AI/robots?
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