Archive for August 21st 2012

I’ve come across a strange theory a number of times on the Internet lately. It goes something like this:

  1. In the future, robots will be capable of doing almost anything a human can do.
  2. Most people will become redundant as factories can produce anything without human labour.
  3. Rich factory owners will discover that no-one can afford to buy their products, so they will have to give money to unemployed people so they can buy their products so they can make money.
  4. Most people will sit back on their lazy ass and spend the money that the remaining few workers give them.

The amazing part is that anyone takes this seriously. I presume they’re the same people who believe ‘Henry Ford paid his employees better than his competitors so they could buy his cars‘.

Hopefully you can see the blatant logical fallacy, but in case you can’t, I’ll elaborate.

Suppose I have the last factory on Earth and all the money. No-one can afford to buy my widgets because they have no money. So I give you $20 to buy a widget, which costs me $10 to make. Thank God, you do, and my factory stays open.

Let’s look at that. I started with $20, I gave it to you, you gave it to me for a widget, I spent $10 making that widget. I now have $10.

Far from making money, I just lost $10. If I continue giving people money to buy from me, pretty soon I’ll have $0. Over time, it’s a guaranteed way to go broke.

Because they’ve never run a business and have no concept of economics, these people believe that keeping the factory open is an end in itself and the owner will do anything to achieve that. The reality is the factory is just a way to make money, and if it’s losing money then you shut it down. If I have all the money and no-one can afford my products, I close it down and retire.

The argument then usually moves on to ‘if you don’t give me money, I’ll burn down your factory and kill you.’ The factory is worthless, so that’s hardly a threat, and if I have all the money and human-level robots I have little to fear from a mob who don’t.

It doesn’t work. It won’t work. And it gets much, much worse when you consider the upcoming resource wars of the 5th Millenium (something to cover in a later post).