How will future capitalists survive?
Vivek Wadhwa’s July 27 column “The capitalism we need for our jobless future” painted a sobering view of the human costs (pervasive joblessness) of evolving technologies, such as robotics, that marginalize human labor. But he leaves holes in his neocapitalistic model otherwise intended as socioeconomic CPR.
First, absence of any net bottom line analysis for the consumption side of the classical economics calculus. Who will buy the expanding inventory of goods efficiently produced by robots? Where will unemployed consumers of this abundance get the money? Where will governments get the tax revenue for infrastructure, social safety nets, other functions? Can the storied 1 percent acquire wealth from the production side while maneuvering through the devastated 99 percent consumption side? The moneyed mandarins can’t increase their own consumption by 9,900 percent.
A second hole is neglect of two simple realities: Developing economies will do well with the production side, but developed societies including the globe’s sole remaining superpower will do lousy on supporting the consumption side. Second, developed societies consume more than developing ones, and they have more political savvy and power to amputate the invisible hand of the market.
A vast army of the unemployed in a superpower with nukes is not a prescription for global stability or perpetuation of wealth inequality favoring the 1 percent.