There is an often-told story about Henry Ford II and Walter Reuther, the legendary head of the United Auto Workers union, jointly touring a recently automated car manufacturing plant. The Ford Motor Company CEO taunts Reuther by asking, “Walter, how are you going to get these robots to pay union dues?” Reuther comes right back at Ford, asking, “Henry, how are you going to get them to buy your cars?” While that conversation probably never actually took place, the anecdote nonetheless captures a key concern about the ultimate impact of widespread automation: workers are also consumers, and they rely on their wages to purchase the products and services produced by the economy.
A rather short anecdote, that is obviously not true, but one that I found to encapsulate extremly well the essence of the dangers of widepsread automation and jobs loss.
A strong economy relies on sustainable consumption within the consumers, and most developed economies have benefited from having a strong middle class that had enough incomes to spend in the past few decades. If technology does indeed continue to drive further inequality, our economic performance will definitely begin to suffer.
That is when the “doom and gloom” scenarios come in, and solutions such as cash transfers from the rich to the poor via taxation and welfare will probably need to happen.
