Can Capitalism Survive High Degree of Automation? A Comparison with Thomas Piketty's Argument
9 Pages Posted: 3 Feb 2015
Date Written: February 2, 2015
There is growing recent debate whether we are witnessing the phenomenon of technological unemployment caused by increasing automation in all spheres of economic activity, unemployment that is distinct from cyclical unemployment, or structural unemployment caused by trade and globalization, or even that existing in the form of reserve army. In other words, has ‘the Luddite moment’ arrived, even if 200 years late? If the growing trend of automation continues, what are then its implications for the average worker? If high levels of automation render huge mass of people unemployed, without incomes, can capitalism that needs generation of increasing profits survive? High levels of automation imply greater production, but who will purchase this output if vast majority of people do not have wage incomes? One implication of this increasing robotization of production is that the owners of robots will have a very large share of income in the economy. How different or similar is this case of automation-induced rising income inequalities in society from the scenario painted by Thomas Piketty’s recent study focusing on capital (wealth) inequalities? What are the implications of these very powerful and intriguing arguments? These issues are explored in my paper.
Keywords: Automation, Capitalism's Survival, Piketty's Argument
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