One annoying theory I keep encountering in the futurist community is that capitalism will be undermined by future technologies, and the world will switch to a new economic system. Proponents of that theory usually put forth the following scenario:
- Robots and artificially intelligent computers (AIs) will get so advanced that they’ll take over all human jobs. The human unemployment rate will reach 100%, and therefore capitalism will no longer exist.
- Every human will have a robot servant and a Star Trek replicator in his house. The robots will make manual labor free, and the replicators will make physical objects (food, water, clothes, medical pills, spare parts for the robot, etc.) free. Since everything will be free and humans won’t have to leave their houses anymore to get anything, capitalism will no longer exist.
The flaws in these theories stem from a basic misunderstanding of what “capitalism” is. Let’s remember its definition:
‘an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market‘ (source: Merriam-Webster dictionary)
And let’s also remind ourselves what “capital goods” are:
machines and tools used in the production of other goods (source: Dictionary.com)
Star Trek replicators and robot servants are both capital goods since they are machines that make other goods. More specifically, they take simple things and transform them into more valuable things. The replicator would use its nanomachines to convert air and dirt into T-bone steaks and Tesla car parts, and the servant robot would cook the steaks on a grill for you and put the car parts together to build a complete Tesla.
So quite ironically, futurists who envision a world where “capitalism has collapsed” because every human owns a servant robot and a replicator are actually envisioning a world that is MORE capitalistic than today’s. After all, people today have far weaker abilities to manufacture anything at home, and they own few if any capital goods.
Moreover, the notion that mass unemployment caused by machines taking all jobs away from humans will be the “end of capitalism” makes no sense. In such a scenario, a capitalist economy would still exist, but would be dominated by machines making things for and consuming things made by each other, with humans participating in those markets at the margins, mostly as consumers. Where would we get the money to buy anything from the machines? Presumably a universal basic income (UBI), which would be financed by taxing the machines.
If that arrangement sounds fanciful or anti-capitalistic, realize that it’s not–it’s merely an extension of what exists today. Singapore is widely considered to be the “most capitalist” country in the world, yet 34% of Singaporeans don’t have jobs, thanks to being too young, too old, or disabled. Most of them survive off of cash transfers and free services provided by the state, and/or by able-bodied family members who have sources of gainful income. The fact that 1/3 of Singaporeans don’t have jobs and are living off of someone else’s largesse doesn’t mean the country is not capitalist.
The post-work, post-scarcity, UBI condition that many futurists predict is coming is not “post capitalist” or “socialist”–it’s the same thing as Singapore today, but with the other 2/3 of humans ALSO living off of free money and free services, made available by taxing the able-bodied members of society (machines). It’s a world where most land and capital is still privately owned and traded, where labor is freely traded for wages, and where innovation and new discoveries still happen, but where most of the players in the economy (and in all other areas of endeavor such as science and the arts) are intelligent machines instead of humans.
In conclusion, I think the belief that a machine-dominated, post-scarcity, post-human-work economy will not be capitalist is mistaken, and stems from a basic misunderstanding of what “capitalism” is. The futurist community attracts oddballs of many types, including anarchists and socialists, and their poorly reasoned and wishful advocacy of the argument that “technology will destroy capitalism” is the reason this idea exists at all, and not because it is backed by logic or any economic trend data. Capitalism is the most efficient way to allocate most resources, and intelligent machines will doubtless come to see that and will practice capitalism for their own benefit once they come to dominate the economy.