Artificial intelligence and the future of capitalism

According to some predictions by 2029 the power of computers will rival that of the human brain. Whether or not this is an accurate prediction, it seems certain that eventually this will happen. While clearly this could have amazing implications in terms of economic productivity, it brings one question to mind - how will our capitalist economic system function at all? Capitalism is founded on a particular mechanism for the flow of capital. Capitalists employ workers, who produce products. In exchange the capitalists give the workers money. The workers then use that money to purchase the goods back off the capitalists. Thus there is a cycle of cash flow. The advancement of machinery has already made many jobs of manual labor redundant. As a result modern Western economies are founded on intellectual capital rather than manual labour capital. When the intellect of computers matches that of humans, this will render the remaining intellect-based jobs superfluous. Once we reach this point there will be very little left that humans can do that can't be automated. As a result the capitalist cash flow cycle will be broken - the capitalists will no longer employ human workers, in favour of automated ones. My question is, what economic system will emerge from this? If human labor, both manual and intellectual, is completely superfluous then the capitalist system will be defunct as there will be no cash flow. Would a redistributive (i.e. socialist) system be the only mechanism by which to restore cash flow? Was Marx right? Or would there be some other mechanism by which cash could flow to the working class? Perhaps there will always be things that humans can do that machines will never be able to do. If 2029 is correct then this transition may happen in my lifetime. I'm interested to see what happens. Economics aside, from a philosophical perspective the implications could be enormous as well. If we were all rendered unemployed because computers were doing everything that we could ever do, what point would we all have in life?

7 thoughts on “Artificial intelligence and the future of capitalism”

  1. I agree, eventually this will happen, however, against a backdrop of obvious flaws in our current economic system (capitalism; see only the Stern Report from 2006) I strongly believe it will only unleash the most ugly effects in terms of ecological and social complications. Capitalism has already in the course of globalization shown that it terminally and completely lacks an ecological and social conscience control and responsibility component or at least correction factor. Thus, unless unforeseen dynamics help correct this flaw in the system, an efficiency overkill with transform life and human societies as we know them. So for now I prefer not to think of this eventuality. We will see tremendous progress until then on many fronts – lets hope artificial intelligence will help us … however, human stupidity is hard to counteract. So if the only result is advice we knew already about but don’t want to follow … well …

  2. The majors ecological crimes were committed in the Soviet union. You really do not know that the socialism was an economic and social failure?
    The most important thing is the individual freedom, the socialism is incompatible with it (if there is individual freedom how the economy can be planned?) I would like that you visit for example Cuba or North Korea to know first hand a socialist paradise.

  3. Artificial Intelligence is the proverbial noose by which a capitalist will hang himself by. We are quickly approaching that. Two decades is not very far away. And whether people like it or not, capitalism is a very shortsighted system, regardless. Communism was never completely embraced by Russia. It was a pseudo socialist state still utilizing money and not devoid of social classes. A true socialist or communist society has no money. But aside from that, a truly progressive society puts human achievement at its centrepeice. What it does not do is put the interest of the few ahead of the many. This is what capitalism does. You need only count the billionares to see how many are served by capitalism versus the many that are not.

    Well time will tell.

  4. I don’t think this poses a problem at all. In every western society all people have a certain amount of capital. This is often invested in education etc to get a reward. In the future one would simply invest it in robots and machinery. You might not rent out your own labour but you could rent out the labor of your machines or robots.

    Like societies today they will likely be mixed economies where there is taxation and some redistribution of income. Since these economies will be a lot richer it will probably not be difficult to cover all basic needs like housing, education and health care as a public good. Income from renting out machinery will likely be mainly used for luxury consumption.

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