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So, I've been thinking for a long time what automation means for society in general, and the economy in particular, especially since the recent advances in Artificial Intelligence. All in all, I'm pretty sure this ongoing transition could be understood as a series of phases, at each of which the economy can either move more towards socialism or capitalism. Please tell me what you think about this :)
- First phase: production increases quickly; this sharp increase in the amount of product manufactured drives automation forward, and results in a higher wage to price ratio and/or a higher profit margin. This phase started at the First Industrial Revolution.
- Second phase: production grows more slowly, but innovation begins a feedback process that quickly brings products that are technologically more advanced and require higher automation to be produced. This can be coupled to higher prices or not. We are in this phase.
- Third phase: automation starts advancing at a pace that technological requirements for manufacture can't keep up with. The demand for labor thus decreases significantly, either improving the overall working conditions or increasing unemployment. We're at the verge of entering this phase.
- Fourth phase: if the previous phases take place in a socialist context, communism is achieved now. If they take place in a capitalist context, living conditions may deteriorate to a point wherein a socialist revolution can be carried out. Or, countries could manage to temporarily contain this deterioration via social measures. If all fails, however, the cost of manufacture will simply keep going down until the economic system partially collapses due to most products essentially becoming free (think of what open source software brought about). This will also realize "communism", but possibly a different form of it that we maybe don't want.
