You forgot the direct causal effect this has on demand. The more labor is displaced, the more demand will need to come from somewhere else, and that is a massive problem to have.
When automation increased productivity during most of the last century, demand grew and economy prospered. When towards the end of the century, automation started to cannibalize jobs, we started to rely more and more on debt. And that's where we are today.
While there is likely some inflation, it would be really interesting to see how it balances out (if it does) against the benefits of added extra demand.
>You forgot the direct causal effect this has on demand. The more labor is displaced, the more demand will need to come from somewhere else, and that is a massive problem to have.
Demand for labor, or demand for products?
>When automation increased productivity during most of the last century, demand grew and economy prospered. When towards the end of the century, automation started to cannibalize jobs, we started to rely more and more on debt. And that's where we are today.
You're hinting around the most important distinction between then and now (or the not too distant future). For many goods, we are entering a time where we can produce more than we are able to consume. We can continue creating artificial scarcity to keep people employed, which kind of makes labor the product. Or we can relax our ideas about how to distribute the proceeds of peoples' collective efforts. I don't think that it is tenable to continue with the artificial scarcity model because automation is just too attractive to industry.
When automation increased productivity during most of the last century, demand grew and economy prospered. When towards the end of the century, automation started to cannibalize jobs, we started to rely more and more on debt. And that's where we are today.
While there is likely some inflation, it would be really interesting to see how it balances out (if it does) against the benefits of added extra demand.