Keynes dreamed of a future where technological advancement would free us from the harshness of the economy and make it possible for us to work drastically shorter hours while our needs would be fulfilled. We would be free Like Keynes predicted the economic output of factories has increased per-capita several times over since 1930. But we are nowhere near realizing the freedom from work and basic material needs that Keynes imagined. We work slightly less than we did 80 years passed, but the world that exists now hardly looks like the utopia Keynes imagined.
Right now it may be possible for Canadians to work significantly fewer hours than we do. If Canadians worked something like 30 hours a week instead of 40, you might assume our gdp would drop by one quarter so we would be living on approximately 30,000 dollars a year per person. If the average worker worked 20 hours a week, we would have a gdp 20,000 per capita or the same as Poland. Now this math is naive in the sense that it assumes output scales linearly with labor hours worked, but given reasonable equality of income it is perfectly sensible to assume that 20 hours work per labor worker would give a reasonable quality of living for someone Canadians on average, and certainly more than the output in 1930.
Assuming people only work to satisfy basic needs, any increase in productivity should be met with a equivalent decrease in labor hours worked. This is not the case for three primary reasons first; inequality of income makes it difficult for many people to survive off 20 hours a week even if they wanted. Also people may actually enjoy work and therefore will work more than they need to subsist themselves at any given level. And more importantly more needs have been created since, 1930.
But now with automation of jobs, it’s possible that productivity might be increased so much that Kenye’s dream might be realized. Surely their is a point where productivity becomes so high, people will finally be content to sit back in the abundance. Keynes underestimated how great our need were. Assuming automation increases future I postulate their are two different routes we can take. The vision Keynes dreamed or the world of Judge Dredd mass unemployment and huge inequality. It all depends on how displaced workers are treated.
With automation the reduction of employment is inevitable, before agriculture jobs transitioned to manufacturing jobs which transitioned to service jobs. Now that service jobs will be replaced by automation there is no place left for low skill workers to transition. Many people think that this now represents the beginning a creative era, where our inner potential is released, but to be creative you need to eat. And at any given point of time, any sort of art or creative output is only a small part of the economy. The economic problems will not be solved by teaching everyone and their Grandma HTML. People want I-Pods and houses, not paintings by your average street artists.Communications major who writes mediocre novels will not be respected more in 20 years when he is even more unemployable then he is now. The market is already flooded with novels and movies. I do think that arts and knowledge are the most important legacies humanity can hope to leave, but our appetite for them relative to other things, is very little in the current economy and its naive to think that our demand for the intangibles will suddenly increase over the practical things like goods and services.
Since capitalism means that those with the capital make the money, those with no skill sets will be able to provide their services for a cost that competes with the computers and robots. Certain people with desired skill sets like programmers will certainly make a killing but at the cost of those making nothing. The unemployed already get treated like shit, how do you think they will be treated in 30 years, exactly the same! In Keynes vision of the the economy would make the situation more bearable, the only way I can imagine this happening is redistribution of taxes. In Judge Dredds world the wealth accumulates at the top and the rest of us rot. If some product replacing physical human labor happened tomorrow this is what would happen. Either way our incentives structures will need a great deal of revisiting, salaries of some will become exponentially higher, and the salaries of most will be lowered.
It is naive to think we can compete computers with in most things forever. We to start considering the day when computers take over the economy, and the implications are startling.