This idea that technological change is going to make 99% of us unemployable has always rather puzzled me. We've even got Paul Krugman, and such as FT Alphaville, claiming that we're going to have an explosion of inequality. And I'm afraid that I really just don't see it.

The argument is that as robots become capable of doing everything then there will be two very stark classes. The ones who own all the robots and thus get all the money and then the rest of us who live on whatever scraps anyone bothers to tax out of the robot owners:


If you think about it, inequality is always going to be the natural consequence of a technologically-driven deflationary environment. Whereas in inflation, those with financial claims (a.k.a money) are impoverished as their purchasing power is eroded, while those in debt are enriched — in deflation, those with financial claims (the result of increasing rentier flows, if Krugman’s point is valid) become enriched as those in debt become increasingly impoverished.

As I say, I'm afraid I just don't see it. And what worries me about that is that the people on the other side are vastly more intelligent than I am but I keep thinking that they're not seeing something that I am. Which is this obvious point: if everything's made by the machines then everything becomes revoltingly cheap. When the cars are made by machines, the smelting the metal to make the cars, the mining to make the metals, the machines that repair the machines that do the mining: when all of this is done by machine then a car should cost thruppence ha'ppeny. Because there just aren't any wages that anyone has to pay to anyone.

And if everything costs the monetary equivalent of spit then we don't have rising inequality at all: actually, what we've got is the arrival of true communism. For here's a little known point that I like to make. We don't actually care about jobs: don't care if no one at all has one. We also don't care about incomes: it's not a problem if everyone has very low incomes. What we actually care about is that everyone has the opportunity to consume. And there are various ways that this can be provided. One of them being that incomes fall but that the costs of things fall even faster. Who is richer as measured by the ability to consume cars, someone on $30,000 a year and a car costs $20,000, or someone on $15,000 a year and a car costs $5,000?

If this true mechanisation really does come to pass then we know what is going to happen to the price of everything produced: it's going to fall, rapidly and seriously. As everything that is produced in a purely mechanical way in our own current world has over the decades. Therefore in terms of what we'll all be able to consume we'll all be rich as Croesus. So what is this coming inequality that is being spoken of?