I received a link to an article about the up-and-coming rise of robotics in industry. In this article, a few figures were tossed out (some factual, some theoretical future figures) as ways of describing the possible economical outcome of placing robots in most of our "blue collar" positions. The list of stores given in the article that have expressed interest in this was "Wal-mart, K-Mart, Target, Home Depot, Lowes, BJ's, Sam's Club, Toys R Us, Sears, J.C. Penny's, Barnes and Noble, Borders, Best Buy, Circuit City, Office Max, Staples, Office Depot, Kroger's, Winn-Dixie, Pet Depot, etc" which I'll explain in moment as being an interesting list of stores to use as an example. Now the figures described were the breakdown of the countries income distribution. These figures show that in the past 40 years, we've gone from 80% of the population getting 60% of the countries income to that 80% getting about 50%. The basis of the rest of the article is on the hypothesis that this trend is going to continue in the same direction with a major boost from the massive addition of robots in the workplace.

Now, it is hard for many people to except the fact that the nature of any capitalistic system is to exploit one group for the benefit of another. This is easier to understand if you shrink the model considerably. For instance, lets say that in the country of NEDLAND, there is one company. This company makes the only sellable goods in NEDLAND and, for the sake of simplicity, there is not importing or exporting in NEDLAND and nobody leaves or enters the country. Now, in NEDLAND, there are a few workers, 1 owner, and they make widgets. Each employee is given $3 per widget they make, and the widgets are sold for $5. Again, for the sake of simplicity there is no production cost for the widgets. Now the company only sells to its employees because they are the only consumers in NEDLAND and it only makes as many widgets as will be sold.

There are a number of fundamental flaws in this model. First, and foremost, there is no way the number of widgets made will ever equal the amount purchased because they are sold for more then the employee can afford (5 are made for every 3 that can be purchased by employees or 5 made = $15 paid). This outlines the next, now (hopefully) obvious issue. There is no way to make money in this system because the employees cannot afford the Widgets they need, and the employer cannot make money on widgets not sold.

Now, lets make a few changes. Lets say that NEDLAND starts to export to PAMLAND and decides to only pay $1/widget for the production of the widgets in NEDLAND. It also sets up a production company in PAMLAND 1/100 the size of its other where it pays employees $5/widget to create widgets as long as they also sell them for $4/widget (including the imported widgets). The people in PAMLAND love the cheaper widgets and think that the widget company is great because it pays its employees so well.

Now this model demonstrates, on a much more simplistic level, how a capitalistic society works. It pays its employees rather well, sells its products for cheap, and makes its profit by exploiting someone else (in this case, the people of NEDLAND) in the production process. With the first model, there is no way for anyone to make a profit because nobody is being exploited. Furthermore, the first model is bringing no new money into the cycle. With the second model, PAMLAND is having money come into it and the widget company is making a fortune, expanding the economy and, eventually, creating more jobs.

Coming back to that article I see some flaws in his hypothesis of the future economical model. He proposes that "Wal-mart, K-Mart, Target, Home Depot, Lowes, BJ's, Sam's Club, Toys R Us, Sears, J.C. Penny's, Barnes and Noble, Borders, Best Buy, Circuit City, Office Max, Staples, Office Depot, Kroger's, Winn-Dixie, Pet Depot, etc" are going to fire tens of millions of works and then these unemployed are going to continue to shop as normal and pad the pockets of the elite. The problem I see here is that the people these companies hire are also their primary customers and the working class that this group falls in has a tendency to live paycheck-to-paycheck, not saving. It is also probably safe to assume that this kind of massive layoff would completely break down the current welfare system. The point is that no money would be in the hands of these unemployed to support the companies they were fired from ultimately bankrupting the companies. This hypothesis would hold for the first bit of time while people still had a little bit of money to burn, but I doubt it would last more then a couple of months. After this, there would be no consumer with money to sell to. Ultimately, I think that the big businesses know this. They know that in order to have people spending money they need to have money to spend and that they are a big part of this cycle. It's kind of like having a water cycle but eliminating the rain part, and expecting the rest to still work.

In the end, I agree that changes need to be made. I see so many technological advances questioning our capitalistic system that it really makes me wonder how much longer it'll be before the whole system needs to be revamped. We may never reach Karl Marx's socialistic society, but I think that very similar changes will be made where a similar step may have to be made in order to allow our current form of living to keep up with technology.

Thoughts? Please comment!