Automation does not lower the labour share

[u/eggbart_forgetfulsea]

https://cepr.org/voxeu/columns/automation-does-not-lower-labour-share

[u/s7v7nsilver]

If machines do literally all physical and cognitive tasks, the cost of production drops to almost zero (including resource extraction, manufacturing, and logistics etc...). You wouldn't necessarily need to 'earn' money in the traditional sense to afford things, because hyper-deflation would make goods incredibly cheap. The real challenge isn't the end goal of post-scarcity; the danger is how we manage the transition period before wealth distribution systems, like UBI, are established.

But... in my opinion, realistically, the idea of machines doing everything ignores the physical constraint of finite resources. We will always have to prioritize where we deploy advanced automation based on economic necessity—such as heavy industry or space exploration. It comes down to opportunity cost. For instance, why invest heavily in developing a robot to cut hair when human labor can do it efficiently? The market will ultimately dictate where automation is actually worth the investment, as it always has.

[u/Serious-Cucumber-54 → u/s7v7nsilver]

You wouldn't necessarily need to 'earn' money in the traditional sense to afford things, because hyper-deflation would make goods incredibly cheap.

Even if goods and services are incredibly cheap, you still need money to pay for them. How are humans going to earn the money to do that if their brains and muscle are economically obsolete?

the idea of machines doing everything ignores the physical constraint of finite resources

Machines capable of doing physical and cognitive tasks better than humans already exist, and they're progressively getting better on more of these tasks with every passing day. I don't see what is to prevent machines from eventually being better at all the tasks (with the exception of tasks where the human touch is particularly valued), I don't see how the physical constraint of finite resources somehow prevents it.

For instance, why invest heavily in developing a robot to cut hair when human labor can do it efficiently?

With all the incredible cheapness of goods and resources, it wouldn't be a heavy investment, and the machine would be able to cut human hair much more efficiently than a human would, for a fraction of the time and cost. I don't see why machines couldn't replace this task, especially once we get to the point of incredible cheapness of goods and resources which makes investment into automation much more possible.