This is spot on, but will require changes in how our economy is set up. In our current system, when those doctors have no money and no way to obtain it, they can't take advantage of the newly reduced prices on medical care, because they can't pay any price. As technology continues to eat jobs, millions of people will be out of work and have no way to obtain money. They can't buy anything, and eventually even the companies that put them out of work in the first place go out of business because they are the only ones with any money.
With smart planning, all of this should be OK. After all, the economy will be producing more than ever. But we have to embrace the idea that large-scale human unemployment will happen going forward, and adjust for that. Supply of human labor already dramatically exceeds demand for it, and that delta is rising fast.
I'm not sure what the answer is. I'm not an advocate of higher taxes or welfare programs, but there are going to have to be ways to obtain money other than traditional jobs if we are going to keep using it as a means of exchange. Smart economists need to be working on a solution - now.
In the history of the world, economists and government planners have never been able to manage an economy better than the capitalisic model of individuals in pursuit of their own goals. I don't see any reason to expect that they'll suddenly become successful at it. Technology has been replacing human labor since the dawn of civilization. Why will things not continue on pretty much as they have? That is: when technology replaces a need for human labor, those humans are free to pursue something else.
> In the history of the world, economists and government planners have never been able to manage an economy better than the capitalisic model of individuals in pursuit of their own goals.
What is an example of a successful state that has chosen between these two models? The successful economies are all mixed economies, with a strong role for both government planning and private competition. Germany is perhaps the canonical example of following this mixed-economy model as an explicit theory (vs. just stumbling into it). Other successful countries mostly deviate a little to one side or the other: the Nordic countries traditionally have more planning than Germany does (especially around infrastructure, urban planning, and major industrial initiatives), while the U.S. traditionally has less. But we're talking about modest variations: the U.S. public sector is ~35-40% of GDP, Germany's is ~40-45% of GDP, and the Nordic countries are at ~50-55% of GDP. Nobody is running a successful economy with a public sector at ~5-10% of GDP.
I suspect the Chinese mixed model is also going to prove quite dominant in the 21st century. Compared to the European social market economies, it's less social, but more centrally planned, which may or may not be an advantage.
And, I'm not sure the very common line "market forces manage the economy better than planners" is actually universally true. I think without governmental controls and regulation we might have severe economic events starving a third of the world to death every 20 years or so. So, there is a balance, even for market economies.
In addition, lets look at your final statements... Technology replaces the need for human labor. What if technology did the planning? Some really good algorithms refined over time by really smart people. Do you still think simple human greed would produce better outcomes for humanity? I don't.
And one more point... a debt based economy where money is expanded might be the actual reason for the success of "capitalist" countries. Oh, and some conquest. And, the economic punishment of countries not falling in line with "market economy". Maybe "capitalism" itself has less to do with the actual outcome than is often claimed by capitalists.
And what happens when there is nothing else to pursue? When I say "human labor" I don't just mean construction etc. Lawyers, doctors, mid-level managers etc....any field that doesn't specifically require human creativity can either be replaced or have the number of people working in it greatly reduced by technology.
I agree with you but would go even further in saying that the idea that "human creativity" is somehow exempt is another layer of hubris.
The comics will probably be the last to lose their jobs (long after we have no need for the very many people currently involved in transportation, for example) but a virtual infinite number of monkeys typing very fast on an infinite number of keyboards with a really clever machine learning filter eventually beats them, I'd bet.
In this case, the ‘millions of humans’ essentially received the doctors’ foregone salary. They got a raise, in the sense that their healthcare got cheaper.
We can give them $1000 cash, or we can charge them $1000 less for the healthcare they buy. Same thing.
So, in a sense, money became less important in the acquisition of healthcare. Purchasing power increased.
This is why I make the distinction between money and economic value. The latter is the real goal.
With smart planning, all of this should be OK. After all, the economy will be producing more than ever. But we have to embrace the idea that large-scale human unemployment will happen going forward, and adjust for that. Supply of human labor already dramatically exceeds demand for it, and that delta is rising fast.
I'm not sure what the answer is. I'm not an advocate of higher taxes or welfare programs, but there are going to have to be ways to obtain money other than traditional jobs if we are going to keep using it as a means of exchange. Smart economists need to be working on a solution - now.