- Economic theory suggests that we can make money either through rent (land ownership), wages (your time), interest (tool ownership), or profit (creativity).
- However, unlike the first three factors of production (land, labour, capital), entrepreneurship (creativity) is limitless.
- (Well, almost unlimited — it’s limited only by our imagination and our time.)
- Which is why we need machines to replace jobs that have us rent our time by the hour to survive, as instead we need to be unlocking human creativity.
Most of human society was engaged in farming once upon a time. Slavery meant richer nations (or classes in those nations) moved to others work as slaves focussed on farming — and then one day, after thousands of years, slavery was abolished. Ignoring the human element to this, what drove this economic change? Technology. No coincidence that this happened in the same hundred years of the industrial revolution starting. Machines are simply more efficient than humans — and yet I think you would agree wth me that we are working more than ever since this transition in the world happened.
This is a good thing. It’s just the transition isn’t good — it’s friction. This is happening again and will continue to happen.
In the current form of friction, I believe automation is likely going to be one of the biggest political issues in the coming decade. The politics should be centered on how do we manage the friction (or if a country wants to fall behind, ignore it). There is a trend toward nationalism in America and Europe especially, and foreign labour is the catch cry but truthfully, it’s also largely due to technology, or rather the automation in manufacturing replacing jobs. We need to realise this is a permanent trend and this will extend to other sectors of the economy like services in future (as we saw with farming in the last 200 years).
For those scared of a future where the machines replace our jobs or even for those who think profit is a bad word, you just need a different perspective. Let me try to do this in just four sentences.