Wait, policymakers will say. What about jobs? Won’t automation eventually leave most everyone unemployed? No, just the opposite. History, logic, and scores of economic studies all show that higher productivity is associated with faster job growth, not slower. Faster productivity growth frees up purchasing power, which in turn creates jobs. It stirs “animal spirits,†as Keynes called them, and encourages companies to invest and people to spend, creating a virtuous cycle of yet more economic activity and job creation. There is no reason to believe this will change in the future, despite what some techno-utopians claim about the transformative power of technologies such as artificial intelligence and robots. This dynamic of growth leading to purchasing power leading to jobs will exist as long as human needs remain unmet. And given that U.S. median income could increase by a factor of 10 (to $510,000), with most people still having plenty of things to spend that money on (e.g., better vacations, a new boat, eating out more, a college education for their kids), we have a long way to go before we have to worry about running out of work (and even then productivity gains would be used to shorten the work week).
