If a machine can do something at virtually no cost, aside from its initial cost and maintenance, one would think that the company using it will make a higher profit. That’s wrong, though, because other machines at other companies will be doing the same thing and the need for market share will drive the price of the final product down severely. So, we have two problems — the people who used to be employed and the incredibly deflationary effect of automation on a massive scale.
Now, most developed nations depend on income taxes to fund government, but the number of people making an income and the real prices of goods and services will crater simultaneously, leaving governments impossibly short on funds for legacy costs, or what we generally call “entitlement programs.” With what money will people be paid a basic income? This deflationary storm will reduce the total amount of money flowing in the economy at a time when legacy expenses will be rising as retirees spend down their savings and become increasingly burdensome to the medical system.
You might argue that this deflation will be uniform and those legacy costs will fall proportionally, but I doubt it. Medical care will still require a lot of expensive humans and machines for the foreseeable future and housing prices will remain rather sticky because housing involves land, which can’t be manufactured, and requires materials that have to be grown, mined, and fabricated. Humans will still be involved in these processes. At some point, a neighborhood may be planned, graded, and assembled by machines, but that is probably a very long way off.
Food won’t experience the same deflationary force, either. The amount of machinery in farming is orders of magnitude greater than in the past, so totally automating it wouldn’t reduce human input by much. You still have to contend with time, land, fertilizer, pesticides, spoilage, and transport. We won’t have a scenario where we can get as much corn or fish as we want at any time. Nature puts a limit on how much we can produce. Now, we could go toward the more sci-fi options like manufactured meat and big fermenters like the ones in the Mycogen sector of Trantor, but that will be for bulk stuff. People would still want fruit, vegetables, and real meat.
When we talk about universal basic income, we’re making the mistake of framing it in the terms of the economy as it exists today. Once automation goes parabolic, all those economic assumptions will be wrecked and we may find ourselves in complete panic as we realize that we didn’t fully consider that the same process that necessitated UBI might also destroy it.