Chart of the Week - November 15th

In our functioning society, we need labor and capital to get output, output is what is measured in GDP. The more workers, “labor”, we have the more we can produce, which creates more capital for the next product, and thus more output. 

People are a necessity in functioning economics. We need some form of labor for economic theory to work. So, what happens when we no longer have a growing population, will output follow? 

We have come far enough in the realm of robotics, AI, and other forms of economic “labor” that the people don’t necessarily need to be doing that “labor”, rather those machines could work 24 hours a day and people could observe the machines 24 hours a day. There will still be a need for people, just in a different form.  

The obvious rebuttal to what I just said is, “Well, if there are fewer people, won’t there be fewer consumers”. The answer to that is yes. If we are still a consumption economy, fewer people buying things would be harmful. But if there are fewer people wouldn’t those people have more money to spend, and so would they?

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Thanks for reading,

Jacob