Does Capitalism and Democracy survive free energy and automation? [duplicate]

Question

In a future where

1. Humanity cracks the puzzle of cheap, non-polluting, abundant energy through cold fusion or efficient renewables.

2. Automation makes unskilled and semi-skilled labour obsolete.

3. The social disruption of un-employing every unskilled worker on the planet is completed via generational change, drastic social upheaval and maybe a crisis or two.

How does Capitalism and Representative Democracy adapt? Do they survive and if not what replaces them?

Representative democracy is leading to demagoguery and pandering to the masses. e.g. Heinlein suggested military service = citizenship = right to vote while Iain M. Banks' Culture has no laws or government.

I can't see Capitalism surviving without scarcity. So what comes with an age of abundance?

Similar Questions

What's the most likely "post democracy" form of political government? asks real-world next-step question without considering technology changes.

What would be the main societal changes if we invented a free and unlimited energy source tomorrow on earth? Closed as too broad. Hopefully my technology and focus on Capitalism and Democracy isn't too broad.

What would our planet look like with unlimited and cheap (i.e. almost free) energy? doesn't deal with societal organising systems.

Democracy

Democracy is the worst form of government except all the others that have been tried" - Winston Churchill

Thanks @Philipp for that quote. I don't think we'll revert to feudalism or monarchies. But Oligarchy is a threat plus I'm looking for something we haven't tried yet.

Those answers that believe Representative Democracy will not be affected by radical economic upheaval have not read their history.

Pre industrialisation only landowners could vote.

Women earned suffrage once they were an economic force.

The US War of Independence was fought against taxation without representation.

Change the organisation of the means of production and you will need a different system of government. It may remain a true representative democracy but current party politics and $20 million election war-chests means this isn't your fathers election anymore.

Edit

Not a duplicate of How would humans adapt if low-wage labor was done by robots? as I'm not asking how humans will adapt. Point 3 above says they've adapted. There are no longer unskilled jobs for unskilled people. Everyone who wants a job or vocation has one.

My question is specifically about organising the means of production which historically has been concerned the allocation of scarce resources in a post-scarcity world.

Secondly what impact does post-scarcity have on the most popular form of government on Earth (Representative Democracy).

Post-scarcity in this case is delivered by 1) Cheap abundant energy and 2) unskilled labor is done but automations. Yes other materials are still scarce, but those two get you 80% of the way to a radically changed basis of society.

Example answer

Here's an example answer: If control of the means of production remains with the elites (aka 1-percenters), and the majority of the population is economically unproductive and their inability to afford consumer goods wipes out discretionary spending. The entire economy shrinks because economic activity has decreased. In order to increase demand, consumer goods price deflation leads to a race to the bottom. Capitalism is in big trouble as the working and middle class is wiped out. Henry Ford sold cars because his workers could afford them. Oligarchs with deep and intricate ties to 1-percenters end up ruling for the benefit of the elites while couching the political rhetoric in populist and only superficially democratic terms.

However if education, arts, entertainment and leisure industries expand to fill the employment lost to automation, and wages and salaries are maintained, then the economy changes rather than shrinks and capitalism continues as usual. Buggy whips are replaced by automobiles. Representative Democracy continues to slowly evolve with media savvy candidates and representatives manipulating the news debate. It is possible that an Oligarchy posing as representative democracy overwhelms the democratic institutions over time.

Answer 1

I think you're making a few assumptions here, so I'll try and address them. The bottom line is that democracy and capitalism can survive the circumstances you describe, but as usual it depends.

Firstly, just because energy and labour are cheap doesn't mean other materials will be cheap too. Hypothetically let's say climate change gets really bad; both flooding many coastlines and drying out the land. This causes crops to fail. Both the price of food and land will go up. Now the cost of labour won't be the biggest factor. Additionally people will still want to trade things, and get loans for reasons. Undoubtedly something will still be profitable for investment; largely because someone will always have a big idea for profit which is beyond their ability to finance. Asteroids? Yeah, we can mine them. But. Maybe. We need some financing? Capital has to be provided, capitalism continues.

In many ways the economy is already trying to deal with an abundance of produce, with strategies like planned obsolescence. Apple, IKEA, fashion, etc. We transitioned from a needs to a wants based economy in the 1920s with the rise of advertising which exploited desires and emotions. See Edward Bernays and his legacy. Back then companies feared what would happen when everyone has a car. What do they do then? The need is met. How do they continue to make profit on selling cars? Similar problem in this hypothetical, just more extreme.

Secondly, it isn't just blue collar workers whose jobs are on the line. Importantly many skilled professions, like medicine and law, require effort intensive tasks that can often be done better by machine learning. Diagnosing disease requires comparing a huge amount of medical data, and a human doctor can only know so much. Similarly a lot of legal work is just examining lots of documents to find connections: an effort intensive task machine intelligence can already do better than people. So unemployment will be far more serious than you suspect.

Thirdly, who owns the machines and power plants? If the means of production is not shared somehow, it becomes very easy for this utopia to become a dystopia. Monopolies and oligarchs who control the economy via their ownership of the machines, and can charge whatever they like. When labour is cheap people have less leverage with the powerful. Consider that the Black Death is cited as a major cause of the Renaissance. After so many people died peasants could negotiate and sometimes demand far better wages, and had access to far more land. Basically life got a lot better for the survivors until the population went back to pre-plague levels a century later.

Fourthly, will the government provide enough welfare to cover mass unemployment? Or will it see the end of social mobility, and mass poverty? If the government owns most of the machines, at least then they can direct their use and democratic government can exist to respond to the needs of the people and the direction they wish to go. But if the situation becomes like Victorian inequality and poverty - on steroids - then the democratic status quo will not last. Consider the Great Depression, every single German bank failed. This led to mass poverty and widespread hunger. The consequence was that support for the liberal-conservative establishment died. The people had no confidence in them, but they did believe in communists or fascists; who had street battles and attempted coups, until finally... well. We know what happened.

So perhaps you're incorrect to assume that this circumstance is post-scarcity. The cheapness of labour means that people probably can't actually afford as much as they used to. If they have a job. It has been argued that without a healthy middle class capitalism and democracy can't exist. See aforementioned Weimar Republic example.

Answer 2

Free energy does not mean a complete lack of scarcity: air is free, but that doesn't mean that the economy's stopped. Water was free about a hundred years ago. All that "free" energy would do is remove one variable from economic consideration, not solve world hunger or anything.

Now, automation removing the need for unskilled/semi-skilled labour: THAT is a major issue. You'll probably see an emerging supply of handicrafts, as people, formerly working in factories, go back to creating "artisanal" products, instead of mass produced material--something we're already seeing. Others will find new niches in the service sector, that open up as society evolves. There will be new goods and services in demand, and the market will move to generate a supply as long as resources are available-- and since you've suddenly got a large labour pool unemployed, you can bet resources WILL be made available, if only to generate taxes.

Representative Democracy
The real threat is in the "representative" part. If the rise of automation and free energy frees up enough time, people will (ideally) pay more attention to what their representatives are doing. To some extent, social media may simply replace career politicians: why ask an MP/Congressperson/whatever what the people in their constituency think about an issue, when you can simply ask them directly. The reason for these people in the first place was that your average farmer couldn't waste a couple of weeks in the sowing/harvest seasons to travel to the capital and talk to the government/king, so one of the richer people, who could afford to hire a manager, would carry the proxy of the village/shire, when he visited the capital. A social media network, with proper security, and a means to separate groups by region, could serve these functions just as well, provided the government is seen to act on public concerns. It would be quick, effective, and ideally, incorruptible, unlike human representatives: an excellent example of automation getting rid of unskilled labour.

In practice though, people will find ways to spend their free time and let someone else be responsible; so business as usual.

Answer 3

While your question is relevant about capitalism, free energy and automation has little to do with democracy. Let us get the obvious out of the equation first.

Democracy And Free Energy/Automation

Democracy is a form of government. It has (theoretically) very little (if anything) to do with the economic situation of a country. Even if free energy is available to all citizens of a country, the country would still have to manage issues like external security, internal security, public services and tax-management. These things do not vanish with the availability of free energy. Add to it the issue of managing the judiciary and transport. Yes, free energy does not mean that free transport is available to all. Considering that everyone can drive his car to infinity, how are you going to manage virtually all the cars out on the roads at the same time?

So yes, even with free energy and automation, you still need order in the state and as such, a government is necessary. I do not see any flaw with democracy which is rectified by oligarchy or monarchy. So the states currently employing democracy will most probably remain democratic in your theorized scenario too.

Capitalism And Free Energy/Automation

Now this is a complex scenario. You have not determined some variables which are required to determine the fate of capitalism in your theorized world. For example, automation does replace all manual labor, but what about the investment involved in production?

That is, yes you can make your shampoo at home, but what if making that shampoo required installing machines which would fit in a factory and cost you 50 million dollars? Would it be economically feasible to produce your shampoo at home or just buy it from the market as before? What about clothing? Shoes? Food items? You can't produce food items through machines at home. What about natural resources such as gold, silver, iron etc? Even if you could produce them all at your home, it would be costing you in million of dollars to purchase all the machinery required and it would take a gigantic factory to house all those machines. Would it be feasible?

Also consider the fact that governments require taxes. If no money is in circulation, how are you going to generate taxes to run your state? And if there is no government, it is very likely that some other state (where government and military still prevail) will assault you and annex you.

You are also forgetting that in a society if machines are able to produce anything and everything without human labor, such machines would be patented and only used by the corporations which are already manufacturing those goods. Why would the inventors trash all their gigantic potential profits by making the machines publicly available to all? Even if they, would governments let it happen? Think about all gun-phobic states of the world where suddenly every citizen has the ability to prepare a high-power auto-loading (remember, energy is free) repeating crossbows. Would the governments allow this to happen? Definitely not. So even if the inventors make their inventions available to the public, the governments will immediately ban those machines and use them under its own authorization in military production units.

So yes, capitalism will (theoretically) survive the availability of free energy and automation.