Our way of making money will end if AI replaces the majority of our jobs. Well, what?

It’s the defining technology of an era. But just how artificial intelligence (AI) will end up shaping our future remains a controversial question.

For techno-optimists, who see the technology improving our lives, it heralds a future of material abundance.

That outcome is far from guaranteed. But even if AI’s technical promise is realised – and with it, once intractable problems are solved – how will that abundance be used?

We can already see this tension on a smaller scale in Australia’s food economy. According to the Australian government, we collectively waste around 7.6 million tonnes of food a year. That’s about 312 kilograms per person.

At the same time, as many as one in eight Australians are food-insecure, mostly because they do not have enough money to pay for the food they need.

What does that say about our ability to fairly distribute the promised abundance from the AI revolution?

AI could break our economic model

As economist Lionel Robbins articulated when he was establishing the foundations of modern market economics, economics is the study of a relationship between ends (what we want) and scarce means (what we have) which have alternative uses.

Markets are understood to work by rationing scarce resources towards endless wants. Scarcity affects prices – what people are willing to pay for goods and services. And the need to pay for life’s necessities requires (most of) us to work to earn money and produce more goods and services.

The promise of AI bringing abundance and solving complex medical, engineering and social problems sits uncomfortably against this market logic.

It is also directly connected to concerns that technology will make millions of workers redundant. And without paid work, how do people earn money or markets function?

Meeting our wants and needs

It is not only technology, though, that causes unemployment. A relatively unique feature of market economies is their ability to produce mass want, through unemployment or low wages, amid apparent plenty.

As economist John Maynard Keynes revealed, recessions and depressions can be the result of the market system itself, leaving many in poverty even as raw materials, factories and workers lay idle.

In Australia, our most recent experience of economic downturn wasn’t caused by a market failure. It stemmed from the public health crisis of the pandemic. Yet it still revealed a potential solution to the economic challenge of technology-fuelled abundance.

Changes to government benefits – to increase payments, remove activity tests and ease means-testing – radically reduced poverty and food insecurity, even as the productive capacity of the economy declined.

Similar policies were enacted globally, with cash payments introduced in more than 200 countries. This experience of the pandemic reinforced growing calls to combine technological advances with a “universal basic income”.

This is a research focus of the Australian Basic Income Lab, a collaboration between Macquarie University, the University of Sydney and the Australian National University.

If everyone had a guaranteed income high enough to cover necessities, then market economies might be able to manage the transition, and the promises of technology might be broadly shared.