As of early 2026, most of the worldwide earnings from capitalism are being re-invested into AI development (as well as a healthy amount of borrowed debt). At the same time, there is a dawning realisation among sections of the workforce that their means of income may not continue to exist for much longer as a result.
We will most likely spend the rest of this decade (and the next) grappling with the consequences of this upon our lives. It’s safe to say though that by 2050 and beyond, most of the owners of capital will not require very much human input at all to generate their products and services. However, they will still need humans to consume them, otherwise they will be unable to generate earnings from their capital.
It’s often assumed that Capitalists prefer small government and less intervention in people’s lives. However, this has not really been the case historically – the Capitalist and the State worked hand in hand to enable efficient production. So it’s very likely they will again in future in order to support and facilitate consumption within an automated economy.
To understand the context and motivation for such a shift, it is first worth reviewing some significant legislative milestones over a one hundred year period that were heavily influenced by Capitalists.
The key requirement for Capitalists was to have a supply of productive units of labour to manufacture their goods and services. Labour receives wages which are then used to buy the products and create profits for the owners. Wages are depleted and workers return to the factory and the cycle begins again. It is a closed loop system consisting of owners of capital and workers.
The repeal of the Corn Laws in 1846 was a major moment that re-shaped UK industry, the environment and global dependency in ways still felt today. The Corn Laws were essentially a tax on imported wheat, introduced as a protectionist policy after the Napoleonic wars to sustain the profits of the land owning class. However, by the mid 19th century, as industrial progress migrated workers from rural to cities, the price of bread made with domestic wheat was climbing out of control. There was also the potato famine in Ireland and eventually political pressure led to the scrapping of the tariffs which enabled mass imports of wheat and lowered the price of bread.
This is often seen as a victory by the industrialists and merchants over the aristocratic land owners (it could also be framed as a strategic energy policy by turning over domestic land to fuel the growing demand for horse power – a topic which I’ve explored in a separate post). But the Capitalists were not pushing for this out of humanitarian concern – it was a business necessity.
Units of labour need fuel to operate. If the cost of that fuel (bread) rises, then wages will also have to rise. This eats into the profits of Capitalists. By ensuring a huge supply of cheap imported food, they were instead able to keep wages at a subsistence level for many decades to come. Foreign calories literally subsidised the accumulation of capital wealth.
While the dark satanic mills from the early part of the industrial revolution did not require much beyond food inputs for their labour force, it became clearer over time that the engineering, chemical and machinery breakthroughs required the labour force to have a minimum and standardised level of basic education.
The Capitalists needed their labour units to have basic literacy to read manuals, arithmetic to calculate measures and weights and, perhaps most importantly, institutionalised time discipline to fit in with the factory system.
So they campaigned heavily to introduce the Elementary Education Act in 1870 which compelled all children between 5 and 13 to attend school. The State took on the huge financial burden and responsibility for producing competent and efficient labour units, but the Capitalists were happy to fund this because it provided them with huge pool of quality labour to stay competitive with the rest of the world.
As we rolled into the 20th century, the Capitalist’s concern turned towards the deteriorating state of the workforce. Riddled with tuberculosis, malnutrition and untreated injuries, it was becoming more inefficient which ate into their profits.
Furthermore, periods of economic downturn would render parts of the labour force destitute, rendering them unfit for work when good times returned.
The National Health and National Insurance Acts of 1948 were the maintenance contracts put in place by the State to ensure a stable and healthy supply of units of labour for the Capitalists.
Like education and food before it, this was not something individual firms could supply themselves, so instead they lobbied the government to take on this responsibility on their behalf. Now if workers got sick or injured, they could be repaired by the National Health Service and returned to work as soon as possible. Or if they lost their job, the State would make welfare payments out of the National Insurance fund until they found a new one.
This was not cheap for Capitalists. They had to make significant employer contributions into this outsourced service. But the gains were immense and enabled them to grow profits enormously through the second half of the 20th century.
It was desirable for both the State and Capitalists to have a growing population. An excess of labour acts to suppress wages while also strengthening the military.
The combination of increasing longevity and immigration policy ensured that a sufficient quantity of labour was available throughout the 20th and early 21st centuries.
This does however create a problem for the State which the Capitalists have been less keen to subsidise. The ageing demographics place a burden on the working population to support the non-working population.
Indeed, Capitalists made this worse by closing pension schemes, off-shoring work to other countries and implementing large scale redundancies. The State is left to pick up the pieces.
Up until now, the State has created a legislation framework that ensures labour is affordable (repeal of corn laws), competent (education act) and functional (health and repair). They are essentially managing the population as units of production for the Capitalists to utilise in the pursuit of profit.
The rise of AI and robots is changing this fundamental symbiosis. between capital and human labour. It is not a theoretical thought experiment – human jobs have already begun to disappear to AI and robots at a significant rate, driven by the Capitalist’s desire to reduce marginal costs.
But AI and robots do not consume the services they produce. Classical economics tells us that if your marginal costs are zero, you have an infinite supply of goods to sell. But the human customers no longer have the wages to spend on those products, since they are unable to exchange their productive capacity. The circular flow of money ceases, capitalism collapses and society becomes unmanageable by the State.
To prevent this scenario, the Capitalists and the State need to work on an entirely new legislative framework that will enable capitalism to function efficiently in the new Automation Age.
As we have seen, humans have been primarily managed for their productive capacity in the industrial age. However, In the automation age, humans will need to be managed for the consumptive capacity instead.
There are three fundamental features of digital inventory which provide the factors of production to build a functioning economy in the Automation Age:
These features are more than enough to create the new paradigms required for value exchange in the Automation Age. However, it will not happen by magic.
There will be a deliberate and careful construction of novel new laws by the State to enable this. The Capitalists will provide their wholehearted support, because they know without them their current market collapses.
In keeping with the historical narrative, I will structure the rest of this post around hypothetical dates and names for future Acts Of Parliament that will support the transition from the industrial age to the Automation Age.
The currency used today works well as an exchange of value for production, which can then be used to exchange again for consumption. However, it is entirely unfit for a future when humans are not involved in production.
Instead, a two tier digital currency tokens will be created by the central bank which have two distinct purposes:
Owners of Sterling-A may convert portions to Sterling-C to spent or distribute around the economy, but not vice-versa.
It’s virtually impossible with legacy currency to have a two tier system, however the programmatic nature of digital currency makes it a natural base for creating value flow between Capitalists and consumers when their labour is no longer needed for production.
This digital currency will sit alongside legacy Sterling for quite some time with exchange rates between the two. This enables a transition where some humans will still be exchanging labour for wages. It’s unlikely a robot will be cutting your hair any time soon, for example.
The scene is now set for the Capitalists and the State to engineer a new legal framework fit for the Automation Age.
This establishes a National Automation Fund which receives an equity stake in registered automation companies (10-20%) in the form of Sterling-A.
The fund distributes a weekly dividend of Sterling-C tokens from this fund to all citizens which can be used to purchase goods and services from the Capitalists. The decaying nature of the currency creates the incentive to keep spending and consume the automated inventory.
Companies receive Sterling-C as revenue, which they can use to pay the few workers they retain, plus other suppliers. This needs to happen quickly because of the decay. However, companies will be permitted to convert surplus Sterling-C back into Sterling-A when it transfers to the balance sheet. This conversion is taxed by the State which is how the 10-20% ends up in the national automation fund.
Capitalists are happy with this state of affairs because it enables them to sell all their automated inventory and retain the bulk of the profits to continue accumulating their wealth.
You will notice from the discussion so far that there doesn’t seem to be a way to acquire Sterling-A unless you had accumulated wealth already. Generally, it is the older population who hold the most amount of the country’s wealth
But this older population also needs a large amount of care, which cannot be sustainably paid for using legacy Sterling (because the supply of that is rapidly diminishing as the human produce-wage-consume cycle slows evermore).
In recognition of this, and to enable the younger generation to participate in wealth transfer and accumulate their own Sterling-A, the 2038 Act will create a Care ISA where time spent giving care to the older generation can be banked tax free inside the ISA for conversion later to Sterling-A at specific life events such as buying a house, having children or needed care yourself in later life.
Human centred skills (empathy, physical care, companionship) therefore become premium propositions. You do not need to have a wage income to live day to day (because you are already receiving your weekly dividend from the 2035 Act). So now you are free to allocate your time providing these premium services in order to accumulate wealth for yourself.
It might seem counter-intuitive at first that Capitalists would support this – wouldn’t those “free time hours” just eventually dilute their Sterling-A holdings? However there are three key factors which make it very attractive for the Capitalist:
So far, the established mechanisms for the citizen as a unit of consumption are engineered by the State and Capitalists to meet their own goals, but there is an enormous exploitation of human generated data which is not sustainable in the longer term.
Until now, the legislative protections for data focus primarily on privacy (GDPR) and transparency (cookies). However the data itself is treated as valueless exhaust and Capitalists have free reign to harvest it freely to retrain their models to become more powerful.
Under the 2040 Act, citizens will be mandated to join a Data Union which will act as a custodian for their data and attention. The Data Unions will negotiate on their members behalf with automation companies who use that data to produce their products.
Instead of receiving micro-payments in the form of Sterling-C, the unions will receive Sterling-A which they use to buy and hold assets on behalf of members. The union then pays them a Data Dividend in Sterling-C from those assets in compensation for their data and attention contribution to the digital economy.
Similar to the Care ISA, there would also be provision on certain life events (e.g. reaching a certain age or health condition) for members to withdraw their portion of Sterling-A from the union and use it for their own purposes.
This enfranchises all citizens with a means to accumulate wealth, not just those few able to provide premium human services.
Again, one might ask why the Capitalists would go along with this, since they are transferring their wealth in return for something they used to get for free (the data exhaust). There are three principle reasons why the formation of Data Unions would be supported by Capitalists:
The transition of the human’s role in society from unit of production to unit of consumption will create a crisis of human purpose if not carefully managed.
The role of the State historically was to produce a competent and functional workforce for the Capitalists to produce their goods and services. This standardisation began in 1870 with education. It turned out the Victorians were remarkably good at weaving moral purpose into the social fabric.
Even today, these social norms are self propagating from citizen to citizen. The notion of going out to work (providing Capitalists with their means of production) is embedded deeply within people as the ideal purpose in life. Those who do not are scorned, ridiculed and marginalised in society. From the perspective of Capitalists and the State it has been a remarkable phenomena – they hardly need to intervene at all to influence this narrative.
Nevertheless, some intervention will be required to rewire human purpose away from the “work imperative”. Education will no longer be required to produce efficient units of production, instead they can focus on a curriculum that covers financial literacy, data hygiene, service engagement and content selection – all solid foundations for the digital consumer of tomorrow.
The Civic Engagement Credits Act will go one step further. To structure time and manufacture purpose for it’s people, the State will gamify citizenship to create order and meet social objectives.
Humans will be able to earn social credits which can be exchanged into Sterling-C and supplement both the Universal and Union Data Dividends. The activities that can earn credits can be very wide ranging such as recycling, caring for neighbours, paying attention to certain content, participating in community maintenance or consuming educational material.
This shifts the notion of “work” to that of “quests”. It provides a large number of ways that people can utilise their time and receive reward. This will create new social hierarchies and structure, which citizens can climb within.
If you made it this far, thank you for indulging my own quest into what happens when Capitalists no longer need human labour.
Of course, I haven’t the faintest idea how all this will turn out. But I see and read many different scenarios and views. Since 2022, this question has become more urgent as the reality of AI and robotic automation sinks in.
Whatever happens, I still think there will be Capitalists and State, which is why I looked into the past to see how they conspired together to form the world we know today. They both have deep incentives to work together to produce the society fit for tomorrow.
I am very aware there are multiple different scenarios that people are currently debating. The one I outlined above appeals most to me – I am a practising capitalist with a strong sense of community cohesion. What’s more important though, is that we continue the conversation to shape and influence tomorrow while we still can.
If you have a blog, I encourage you to write up your answer to this question.