For decades, economists championed technological advancement as an engine for universal prosperity: higher productivity would expand the economic pie, allowing workers to enjoy growing real wages. Yet this narrative is unraveling in the face of relentless automation. As artificial intelligence, robotics, and platform apps like Wag commodify even service jobs, capital holders capture ever-larger slices of wealth while labor's share shrinks. The result? A surplus of workers, stagnant incomes, and a system struggling to distribute goods effectively—despite abundant production capacity.

The Hollowing Out of Labor

Traditionally, when automation reduced manufacturing jobs, the service sector absorbed displaced workers. But now, technology is encroaching on services too. Apps such as Wag centralize gig work like dog-walking, funneling profits to corporations while eroding local, human-driven businesses. This mirrors broader trends: AI tools like ChatGPT automate cognitive tasks, and platforms like Facebook and YouTube monetize attention through invasive ads, creating value that doesn't translate into broad-based wage growth. As one Hacker News commentator observed, "Technology and automation enable capital holders to take an ever larger slice of the pie because to satisfy consumer demand they need ever fewer people in production per unit product."

This concentration isn't just inefficient—it's destabilizing. When an economy produces enough to meet demand but workers lack purchasing power due to job losses and wage suppression, consumption falters. Add in globalization, where goods are made overseas and domestic purchasing power relies on fragile currencies, and the system risks implosion.

Scenarios for a Fractured Future

The commentator outlines stark possibilities: democratic socialism with universal basic income (UBI), societal collapse into civil strife, or a regression to agrarian simplicity. UBI, often touted as a tech-friendly solution, faces skepticism; as noted, people are entrenched in a "transitional liberal economic capitalist system" ill-suited for an AI age. Meanwhile, the current tech ecosystem—symbolized by "ChatGPT, ads for toenail fungus on YouTube nature documentaries nobody wants, and Facebook"—fails to generate sustainable economic foundations. The grimmest outcome? Conflict and fragmentation, potentially resetting society to pre-industrial norms.

For tech professionals, this signals urgent ethical and practical challenges. Developers building automation tools must consider downstream effects on employment, while leaders should advocate for policies that redistribute gains, like algorithmic wealth taxes. The path forward requires reimagining innovation not just for efficiency, but for equity—lest the very tools meant to empower humanity hasten its unraveling.

Source: Hacker News comment, https://news.ycombinator.com/item?id=44832114