https://np.reddit.com/r/Automate/comments/3gcx5o/how_long_before_automation_causes_the_worst/

R1: There's a few reasonable comments in this thread but there's enough bad econ here to supply an entire week of bad econ threads. Plus I think we have a Marxist where our typical anti LTV arguments will actually be relevant to.

Let's start with this this exchange:

We first have the claim that a basic income is incompatible with capitalism. This is badecon because giving people a ton of money doesn't interfere with the normal workings of markets. Both capitalism and a basic income can work side by side. OP then claims that capitalism will lead to the end of competition:

An interesting read, but really doesn't address the issue. He's right that if one airline becomes fully automated, then the prices will drop and they all will. But what he doesn't address is the fact that this now makes competition impossible, ultimately forcing a massive merger of all companies along the production chain.

Here's what will happen. Each airline will be purchasing the same automated technology for the same price. Assuming a perfect market, of course. Boeing will make x number of automated airplanes or automated system upgrades, etc. Each airline will be able to purchase this at market prices. Soon the one airline that was killing it will see its profit share decrease as every other airline adopts the same technology. Because none of these airlines have labor costs, they'll be able to bring the price of flying down to almost nothing, but at the same time they'll start seeing slimmer and slimmer margins. And guess what will happen, they'll all be bought by Boeing.

This will happen in every industry.

To see why this is wrong let's remember the basic econ 101 perfect competition model. Suppose something happens which decreases a firms costs. Then for a while that firm will enjoy some profits but eventually other firms will adapt the same technology and if profits still exist then at some point more firms will want to enter the market. Eventually the market will settle into equilibrium where firms earn zero profits. Prices will be lower and there will be more firms. So far this is fairly similar to the story that the OP is telling. However the OP goes wrong in claiming that labor saving automation means that competition will collapse. The standard perfect competition model fully explains the their story of automation first leading to high profits followed by a decrease in profits while implying none of OP's doomsday predictions. In fact this process has happened over and over again in many industries without leading a collapse in competition. Farming for instance once was very labor intensive. But now farming is more capital intensive and is still more or less a competitive market. Now its possible that what OP really means is automation will increase the quantity that minimizes average total cost. But automation need not increase the ATC minimizing quantity.

There is also no reason to believe that in the presence of fully automated airplanes that airlines will have zero costs. First of all there will still be variable costs such as gasoline and depreciation. Secondly airliners may still employ labor because it is cheaper or because consumers prefer some sort of human interaction. And why will Boeing still have money on hand to buy all the airliners? If this process is occurring in every industry would Boeing not also have zero profits?

Elsewhere in the thread we've got an example of the [LTV](np.reddit.com/r/Automate/comments/3gcx5o/how_long_before_automation_causes_the_worst/ctwz9fc). Yes machines can produce value. There is nothing special about labor in that regard.