The Automation Paradox: When Your Customers Can't Afford Your Stuff

"Better, Faster, Cheaper, Safer." It's the relentless drumbeat of progress, the mantra of every executive worth their salt. And it’s driving us straight into the arms of automation. This isn't some distant sci-fi fantasy. It's happening. And it's creating a problem, a fundamental crack in the foundation of our economic system. Some futurists call it the Economic Agency Paradox. For those of you running businesses, this isn't academic. This is about whether your customers will still exist in five, ten, twenty years.

The Looming Demand Problem: Who Buys the Robot-Made Widgets?

The previous article laid out the cold truth: widespread labor substitution. Machines replacing people. Not just menial tasks, but the stuff that built the middle class. The consequence? Economic decoupling. GDP keeps climbing, productivity soars, but it's increasingly detached from human effort.

But… our entire system is built on the wage-labor social contract. You work, you get paid, you buy stuff. Simple. But what happens when companies, being rational actors, choose the cheaper, more efficient robot over the human? Your "right to work" becomes meaningless. Jobs vanish, wages plummet. And then what? Who buys the goods and services cranked out by those hyper-efficient machines? Your market dries up. Your business model collapses. It’s a dead end.

Economic Agency: What a Person Needs

Before we dissect the paradox, let’s define "economic agency." It’s a person’s capacity to control their financial destiny. It's what people mean when they talk about a job, health insurance, and financial security. It's the bedrock of a stable society.

In the modern world, economic agency rests on three pillars:

• Labor Rights: Historically, this was the big one. The right to work, to organise, to get paid a fair wage. It built the middle class.

• Property Rights: Owning assets. Real estate, stocks, a piece of the action. It’s how wealth accumulates, how you secure your future, how you pass something on. It’s the engine of progress.

• Voting Rights: Having a say. Influencing the policies that shape the economic landscape.

These three form the unspoken contract in our democracies. But automation? It’s taking a wrecking ball to the first, and most crucial, pillar: labor rights. Human labor, for many tasks, is simply becoming economically obsolete.

The Paradox: Efficiency Now, Extinction Later

Automation promises to free you from the burden of human labor – no more wages, no more benefits, no more HR headaches. Pure efficiency. Zero employees is, from a purely financial perspective, the optimal number. Machines don’t complain, don’t unionize, don’t need vacations. Any rational company will embrace this. It’s already happening and it is accelerating.

But here’s the unresolvable contradiction: when wage payments disappear across the economy, so does consumer purchasing power. The demand for your products vanishes. Your corporate survival depends on customers with disposable income. You’re caught between maximizing efficiency and preserving the very market you sell to. This is what futurists such as David Shapiro and call the Economic Agency Paradox.

The Distribution Problem: A System Built for a Different Era

Our current economic system distributes wealth primarily through wages. It worked fine when human labor was scarce and essential. It’s not working now.

Look at the breakdown of consumer purchasing power in a place like the US:

• Wages: Around 60%. The big slice.

• Property: Dividends, rents, capital gains. About 20%.

• Transfers: Government benefits. About 19%.

Automation will obliterate the wage component. That ratio has to shift. Post-labor economics suggests a future where property accounts for 60%, wages for a meager 20%, and transfers for the rest.

Beyond UBI: We Need Owners, Not Just Recipients

Some futurists see Universal Basic Income (UBI) as a band-aid. It’s necessary, perhaps, to keep the lights on for some, but it’s not the full solution. They say that relying solely on UBI is a dangerous game: central control, dependency, market distortions, inflation risk, and tax flight. It’s a temporary fix that papers over a fundamental structural flaw. It fosters reliance, not productivity.

Futurists such as David Shapiro believe that the real answer lies in broadening ownership. We need to shift consumer purchasing power to property-based income streams. They outline how we already have models for this:

• Trusts and Wealth Funds: Think sovereign wealth funds, community funds. Own assets, share the returns. Like the Alaska Permanent Fund, where simply being a resident gets you a cut.

• Stock Options & Equity: Employee Stock Ownership Plans (ESOPs), or "Patron Equity" where customers earn shares by shopping. Giving people a piece of the company they buy from.

• Royalty Trusts: Monetizing public assets like data, spectrum, or even carbon sequestration. Distributing the proceeds.

• Cooperatives: Collective ownership of infrastructure, assets.

These aren't government handouts; they're market-based solutions that distribute wealth without destroying the market.

The Unsung Heroes: Banks and Counties

This transition won’t happen in a vacuum. Shapiro outlines that we need to leverage existing infrastructure.

Banks: They’re the central hub. As labor income fades, banks become the primary economic touchpoint. They can manage complex ownership schemes, handle KYC, and process dividends. Their survival depends on people having money to deposit and transact with. Their incentives align with yours: keeping consumers solvent.

Counties: This is where the rubber meets the road. They’re the ideal scale. Small enough to experiment without getting bogged down, large enough to generate meaningful data. There are 3,100 counties in the US – 3,100 laboratories for a new economic model. They control valuable assets (land, utilities, zoning) that can feed community endowment funds. They have existing systems for property records, tax assessment. It’s local, it fosters legitimacy, it’s tailored to local needs. It’s economic subsidiarity in action.

The Bottom Line: Adapt or Die

The Economic Agency Paradox is staring us down. Futurists point out that the pursuit of efficiency through automation is smart, it’s necessary for competition. But if we fail to address the resulting collapse in consumer purchasing power, the market evaporates.

Understanding economic agency, and the need to move beyond a wage-dependent consumer base, is paramount. UBI might offer a temporary cushion, but Shapiro is highlighting that true long-term stability hinges on distributing income through broad-based property ownership.

What Gets Measured, Gets Managed: The Economic Agency Index

How do you manage an economy where the old rules don't apply? The old metrics – GDP, unemployment rates, inflation – they're like trying to navigate a spaceship with a horse and buggy. They're becoming useless.

GDP tells you output, but not where the spending power comes from. Unemployment flags labor slack, but ignores a future where non-wage income might flourish. Inflation tells you prices, but not whether anyone can actually buy anything. Consumer confidence? A feeling, not a map.

When wages shrink, relying on these old gauges is like flying blind. We need metrics that spotlight demand resilience, not just production or labor participation.

Introducing the EAI: Your New North Star

Shapiro has proposed the Economic Agency Index (EAI) as a diagnostic tool, a compass for the post-labor economy. It tells you how much household spending power is rooted in ownership returns versus wages or transfers.

The EAI has three core components, reflecting the sources of economic agency:

• Property Share: Income from dividends, rents, interest, capital gains. This is the heavy hitter, boosting the EAI. Ownership income is the future.

• Wages: Still count, but with less weight. We’re not punishing earned income, but its volatility in the automated age means it’s not the bedrock it once was.

• Transfers: Government benefits – Social Security, unemployment, SNAP, UBI, Medicare, Medicaid. Anything paid by taxes.

The formula (which he suggests is to be refined) will be a weighted sum, scaled to a score between 0 and 100. Higher score, more property-based income. The EAI gives you the crucial insight traditional metrics miss: the ownership-based demand capacity of households. It lets you see the income mix at a granular level.

Counties: The Laboratories of the Future

The county level is where Shapiro proposes we test this. Economic subsidiarity – pushing decisions to the lowest possible level – is key.

Why counties?

• Scale Sweet Spot: Small enough to experiment without gridlock, big enough to yield meaningful data. Think of 3,100 US counties as "3,100 national laboratories."

• Granularity: County-level data reveals economic "microclimates" hidden by state or national averages. It unearths regional opportunities – monetise local sunlight, forests, water.

• Experimentation: County leaders can implement "policy tweaks" – land value dividends, ESOP tax credits – and see the EAI impact within a year. It’s A/B testing for economic policy.

• Existing Infrastructure: Property records, tax assessment, residency verification – counties already have the systems. No need to build from scratch.

• Community Legitimacy: Local governance fosters trust. County officials live among the people affected by their decisions. This is crucial for voluntary adoption.

• Hedging Technofeudalism: Distributing ownership at the county level, through things like county wealth funds, prevents power and assets from concentrating at the top. It grounds economic power in democratic communities.

Start local, prove the concept, then scale up. Reduce the risk.

Beyond UBI (Again): Private Ownership, Not Just Government Checks

Futurists believe UBI might be a necessary floor, but it’s not the long-term answer. Broad private ownership beats excessive reliance on transfers every time.

• Central Authority Risks: Big federal transfer programs are political footballs, vulnerable to capture, rent-seeking, and bureaucratic blunders. They lead to financial dependency and excessive state influence.

• Market Distortions: Blanket UBI, treating everyone the same, masks local economic mismatches. It doesn’t incentivize local productivity or investment. Property ownership, however, incentivizes individuals to find productive assets that generate returns, aligning individual action with market efficiencies.

• Information Loss: Centralized payouts blind the market’s "social brain" to local value opportunities. Dividend-seeking behavior, driven by ownership, maintains market information by pushing individuals to find the best-performing assets.

• Fiscal Drag: Ever-growing transfer programs mean higher taxes or debt, sucking capital from productive, yield-bearing assets.

Shapiro believes the goal is to dramatically expand ownership structures and shift purchasing power to property-based income.

Futurists State This Is Not Marxism: It’s About More Owners, Not Fewer

Shapiro is careful to state that Post-Labor Economics is not Marxism, socialism, or communism. It’s not seizing the means of production, not abolishing private property but making attempts to strengthen it. They are attempting to solve post-wage demand by dramatically widening and distributing property stakes across the population.

Shapiro believes this approach is rooted in strengthening private property rights, the cornerstone of economically successful nations. It leverages market-based solutions and decentralized decision-making – far more efficient than central planning.

He believes this is how you measure and understand a post-labor economy. The EAI is your vital new metric. Local action, especially at the county level, and broad-based property ownership are the keys to stability and demand resilience in a world where wages are no longer king. The next lectures will lay out the how-to.

Acknowledgments

Thank you to David Shapiro whose ideas are presented in this article. He is active on YouTube and I’d encourage you to follow his work.