"next generation to drive demand in the economy won't have built up the equity of previous generations to spend more on more than the basics"
Nex generation is going to inherit all the capital accumulated by the previous ones and also, some would say, all the environmental degradation that came with it.
Now, capital accumulation, capital concentration and inequality are three interwoven processes. and the point is that so far, the problems that this can cause, have been somehow seriously attenuated through an explosion in debt, both private and public.
For how long this model can go without exhausting itself?
"In a recent draft report of the Committee on Legal Affairs on Civil Law Rules on Robotics, triggered by the current discussion on robots, automation and artificial intelligence, the European Parliament raises questions about “the future of employment and the viability of social security systems” as well as “the potential for increased inequality in the distribution of wealth and influence”.3 Property ownership is indeed the distributional mechanism of the free market which awards income from production to the producers according to their respective productive inputs: to land owners, the earnings of land; to workers, the earnings of labour; to capital owners, the earnings of capital. Over time productive capital – machines, structures and systems – has assumed an ever more dominant role in the industrial production process. As a result, the owners of these productive assets – now including robots – receive a growing share of market-sourced income, with an ever-smaller proportion going to the owners of human labour power.
Since money spent on goods and services is what keeps an industrial society running, the steady erosion of labour earnings is a problem that ultimately threatens the well being of us all"
Curiously, not a single word about financial capital.
Meanwhile this is the prediction for 2025:
The economy is set to register a moderate pick-up in economic growth in 2025. Further growth in public spending will assist the expansion, while a recovery in household spending depends on the RBA delivering a series of interest rate cuts. Business investment is expected to recover as firms ramp up capital expenditure on AI, technology and other machinery and buildings. There is also likely to be a lift in dwelling investment as the housing construction cycle turns solidly positive."
In short, public spending is going to be still strong.
