> I mean, if the masses are destitute, they can't afford the stuff being made at those fancy factories, so the owners of those factories won't make money.

I think that's beside the point. Why would the "aristocracy" owning the factories care about money, when they have all the goods (or can trade for them with other aristos)?

It's not like they need money to pay other people (the destitute masses are useless to them). With their only inherent "capital", --the ability to work-- made worthless by automation, the destitute masses have no recourse-- they get slowly extinguished, until only a tiny fraction of humanity is left.

> Why would the "aristocracy" owning the factories care about money, when they have all the goods (or can trade for them with other aristos)?

In this scenario, they only need enough factories to meet the needs of themselves and the other aristocrats. Which means there will be massive demand for goods for the common people, which means there will be jobs for people. The only way your scenario works is if the aristocracy produces enough goods for the entire world cheaper than anyone else can, but also making them too expensive for anyone to afford. But that would mean the factories are producing enough goods for everyone despite the fact to very few can actually buy them. Piles of good wasting away outside the factory. The only reason to do this is if the aristocracy was malicious: trying to hurt the rest of humanity despite the fact that there is no real benefit.

> In this scenario, they only need enough factories to meet the needs of themselves and the other aristocrats.

That could still end up taking all of the planet's resources, if enough aristocrats try to maximize their military capacity to protect themselves or play some kind of planet-wide game of Risk, or if they create new goods that require absolutely insane amounts of resources.

I mean, ultimately, the issue is that the common people have nothing of value to trade except for resources that they already own, and no way to accumulate things of value. Because of this, the aristocrats will never have an incentive to sell anything to them: if they had any use for the common people's resources, they would just take them. So I think there are three possible outcomes:

* The aristocrats' needs become more and more sophisticated until they need literally the whole planet to meet them, destroying the common people in the process.

* The aristocrats provide to the common people, no strings attached, out of humanism (best case scenario).

* The aristocrats take what they need and let the common people fend off for themselves, creating a parallel economy. In that case the common people would have jobs, although they would live in constant worry that the aristocrats take more land away from them.

What about a scenario in which the common people revolt and kill the aristocrats?

It has happened before.

That just hits "replay" and provides convincing evidence to any new or surviving overlords that the capabilities of the masses must be suppressed more successfully next time.

Sure, if they can get past the aristocrats' killer robot army.

What matters is the total size of the market and the total size of the labor pool. If the Hyperclass have more wealth than all of humanity had prior, they don't need to sell to the masses to make money. If the labor pool is mostly machines they own, they don't need to pay the masses, or even a functioning market among the masses to enable it. In the degenerate case, where a single individual controls all wealth, if they have self-running machines that can do everything necessary to make more self-running machines, that individual can continue to get richer (in material goods; money makes no sense in this case).

In such case what stops the masses to create a parallel economy of their own?

I imagine that would happen, but as soon as the size of their economy was large enough to attract the notice of the Hyperclass, or even just one member, it would be completely undercut by them. I don't know what an equilibrium state would look like.

I beleive that technology would still drip, if not flow from the elite world to the outsiders, and eventually they yould maybe leave the planet, for example, and leave the elites in their world, something like in Asimov's tales where the solarians and auroreans lived comfortably with their robotic servants and autofactories happily ever after, until extinction.

Money is just a stand-in for resources and labor, and if automation makes labor very very cheap, the rich will only need the natural resources the poor sit on, not anything from the poor themselves.

Which means these alleged poor will be in the same position everyone on the planet is right now, without having this magic automation.

Alleged poor? When machines are cheaper than humans for any given task (as a result of both AI and robotic improvements) human beings will be destitute except for any ownership of resources they already have and can defend.

That means the vast majority of people will have no means of income or resources, unless they appropriate the use land or resources they don't own in a shadow economy.

But the appropriation of resources is not likely to be perceived positively by those that own the resources, given that ownership is the only thing separating the rich from the destitute.

It's a classic tragedy of the commons scenario.

If you as a manufacturer move to a jobless production system, you gain net margin.

If everybody moves to jobless production, the topline demand shrinks radically.

Yet, for each individual mfg, the optimal choice is jobless production (aka, "loot the commons", aka "defect").

Except that at some point the very rich will have enough AI systems in place to provide for each other.

At that point, the economy will continue to grow, despite what will seem like an economic disaster to most of the human race.

This happens all the time to other species today, where humans suck up all the resources leaving incumbent creatures to die off.