What I always come back to is this: Why does it matter what the very richest do? Worst case the economy operates approximately as it does now (maybe with us knowledge workers knocked down a few rungs). But like, the rich can't eat _all_ the food.
I feel like the most likely outcome is that the quality of life of the bottom 90% is overall better than today. HN'ers quality of life is maybe worse than it is today.
Where do you live? The rich will own all housing.
Presumably if we're all unemployed or employed in jobs that have zero economic worth to them, they'll buy all of our houses, build a bunch of big grey boxes for us to live in like a human zoo, build even bigger and more tasteless McMansions for themselves, and pass legislation that makes it illegal to live near them or inconvenience them.
The quality of life for the bottom 90% of the world has been getting better because they were so desperately poor that they could rely on economic growth to help them. At some point they're going to be rich enough in commodities that they start looking to buy things like houses or start businesses, at which point they'll find that asset prices are rising faster than their own wealth because of growing inequality, and they will look at their big grey boxes full of shoebox apartments and start to become unhappy too.
- capital / limited goods
- allocation of labor
Things like land are a limited commodity. Concentration of ownership usually comes with rent extraction. Because you need to live somewhere, but available locations are finite (and supply can even be controlled, and is). This means that you can end up with a cartel scenario where increasingly normal peoples previously disposable income is tied up in an increasingly large % to those fixed costs of living. This is arguably well under way in some countries.
The second point is, the richest enjoy goods like personal yachts, private planes, luxury restaurants. If a lot of labor is increasingly allocated to producing highly inefficient luxuries, it's essentially wasted. You might have hundreds of businesses employing thousands of people or machines, but the productivity of their work is essentially all going into products consumed by a few people. I'd say a limited amount of this is a good thing, it's a normal part of the proliferation of choice enabled by capitalism. But taken too far you return to a historic economy where most peoples productive life is spent serving a tiny elite, while living in poor conditions themselves.
In our financial system, your income as an individual has to be significant enough to send a signal to produce the goods you want. If this ceases to be true for even a significant minority of people, you will find consumer choices and available quality decreasing for those people, which is a real problem. This is to a lesser extent happening in some segments of the economy.
This is also largely the conclusion of classical economics (i.e. Adam Smith) and the argument was developed in great detail by Riccardo, George (who explicitly considered the no-labor-required case in 1800s), and many others.
This is history, not a random hypothesis. Feudal serfs had the ways and means to bootstrap, but in fact lived worse than their pre-feudal ancestors.
I actually have a random thought that it is this innate human drive that causes society to be mostly employed despite massive differences in technology and productivity across geography and time.
What if the driver of employment is not efficient return of capital, but satisfaction of human mind?
Is it not conceivable that we won't find a way to do so, and that consumption and economic activity will ultimately decline?