I would love to believe that the service sector will be able to absorb the displaced labor without creating insane, poisonous power dynamics that put large sections of the population into an unnecessarily horrible position. For the very reason that I would love to believe this, I am cautious. Do you know of any other reasons why I should let myself hold this belief? I don't find these very convincing:

* Faith

* Optimism

* Vague comparisons to historical events that differ in every detail imaginable

You're asking if the new jobs of tomorrow will suck harder than the McDonald's of today, and I really don't know. It's easy to assume that more essential, "useful", jobs will be better paid, but if you ask farmers you'll find out that that's not necessarily true. That said, while Notch may feel like he is king of the world right now, most indie game developers don't, I think.

Yup. Supply and demand is the name of the game, "useful" doesn't have anything to do with it.

I'm not following how the "service sector" is any kind of answer to the problems and issues we are facing with regards to automation and labour.

It's not necessarily the answer, or even a good answer. But the service sector has been growing for a long time. And it has become one of the huge growth areas due to the software revolution. Just look at the types of jobs produced by Uber/Lyft/et al, and the many delivery services that are popping up. They're mostly low paying jobs for the most part, which in my mind, is not the answer to the destruction of jobs happening now.

I agree, but I'm not questioning whether or not the service sector is growing. The rise of the freelancer/contractor in any given industry seems to have grown exponentially just in the last decade alone. If we assume this to be the "answer" the free market has, I simply do not see how this is sustainable on a large scale. It seems to me that we would rapidly have an excess of service providers in an ever-shrinking pool of service consumers. Furthermore it would introduce a whole new set of issues from exploitation to underbidding/cutting.

Not really, even the service sector is being heavily optimized these days. What are we going to do once we optimize away banks and real estate agents?

Live entertainment and ever fancier dining, I suppose. Also pointless luxury goods and fashion. We'll find something to spend our money on and the jobs will move there.