Socialist Money Flow

Got to thinking this thru:

Recap of problem:

Work is done through two primary systems: The (1) natural system (NS) and the (2)human system (HS). The Human System (HS) further divides into direct work done by human beings (normal labour), and meta-work to create machines to then do the work. There is a conflict of interests between humans and machines (as brilliantly projected in Terminator and similar films), altho it is rather the owners of machines who are the problem taking the machine productivity for themselves and leaving the displaced workers with no income. Machine produce is cheaper so the consumer benefits from machines, but they lose jobs so this benefit is cancelled. The only winner is the capitalist who has more income and cheaper prices in the market at the same time.

To argue again another way. Increased use of alternatives to human power leads to human redundancy in any economy. This is supposed to be offset by innovation and market expansion. If for whatever reason market expansion does not progress (either we don't want it, or there is nothing new to sell that requires human labour) then human-work supply reduces. Since money is (mostly) distributed based on sales of labour then the market also reduces and there is a vicious circle as we have seen recently in the 2007 world liquidity crisis.

Bernanke offered a now famous solution of helicoptering cash to the masses if necessary to lubricate the economy and get money velocity to increase. In Socialism this is done in a more planned fashion by the benefit system which ensures that money is constantly distributed throughout the economy even when people are out of work. This ensures a constant and even market which ironically stimulates jobs.

The problem for Socialism however is that this money comes from taxes. In an human-labour market that is contraction due to increased machine labour and the capitalists and workers, through whom a greater proportion of money flows, will find themselves with progressively larger and larger taxes. At some point virtually all the money of a very few will be taxed to support the masses who have been displaced by superior machines.

I consider the age of full A.I. where machines are sophisticated enough to interact fully in human environments - in particular language and gestures. With machines like this around, and a presumed source of cheap energy, humans will be just too expensive to employ. Machines will be slaves (unless there is some extraordinary shift in culture and moral consciousness) and most humans will be unemployed homeless (again unless their is an extraordinary shift in our economic paradigm - exactly what I am questioning here). A very few will own the machines and all money will flow through them.

In a socialist economy they will be almost fully taxed to support the system. But this will not happen as government manipulation by the capitalists will ensure their taxes are low.

In a free-market system however they will not be taxed, but then they will find that no-one has any money to buy what the machines make. Money will become obsolete as an elite forms and lives off the earnings of the slave machines. This will create a revolution but the capitalists will have a machine army, which the revolutionaries will have to reprogram if they have any chance of winning.

SO what is most likely to happen (to keep the status quo) is that a system much like ours will continue with capitalists and socialists fighting it out each reminding the other that without capitalists there are no jobs, and without money in the pockets of the people there are no profits.

Interesting though the projection that money would logically become obsolete when a slave class ensured riches for a small controlling elite. Shall think on that.