Essay / Economics

The Mass Devaluation of Humans

"The most decisive mark of the prosperity of any country is the increase of the number of its inhabitants." - Adam Smith in ‘The Wealth of Nations’ (1776)
The way economies function, it’s hard to believe that the above statement would ever be deemed false. But what its author failed to further state or take into account was that humanity’s drive to play god and create beings other than themselves would eventually disprove the theory, causing one of the biggest paradigm shifts in economics and sociology. For now, let’s not get ahead of ourselves, as the statement still stands true and the paradigm shift I am referring to hasn’t occurred yet. It’s merely a thought.
The predominant argument put forth by ‘the population crisis’ theory is that a dwindling population will result in economic catastrophe. My theory ‘The Population Curse’ puts forth an opposing argument, where I state that a larger population will end up being a disadvantage to an economy. The population crisis theory fails to take into consideration one crucial variable: technology. I wouldn’t completely blame the opposing side for overlooking this variable, as until now, technology has mostly complemented humanity in production while giving them room to re-skill and re-integrate around it. Although, for the first time ever, technology is starting to show signs of holistically displacing humans from their roles in production. The probability of this eventuality is rising by the day. Why? Technologists are on a trajectory to create better humans than any human (at least in terms of productivity) due to the anatomical differences between humans and technology, where technology isn't limited by biology, unlike ourselves.

Let’s be clear: My argument isn’t merely about technology displacing human roles - many already predict this. My argument, on the other hand, is the second order effects of such an eventuality - the economic + sociological paradigm shift it causes.
Prior to making the argument, we ought to dig into the first principles of an economy and why a large population has predominantly dictated economic success: the foundation of any economy is consumption & production, or more generically looked at as demand & supply, i.e., the Yin and Yang of economics - opposite but interconnected forces. Larger the population, larger the Yin/Yang pie (more people = more producers = more consumers). Although, when either side of the equation is impacted independently (say, lesser production), the opposite side is automatically affected (lesser production = lesser supply = higher prices = lesser consumption) due to their interconnectedness. Ergo, Yin and Yang.
Having understood the production/consumption dynamic, it’s clear that more humans = more economic activity. When more humans work, more production occurs. When more humans produce, more humans get paid. When more humans get paid, more humans spend. When more humans spend, more humans are incentivised to produce. Causing an infinite loop. Break just one strand of this loop, and the entire loop is disrupted.
Considering the above dynamic, with the assumption that AI will replace humans in the production half of the economy, the consumption side will automatically break - humans not being involved in production = humans not getting paid = humans not spending = humans not consuming.
This human displacement leads to unemployment en masse, and for the first time ever, the unemployed segment of the population will become the majority as compared to the whole, flipping the employed segment of the population. Going by the past, every time there’s been a rise in unemployment, there’s also been a rise in government intervention through social welfare - greater the number of unemployed people = greater the social support required. Considering that the majority of the population will be unemployed, rather than a minority, a larger population will be considered a curse, instead of a boon. Furthermore, with most consumption being government funded, we'll move from capitalistic and hybrid economies to deep socialistic states.

This theory holds true on the assumption that the way economies currently function are going to continue functioning the same way, without a major overhaul of the entire system.
With humanity as a collective already aware of the impending consequences of innovation, it should not come as a surprise that human ingenuity will eventually cause the devaluation of humans in an economy. While the easy solution would be to intervene and halt progress, the right solution would be to upgrade the systems bound to be disrupted by it - as we've done ever since our species could use its ingenuity to innovate.