alt Hacker NewsOne of the theses of JM Keynes (of "Keynesianism" fame) in his General theory was that the rich save and the poor spend. That's been an ongoing assumption of state policy for a while now. One factor to consider is that today we seem to have a mid-level consumer sector - a group of people with high ($100K+) incomes who still spend nearly all that income. This group may provide the demand to support the investments of the super rich while still allowing a large percentage of people to sink to the underclass.
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The saying is "workers spend what they earn and capitalists earn what they spend".
Capitalists don't need worker demand to support their own consumption; spending out of profits directly supports profits overall.
It would be something of a consumption race to the bottom, however. They wouldn't be any better off vs if we supported adequate demand for everyone, but they might control a bigger slice of the (much) smaller pie.
That's already happening to some extent. Consumption in the US is very top heavy right now, and the top 40% of households by income already account for over 60% of all domestic consumption.
Those with >~$350k spend drastically less on consumption, funneling most into wealth generating assets
Those <350k->~$100k spend almost 86% of their income on consumption
Everyone else doesn't have enough purchasing power to matter to the market, spend greater than what they earn and have a dependency on debt.
The economy now is already at the point where it doesn't need the bottom 50% to even participate to continue current growth, outside of providing the labor necessary to fuel the consumption of the middle bracket.
The problem is AI/LLM automation is threatening the exact middle bracket that is sustaining the current consumption based economy. If we automated all the jobs of the bottom half of the economic underclass, the ~$100k+ group could run in a closed loop. Instead, we're trying to automate the labor of the very group thats sustaining the system.
The loss of white collar work is going to cause a huge cascading failure that we aren't ready for.