I think you're operating from the assumption that the fruits of automation will somehow find their way to the population at large. That won't necessarily happen.

It's quite possible that the advantage will go entirely to those who own and manage the businesses that automate their operations. (And indeed, some would say this is happening now.)

If automation reaches its endpoint, where no human labor is necessary, how does capitalism continue to function? What value can members of the public offer in exchange for all the automatically-produced goods and services?

I think if that were to happen, we'd see some kind of major social reorganization. Who knows how that would look? Maybe it would be utopian, and then again maybe it would be some kind of luddite, burn-the-robots-and-hang-the-engineers facism. Who knows.

Thanks for the reply. Yep, I'm assuming that the benefits will get shared (which is not guaranteed) but I think capitalism and exising human charity will work. Here's my amateur economic analysis:

If you can supply widgets more cheaply, you can underprice the competition and capture the market (I'm talking more about basic commodities for survival, food, clean water, shelter, etc.). And of course the other companies will compete, have better robots, etc. and you'll have a race to the bottom (this even happens with 'luxury' goods like USB drives). If I can provide aluminum for cheaper, I can flood the market with it (which drives prices down, but I get the profit).

Secondly, we have plenty of charities -- if advanced labor saving devices existed, governments and others would funnel exising funds to acquire them and put them to use. Why pay for food stamps when you can give everyone their daily bread?

I think capitalism based on survival would eventually have to phase itself out -- it would move to virtual currency where people traded currency for optional goods/services they couldn't acquire with the machines (handcrafted xyz, live concert tickets, etc.).

I may really be on this plant thing, but I imagine a world where, at minimum, we get food/water "for free" from the tireless robotic background workers (like air) and everything else is based on human interest. I think humans have enough demonstrated charity to donate something like that once developed.

But, I think the bigger threat is this: a world where robots are advanced enough to provide everything is probably one where a sufficiently powerful country could take over everything.

At first, yes. Computers were a privilege of rich and intellectual elite, at first. But as you can see, technology gets cheaper and cheaper and more accessible to the general public. Even those who do not have any money at all are able to access it through libraries and stuff.

I think what you are missing is the in between phase where scarcity still exists, but the best way to produce scarce outputs does not involve humans, besides those who own or run the scarce-output-production entities. This seems to me to either produce societies with wild inequities between a very few producers and a very many do-nothings, or the types of socialist utopias that we appear to be really horrible at as humans. The everyone-has-a-magical-everything-maker phase, I agree, that sounds pretty solid.

Good point -- thinking out loud, it seems to me that automation would just drop the price of goods.

Imagine Moore's law applied to food and transportation -- wouldn't grocery stores and fedex have to lower their prices to match competitors? Suddenly food becomes cheaper and cheaper, until you can buy a lifetime supply of rice for $5 (unfathomable today, but you can buy a "lifetime supply" of textual data storage for probably the same price).

I mean, there could be collusion and cartels to restrict supply (diamonds), but something as important as food production wouldn't be kept restricted long (food could become a utility).

"This seems to me to either produce societies with wild inequities between a very few producers and a very many do-nothings"

I would imagine that as the costs of production approach zero, our real life economy will start looking a lot more like the Second Life economy. That is, where everyone is a boutique producer slash experience seeker.