One of the foundational assumptions of economic theory is that human wants are unlimited. In concept, no matter how much we produce, it would never be enough to sate our avarice.
In practice, of course, human wants are actually large but limited. There are only so many hours in a day, you can only drive so many cars, can only eat so much food, etc. There is a fundamental upper limit to how much you can usefully spend (and, for what it’s worth, this limit is well below the income of your average billionaire.)
So what happens when a society is finally positioned to make as much stuff as everybody not only needs but wants?
It turns out there’s actually a fair amount of theory trying to deal with a very specific market failure, where the Market Clearing Assumption doesn’t produce the expected result. This theory, developed by John Maynard Keynes and others, revolves around labor markets and the mystifying problem of unemployment. According to the Market Clearing Assumption, you see, involuntary unemployment (that is, unemployment) can’t exist. Any labor on offer would be sold at whatever price the market would bear.
And yet, unemployment clearly does exist. There are a couple of explanations: markets aren’t as perfect as they’re modeled as being. Finding work can take time (frictional unemployment) and changes in the overall economy may render the skills of some workers irrelevant or unneccessary (structural unemployment,) in turn requiring time to retrain. But there is a third type of unemployment (cyclical unemployment) that simply results from a notionally temporary excess of labor.
Consider, though, a society that can still live comfortably while in this depressed condition. The usual remedy (fiscal extravagance to increase aggregate demand) would seem to be inappropriate. Why have workers dig and fill holes simply because we have nothing else for them to do?
Because labor-saving devices only get more and more effective as time goes on, and because human wants are not truly unlimited, this situation would seem to be inevitable on a long enough timeline. Indeed, the middle-class lifestyle of the First World is already frequently criticized for overconsumption, even as the more enlightened economists scream from the rooftops that we must spend more to put people back to work.
But if your problem as a society is not that you don’t produce enough but that you have an excess of labor, shouldn’t you reconsider the foundational morality of the idea that everyone should work? Involuntary employment, after all, is the definition of slavery.
Why should people be forced to work or starve if society doesn’t need them to?