There is a really serious problem here.
As robots/machines/computers take over more and more of the "less-rewarding" jobs, at some point in time the people thrown out of work will not be capable of handling the "more-rewarding" jobs for which there is still demand.
Does anybody seriously think that the average bus driver thrown out of work by technology is intellectually or emotionally capable of becoming an effective writer of apps for Android?
For 200+ years the system has functioned as JG states, with of course many rough patches. But past performance does not necessarily predict future performance.
What we're essentially talking about here is productivity, the amount of human labor required to produce goods and services. If you extend the productivity chart indefinitely, at some point infinite goods will be produced with zero human labor.
How do we organize and structure such a society? Most people seem to derive their basic sense of self-worth and purpose from their employment. What do we do when there is no economic demand for their services? Such a society is likely to be wealthy enough to provide for them materially, but what about the psychological benefits of working? What will replace it?
“What will replace it?”
Everyone will become a blogger.
“Most people seem to derive their basic sense of self-worth and purpose from their employment.”
I can think of many things I’d rather do than work for the sake of work.
For years economists and others have worshiped the false god of productivity. What we are seeing is productivity’s end game. Karl Marx might have written on this.
http://shanfaraa.com/2012/08/marxism-and-robots/
RE: “What about the psychological benefits of working? What will replace it?”
We can try the Detroit solution - crack pipes and manufacturing fatherless babies.