Productivity in the future

[iflyboats]

Is it possible for a capitalist country to become so productive and wealthy that most people can live comfortably on investment dividends alone? Will we ever see a day when you can buy a few shares of stock and pay for basic living expenses on the returns alone, with no need to work? Not that working would ever be undesirable, but it's just interesting to think about whether such a level of productivity is possible.

[Dante]

Is it possible for a capitalist country to become so productive and wealthy that most people can live comfortably on investment dividends alone? Will we ever see a day when you can buy a few shares of stock and pay for basic living expenses on the returns alone, with no need to work? Not that working would ever be undesirable, but it's just interesting to think about whether such a level of productivity is possible.

If you think through the implications, I think you'll see that a future like this doesn't make much sense. Why do investments pay dividends in the first place? Let's say you invest in a company; why would that stock's value go up all? Generally, for an investment to yield returns in the long run, the investment must be in something productive, something that produces real resources. Stock values go up (over the long term) because the company in question is producing things of value effectively. Without people working and producing, this base is undercut. The economy isn't just something productive machine independent of the choices of the people participating in it. Without productive work, there is no prosperity. Wealth doesn't grow (or even maintain itself) automatically; without production it would all be consumed in short order.

Thus, what we have seen and what we will continue to see is that people's definitions of 'living comfortably' continuously change along with the technological capacities, and as a result the vast majority of people will work to attain that standard. Economic theories which claim that the problem of production will be essentially solved once and for all at some point (such as Marx's ideas about capitalism laying the productive groundwork for a following communist stage to be viable) are invariably mistaken.