I always thought demand was limited by factors such as the size of one’s stomach the speed at which clothes wear out or go out of fashion, and most importantly income among other things. I’m actually kind of surprised to hear that unlimited demand was a fundamental tenet of economics.
I always thought demand was limited by [..] and most importantly income [..] I’m actually kind of surprised to hear that unlimited demand was a fundamental tenet of economics.
The problem seems to be confusion as to what economists mean by demand and “unlimited demand”. What they mean by demand is not a static number but a demand curve relating how much of something you would buy depending on its price, i.e., not just what you’re buying now but also what else you would buy if you could. Thus by “unlimited demand” they mean that there is always more you would buy if you could afford it.
Historically it has never worked out that way. When a society gets richer the people eat more and better food, buy more clothes, live in bigger houses, buy cars and appliances, travel more, and so on. Based on the behavior of rich people we can see that a x10 or even x100 increase from current wealth levels due to automation would just continue this trend, with people spending the excess on things like mansions, private jets and a legion of robot servants.
Realistically there’s probably some upper limit to human consumption, but it’s so far above current production levels that we don’t see much hint of where it would be yet. So for most practical purposes we can assume demand is infinite until we actually see the rich start systematically running out of things to spend money on.
I always thought demand was limited by factors such as the size of one’s stomach the speed at which clothes wear out or go out of fashion, and most importantly income among other things. I’m actually kind of surprised to hear that unlimited demand was a fundamental tenet of economics.
The problem seems to be confusion as to what economists mean by demand and “unlimited demand”. What they mean by demand is not a static number but a demand curve relating how much of something you would buy depending on its price, i.e., not just what you’re buying now but also what else you would buy if you could. Thus by “unlimited demand” they mean that there is always more you would buy if you could afford it.
Historically it has never worked out that way. When a society gets richer the people eat more and better food, buy more clothes, live in bigger houses, buy cars and appliances, travel more, and so on. Based on the behavior of rich people we can see that a x10 or even x100 increase from current wealth levels due to automation would just continue this trend, with people spending the excess on things like mansions, private jets and a legion of robot servants.
Realistically there’s probably some upper limit to human consumption, but it’s so far above current production levels that we don’t see much hint of where it would be yet. So for most practical purposes we can assume demand is infinite until we actually see the rich start systematically running out of things to spend money on.