Economies don't just cut out large populations like that. Automation just makes things cheaper, so people, and more importantly businesses, will have more money to spend, either improving their lives or making their businesses more efficient in ways robots can't, or are too expensive for. People will always find ways to make money, and always want things to improve their lives or make them more money. Robots aren't going to change that.
Also, if robots start making robots, which will be pretty easy, then the barriers of entry in a lot of industries will be lower, introducing competition and driving prices down even further.
If we go really far into the future, we could see automation becoming a basic commodity, leaving less and less work to be done by humans, eventually reducing the human economy to occasional bartering of unique products or services.
Economies don't just cut out large populations like that.
Sure they do. Manual labour in the UK is an example of that. The coal industry, which actually benefited from breakthroughs in technology, such as steam engines and the spread of electricity, was killed by other breakthroughs in technology. It didn't have an effect on the country as a whole, but it did have a devastating effect on certain areas where a lot of people worked in the coal industry.
I live in an area where the coal and steel industry used to be huge. When it disappeared, everyone was fucked and it has not recovered since. I am actually going through this exact thing at the moment because I work in the steel industry and the government is refusing to buy us out.
The difference with automation across all industries is it isn't just going to kill certain areas, it is going to have an impact globally.
People will always find ways to make money
I think this is true, and it's why I think this will be a temporary problem rather than a permanent one. But it will be a problem, mainly due to there being basically no historical precedent for this at all.
People will always be spending and making money. Not necessarily in the same ways all the time, but humans are never satisfied.
Could you explain in more detail what happened to the coal industry in your area? Did people leave, or did everyone stick around?
I think automation is going to make humans unemployed, at least for a while. Someone made a post about this a while ago, but I can't remember who it was, maybe soylentglitter.
My reply to that post was something along the lines of this:
We have already been through a period of automation. The invention of new machines that perform x function has already happened, but we haven't reached the point where the machine operates on its own. For example, a farmer still has to plough a field, he just has a better plough. The plough also has to be designed and produced by other people or machines before the farmer can use it. This is true in many other cases. Cashiers are slowly being replaced by machines that people can use to buy items, but the machines still have to be designed and produced by many other people.
The real problem lies in the next step of automation. What happens when the machine starts to create the machine, or the machine becomes so good at what it does, it starts to take over different, more advanced jobs? Humans will still be involved in the process, but it will wipe out a shit ton of low skill jobs. There obviously needs to be something to fill the void left by the automation. Many different things could happen at this point. We might experience a huge boost in art/film/music industries, things that machines can not do. People may continue to do low skilled work for lower and lower wages if companies are unable to afford or implement machinery to take over.
I think there is something to be said for introducing minimum income when this starts to happen. What is going to happen to the generations of people that went through the education system when there wasn't an increasing demand for engineers, IT specialists etc.? Depending on how fast technology advances, I might fit into that bracket. A large percentage of the global population is going to be well and truly fucked at some point.
And then it'll probably be fine. An adjustment period of 2-3 generations will sort everything out.