I'm not sure this is true. If all the things people are doing are done so much more cheaply they're almost free, that would be good for us, as we're also the buyers as well as the workers.
However, I also doubt the premise.
The whole justification for keeping consumers happy or healthy goes right out the window.
Same for human workers.
All that matters is that your robots and AIs aren't getting smashed by their robots and AIs.
Doesn't this tend to become "they're almost free to produce" with the actual pricing for end consumers not becoming cheaper? From the point of view of the sellers just expanding their margins instead.
Over the last ~ 50 years, worker productivity is up ~250%[0], profits (within the S&P 500) are up ~100%[1] and real personal (not household) income is up 150%[2].
It should go without saying that a large part of the rise in profits is attributable to the rise of tech. It shouldn't surprise anyone that margins are higher on digital widgets than physical ones!
Regardless, expanding margins is only attractive up to a certain point. The higher your margins, the more attractive your market becomes to would-be competitors.
[0] https://fred.stlouisfed.org/series/OPHNFB [1] https://dqydj.com/sp-500-profit-margin/ [2] https://fred.stlouisfed.org/series/MEPAINUSA672N
This does not make sense to me. While a higher profit margin is a signal to others that they can earn money by selling equivalent goods and services at lower prices, it is not inevitable that they will be able to. And even if they are, it behooves a seller to take advantage of the higher margins while they can.
Earning less money now in the hopes of competitors being dissuaded from entering the market seems like a poor strategy.
So who is right?
Moreso, by making such a magical powerful AI as you've listed, the number one thing some rich controlling asshole with more AI than you, would be to create an army and take what they want because AI does nothing to solve human greed.
UK productivity growth, 1990-2007: 2% per year
UK productivity growth, 2010-2019: 0.5% per year
So they're both right. US 50 year productivity growth looks great, UK 10 year productivity growth looks pretty awful.
Perhaps some kind of garanteed minimal income would be implemented, but we would probably see a shrinkage or complete destruction of the middle class, and massive increases in wealth inequality.
Only in very simplistic theory. :(
In practical terms, businesses with high margins seem able to afford government protection (aka "buy some politicians").
So they lock out competition, and with their market captured, price gouging (or close to it) is the order of the day.
No real sure why anyone thinks the playbook would be any different just because "AI" is used on the production side. It's still the same people making the calls, just with extra tools available to them.
Of course the problem is whether or not it could be controlled, and in that case, the best hope is simply 'it' being benevolent and naturally incentivized to create such a utopia.
Weird that the field of economics just keeps on existing.