The small town constraint is a bit artificial to this problem isn't it?

If you operate a machine shop in a large urban area, have competitors, and access to much improved low cost tooling, would you:

a) lay off a bunch of workers, or b) lower your prices and capture more orders?

Same thing with accounting firms or marketers or business consultants.

Well, it's the same problem with all sorts of free-market capitalism and derivatives. They all believe there's infinite "somewhere else" that resources can come from, or the customers, or the funding etc. But reality is very much finite. And so instead of the theoretical equilibrium we get monopolies and collusion to manipulate markets.

The article, actually, addresses your claims:

> The optimists will tell you this is just productivity gains. The economy has absorbed automation before; agricultural employment collapsed from ninety percent of the American workforce to two percent and civilization continued. David Autor at MIT has shown that roughly sixty percent of today’s jobs didn’t exist in 1940. New technologies create new categories of work. True. But there’s a difference between an observation about the past and a law of nature, and the optimists consistently confuse the two. The agricultural transition took a hundred and forty years. Carl Benedikt Frey at Oxford has documented that the Industrial Revolution took seventy years before wages and employment recovered for the workers it displaced. In the interim, wages stagnated, the labor share of income collapsed, profits surged, inequality skyrocketed, and the political consequences included the Chartist movement and widespread social upheaval. As Frey puts it: “Most economists will acknowledge that technological progress can cause some adjustment problems in the short run. What is rarely noted is that the short run can be a lifetime.”

So, the author believes that the problem with your reasoning that it will take a long time for the niches you are talking about to be filled (lifetime, maybe more), meanwhile things will look quite bad for most those involved.

I am even less optimistic than the author. The new aspect of this workforce displacement is the centralization. Of course, previous advances in automation also caused a degree of centralization, but AI is posed to become super-centralized if you will. There will be just a handful of suppliers and nobody will be able to challenge them, similar to situation we have with microprocessors today. Needless to say this is absolutely not a healthy situation for the world's economy.

the number of functioning machine shop in the US in large urban areas has been plummeting for decades. where there were 50 there are now 3. the customers for machine shops are large production facilities with a need for custom parts. they're all gone. now its little bits of rnd work and some custom architectural design kind of stuff. and the margins are punishing.

ok, so machine shops aren't really central to the argument, but the collapse of demand is.