The age old model of a financial transaction and exchange of goods is necessarily going to become unsustainable when production costs approach zero.
The thing is, production costs will never reach zero. There will always be something that needs producing, and when it gets to the point where TVs are so cheap to produce they no longer become a luxury item and become a commodity item, and the price drops to near zero, other devices which require more resources and more skills to produce will replace it.
Take for example the TV itself. In the office yesterday we were discussing with some of the older staff how TVs used to be rented and the actual cost of a TV to the consumer was near £8000 in modern money, inflation adjsuted. That's as much as a small car!
This being the case we can see how much easier it has become to produce a TV due to advances in manufacturing technology. Things that were impossible 50 years ago are trivial now. What about the PC you are typing on right now? 50 years ago any form of computer would have been domain of big blue-chip companies and universities only with multi-million dollar budgets regardless of that computer's actual processing power.
I can imagine that within 50 years something new will take the place of whatever we think is expensive and high tech now, and that will be expensive and demand a lot of human and manufacturing resources. It could be (just theorising here) personal space or air travel, or made-to-order genetic modification, a new form of personal power generation. We just don't know, but we do know that history shows it will always be more complex to build than whatever came before.
Standing on the shoulders of giants, and all that...
You're right, and you're making my point for me. Production costs will never reach zero, but I do think that the cost of production per unit is asymptotic and approaches zero. Each increase in production efficiency is a slide down the asymptote, closer to zero.
The "cost" of an item is always going to be greater than zero. If even one person expends a minute of energy thinking about a product to make it exist, it has costed someone energy. When you look at an expensive television set, there are hundreds or thousands of engineering hours put into designing it, the electronics, the hardware programming, testing, etc. For the sake of argument, let's say that the development costs were 20,000 man hours. If we have mastered the raw resource acquisition, the refinement of those resources into usable components, the assembly of those components into a product, and the shipping of that product to a market, and we've streamlined this whole process to such a level that the actual human effort cost is about 2 minutes per product, then producing and selling one million units gets cheaper and cheaper on a per unit production scale. The more televisions we can produce, the more the 20,000 hours spent on R&D begin to look like a drop in the bucket.
Take the automobile assembly line as another example to illustrate my overall point in regards to technological progression and its relationship to capitalism. At the turn of the 20th century, Ford came up with his first automobile. It was assembled by hand and took a long time for it to be constructed. Demand increased. In order to keep pace with demand, Ford increased the speed and efficiency of production by inventing the assembly line. By lining up a bunch of people who performed the same task over and over again, he could pump out cars very quickly with a standard and consistent level of quality. The assembly line employed a lot of people, so the city of Detroit became a boom town fueled by the auto industry. It was one of the most prosperous cities in America for many decades. Over time, increases in assembly line efficiency eventually meant that fewer people were needed to produce the same car. So, they could either create additional lines or reduce the labor. They did both. In the last 20-30 years, auto assembly lines have been almost all but automated. A majority of a car is built by robotics. Robots are superior to people because they don't ever get bored, they never get tired, and they excel at performing the exact same task, exactly the same, every time in a controlled environment. The production of an automobile on an assembly line now consists of just a few people, and their job is mostly to just oversee the robots. Without a doubt, there has been a technological progression in the production efficiency of automobile manufacturing. Today, Detroit can pump out thousands and thousands of new cars every single month with a near skeleton crew of people relative to the turn of the 20th century. But, what about the economic outlook of Detroit? Surely a city which builds most of the cars in America would be extremely prosperous, right? Nope! The city of Detroit is a shithole where you can buy a rundown house for $10,000. There are no jobs in Detroit.
The auto industry and Detroit are just a microcosm of the grander fate of capitalism itself. Detroit is just one city, and the auto industry is just one industry. On a larger, global economic scale, increases in production efficiency reach closer and closer to an asymptote of maximum minimal cost. Human beings get replaced in manufacturing, and gradually, an economy shifts from a producing economy to a retail and services economy. Drive through most towns these days and look at the businesses. It's almost all strip malls and service industry jobs. It's depressing. Each service industry job is a leech on the economy. It doesn't produce anything which can be exported abroad to bring in an influx of fresh capital. Instead, the service industry just survives off of the existing capital in the local region. Gradually, even these service industry jobs will face efficiency improvements or go out of business because they can't compete against those who do. This means less jobs all around and capital in the local economy gradually gets siphoned off.
Let's get really, really far out and crazy for a moment. Like, really nutty. Let's imagine that someone, somewhere has managed to create an artificial intelligence which brings about the AI singularity. The AI goes into an infinite loop of self improvement and learns how to do even our knowledge based jobs which we'd all thought were safe from automation. The AI learns how to design beautiful sky scrapers. Build bridges. Do urban planning. Design electronics. Write code. Paint pictures. Anything a human can do, this AI can do better. Everyone in the knowledge based industry is out of a job because we can't compete. Much like the robots in the auto factories, it doesn't need sleep, doesn't take vacations, can work 24/7, doesn't get tired, doesn't fight with co workers, doesn't ask for raises, doesn't get sick, etc. It can run a whole corporation all by itself. I know this is crazy, but just play along with this thought experiment. So, the end result is that all work done by humans is obsolete and inferior. What is there left for human beings to do? You can't get a job because a machine does it better, you don't have any money, and if you wanted to "purchase" a product, it could be on your doorstep in an hour at next to no cost to you or anyone else.
Now, we're like, "What's the point of my life if I can't work? That kind of defines who we are! We've spent our entire lives preparing ourselves to work a career, and then working that career, retiring with a pension, farting around for a few years in retirement, and then dying. But now, all that's pointless, so am I now worthless?" It's kind of an identity crisis in a way, and we'd be forced to come to terms with the idea that maybe we aren't defined by the work and jobs we do, but by something else, and maybe there's more to life than what was once called work? Do we spend more time with friends and family? Do we take up hobbies and recreations? Do we travel the world? Do we create human crafts, such as writing books or painting pictures? Do we play video games and watch television? Without work and a high quality of life, what makes us who we are? Note that we'd all face this problem without an AI singularity if everyone in the world was a billionaire (without the negative economic effects of inflation).
It's interesting to think about what a post-work, post-capitalist world would look like. It probably won't happen within our lifetimes, but the negative downsides of technologically based improvements in efficiency and capitalist consequences are starting to show themselves and that does affect us.
