For that to be true, then you have to imagine rich people sitting around on hoards of gold and gems or stuffing cash into mattresses. For a start, the largest

For that to be true, then you have to imagine rich people sitting around on hoards of gold and gems or stuffing cash into mattresses. For a start, the largest groups of investors are pension funds storing aggregate savings of normal workers. For a second, even when companies like Apple hoard cash, it's not just sitting in a Cupertino vault. It is in a bank account, and that bank is then lending the money out for other uses. Your example also assumes that businesses automatically get to keep surplus earnings through cost savings. This may. Be true in some cases but overall will be dictated by the elasticity of the market they are in. Most markets face significant competition, and so most of the benefits of automation flow through to the customers, who then either get a better product for the same price, or the same product for less. This leaves them with more cash to spend on other things, which, coupled with innovation and newly freed resources, as well as surplus capital, creates entirely new businesses and jobs. This cycle has repeated many times over many centuries and is likely to continue unless capital formation, entrepreneurship and market freedom are messed with. Every generation has a quota of Luddites who think that this time things will really turn out for the worse, but he evidence doesn't support that theory.