Story

I always Imagined that as automation goes up, the wealth gap also goes up. As those with capitol spend it in such a way that it does not benefit laborers.

Go back several hundred years, and you don't see a nice even distribution of wealth, despite the lack of automation. Instead, the wealth gap is caused by laws (like taxes) that are too-favorable for the wealthy, disadvantaging the middle-class... Property, stocks, and other assets appreciate faster than wages, while being subject to much-lower tax rates. As long as that holds, the wealth gap can only continue increasing, and it will do so regardless of the progress of automation.

It's automation that has made goods so incredibly affordable, today, that people can afford huge volumes of stuff. Go back before the industrial revolution, and you'll see homes that are nearly barren of commercially-produced goods... Remember when people had 90-hour work-weeks, and still couldn't afford to pay rent and food? Compare to today's 40-hour work-weeks, with everyone spending less than 15% of their income on all the food they can eat. When was the last famine in the western world?

But historically there was a dynamic between labor and capital that lead to the betterment of all.

That dynamic only existed for a very brief period, and it wasn't ever the case that paying for more, less-productive labor, benefited anyone. Instead, it was the growing efficiency of labor (assisted by automation) that made it possible for those jobs to become high-paying. And the US was on top because automation allowed high-paid union workers to make products that were exported to 3rd world countries, cheaper than being built locally by poorly-paid 3rd world laborers without the automation.

Rich Guy A buys ipad from Rich Guy B. Ipad completely automated, zero humans involved in the design or manufacturer of said Ipad. Rich Guy B just owns the robots that did everything.

1) This ipad can be manufacturered for $1 more than the cost of materials. If Rich Guy A tries to sell it for more than that, Rich Guy C will be able to start making ipads cheaper and will sell them to Rich Guy B.

2) As long as there are ANY jobs left for humans, even modest wages will allow those workers to afford a large amount of said ipads, thanks to automation driving the prices towards zero. And the cost of materials will continue to fall as well, as the automation allows for cheaper solar power, and more efficient mineral extraction and more.