The Dual Chains of Automation and Finance: A Moral Economy Perspective

This paper develops a dual-chain feedback model linking automation and financialization as the twin mechanisms of welfare erosion in contemporary capitalism. Automation substitutes labour and compresses fiscal capacity by weakening wage-based revenues, while financialization transforms these surpluses into speculative accumulation detached from production. They generate growth without distribution, a moral inversion in which efficiency undermines justice. Drawing on the moral economy traditions of Smith, Mill, Polanyi, and Sen, the paper interprets welfare as a constitutive system of social provisioning under conditions of technological and financial change. It advances three normative correctives, the automation tax, the universal basic share, and the financial–automation levy, explicitly designed to intervene in the feedback mechanisms identified by the model and to re-embed efficiency within ethical purpose. Using indicative cross-national evidence from the ILO, OECD, IMF, and BIS, the analysis shows how productivity gains coexist with fiscal fragility and predistributive inequality, concluding that moral reconstruction, not technical optimization, is the essential condition for sustainable welfare.