Will efficiency ever push the social contract to a breaking point?

Question

Most of us are aware of the basic theory, which states that as automation becomes more efficient, few workers are needed to produce more goods.
However, as automation continues to increase exponentially and as computers become able to reproduce intellectual work once thought to be the sole domain of human intelligence, it would seem we face the possibility of an economy where the vast majority of humans are no longer required to keep the economy functionning.
But this leads to an obvious paradox as most people still earn access to economic goods through their capacity to provide labour.
So Is there a breaking point where automation makes the social contract of work versus goods unworkable? And if so, what can replace it?

Answer 1

From Ted Kaczynski's Unabomber Manifesto, quoted in Bill Joy's essay, "Why the future doesn't need us" (Wired, April 2000):

"Due to improved techniques the elite will have greater control over the masses; and because human work will no longer be necessary the masses will be superfluous, a useless burden on the system. If the elite is ruthless they may simply decide to exterminate the mass of humanity. If they are humane they may use propaganda or other psychological or biological techniques to reduce the birth rate until the mass of humanity becomes extinct, leaving the world to the elite. Or, if the elite consists of soft-hearted liberals, they may decide to play the role of good shepherds to the rest of the human race. They will see to it that everyone's physical needs are satisfied, that all children are raised under psychologically hygienic conditions, that everyone has a wholesome hobby to keep him busy, and that anyone who may become dissatisfied undergoes "treatment" to cure his "problem." Of course, life will be so purposeless that people will have to be biologically or psychologically engineered either to remove their need for the power process or make them "sublimate" their drive for power into some harmless hobby. These engineered human beings may be happy in such a society, but they will most certainly not be free. They will have been reduced to the status of domestic animals."

I highly recommend reading Joy's essay. Bill Joy was the cofounder and Chief Scientist of Sun Microsystems who wrote his article after coming to the troubling conclusion that Kaczynski's adystopian scenario is a true possibility if we're not careful.