Earlier quoted context omitted.
The argument you are making assumes two things that strike me as highly implausible: (1) That enough people would use their new free time to innovate instead of just watching TV or playing World of Warcraft or something like that. (2) That enough people would still choose to do the unpleasant but necessary tasks that provide the resources needed for everyone to eat, have housing, etc. Not to mention all the other stu…
Right now a fairly tight circle of people decide for others how to spend vast amounts of time. It's not even very efficient as many jobs carry bullshit hours requirements. So after increasing free time by a large amount, a very small number of people start choosing different areas to innovate in, it still ends up as a large growth area for innovation, or social interaction, or whatever humans value individually inste…
What would a world where we did the former but not the latter look like? It would be something like everyone having to be, at least in some measure, an entrepreneur--everyone would be their own small business, having to figure out what product or service to sell to others in order to make a living, and having to decide for themselves what use of their time would best serve that goal. That might well, in the long run (i.e., after all the upheaval caused by people who were used to having someone else define their business objectives, now having to do it themselves, has died down), be a big improvement over what we have now. But the key incentive of having to make a living is still there.