Well, let's look at the macro model of agriculture. Do you need to work from 6am to 7pm, doing difficult manual labor, in order to feed yourself? No. Automation replaced farming, so now you can do much simpler and easier work, and still get enough food.
Transition from the Argriculture -> Industry -> Services was discussed a lot of times above, as well as assumption that there is no 4th sector after "Services".
That's your falacy right there. There's no transaition from one to the other. Otherwise we wouldn't still have agriculture and industry. We still have those things, but the jobs just changed. Aggriculture is now more about biological engineering, and industry is more about supply chains and making more efficient automation. We still have just as many people working, but now our farmers are working in bio and genetics labs, trying to improve plant growth and fertilizers, and our industry workers are figuring out how to source and transport materials in a more efficient way, ahd now to design robots that will assemble things in the quickest way possible while using the least amount of resources.
I am wondering why some people still believe automation will make anything "cheap as dirt"!
Because that is the very purpose of automation: make as much as possible, as quickly as possible, for as little as possible. Capitalism is all about efficiency (less waste = more profits), and by extension so is all the automation that capitalism has been pushing.
This will never happen because your fundamentalist faith in the free markets is just a pure theory having nothing with the real world
It's not faith, it's how things are actually working in the real world, right now. It's as much of a theory as any other science theory, like the theory of gravity. Automation, efficiency, things getting cheaper, and everything else. Just because you don't see it doesn't mean it doesn't exist.