Have you ever heard it said that automation displaces employment and sprinkles misery upon the masses in society? Such sentiment has been echoed over the years; it was echoed by the Luddites during the 19th Century in Great Britain, and it continues to be echoed in today’s times.

For example, here is a clip of the hosts of Fox News’ show The Five discussing automation and the potential ramifications they believe it may have on American labor:

Many brief points were thrown about by the hosts. Eric Bolling made a brief note about taxing robots that replaced American labor. All in all, the panel seemed somewhat concerned over the rising tide of technology and automation in the workplace.

Underlying the thinking behind those who make these sorts of claims is the exact same sort of fallacious thinking underlying many other arguments – protectionism, minimum wages, union featherbedding, and “public works” projects, to name a few. It is argued that tariffs protect domestic industries and thus benefit society through their enrichment; that minimum wages generate more income for individual workers and thus enrich society as a whole; that featherbedding creates additional employment, thus creating more purchasing power to boost employment in other industries, and so on.

If a 20% tariff is beneficial, then logically, a 40% or 80% tariff must be beneficial as well. Why stop at merely restricting imports? Full autarky would surely boost employment and the economy as a whole. If a $15.00 per hour minimum wage is beneficial, why not raise it to $30.00 per hour? If spending 20% of the federal budget on infrastructure spending to boost employment is economically beneficial, it would be even better to spend 85% of the federal budget for the same purpose. Many who advocate for these kinds of policies would scoff at these suggestions. This is to be expected; absurd beliefs tend to lead to absurd results.

This same style of thinking underlies the arguments made by those who curse automation and technology. They curse machinery for destroying jobs and impoverishing the worker. They carry on about protecting the worker from excessive automation; the economists with PhDs rattle on about “full employment”. From this point of view, boosting employment is fairly simple. We should pass a law mandating the destruction of automobiles; we should do away with the central air in our houses, our electricity, our television sets, our airplanes, our refrigerators, our microwaves, and our cellphones. Surely, that would boost employment! Think of all of the industries that could be brought into existence without automobiles or airplanes. We should destroy machines that allow for the production of cheap goods and services that increase our standard of living and enable us to save labor for other purposes. Indeed, thinking like this can be summarized as a theory of scarcity, in which civil society as a whole is enriched when there are less goods and services being produced.

Machinery, Labor, and Wealth

You have heard it said that machinery destroys employment and impoverishes the masses. I am thoroughly convinced that, in reality, the exact opposite occurs. It would require a whole chapter within a textbook to cover this topic thoroughly. To state briefly, machinery improves our standard of living. Let us observe the effects of automation from the standpoint of the consumer. The savings raked in by a factory owner who implements automation in the workplace must necessarily be passed on to the consumer in the form of lower prices for his products as a result of increased supply and market competition. The consumer, who now has a higher disposable income than before, will either choose to spend it on either some good or service he or she was unable to afford before, purchase more of the same product, or will choose to save it. Either of these actions will serve to increase employment. Society as a whole will be richer as a result; there will be more goods and services to go around and labor will be employed to its most productive use, necessitating a higher standard of living all around. All around, employment is merely reshuffled in the labor market.

It is true that technological advances bring rise to new industries and thus generate new employment. But it is equally true that industries and jobs are destroyed in the process. Older firms must necessarily shrink in order to release resources for others to grow. This is the “creative destructive” of the marketplace. As a whole, labor is merely redirected into its most productive use. This is a keen difference between the old industries and the new industries.

In a market economy, employment does not exist for employment’s sake; employment exists because it is a means to an end. A fry cook is not employed for the sake of merely providing him with a paycheck; he is employed because he provides a service desired by his fellow man. For as long as resources are scarce, there will always be unfulfilled wants and desires within all of us as individuals, and thus, there will always be a need for employment.