What is Technological Unemployment? What is Luddite Fallacy?
What is Technological Unemployment

Artificial Intelligence, robotics, 3D printing, machine learning…-a wave of technological change is engulfing all of us. Several institutions who keenly watch and analyze these changes warn that the pace of technological change is difficult for us to upgrade our skills.

Most of these technical changes are disrupting existing markets, firms, products etc. Inventions like driverless car and speech recognizing robots are about to replace human labour quickly.

In effect, the rate of labour displacement may accelerate; there by raising the level of unemployment.  This new trend has renewed the attention to an old concept called technological unemployment.

Technological unemployment refers to the loss of jobs caused by technical change.  According to the World Bank, automation threatens 69 per cent of the jobs in India, while 77 per cent in China.

But economists generally disagree with this type of predictions. They say that job may be lost for the time being. But new jobs will appear in other areas. This is what history says to us as well. The industrialized economies have less unemployment though they have undertaken tremendous automation in the past.

Sophisticated countries will find and generate the new type of jobs amidst automation and technological change. After a time, people can get employment in new fields with renewed skills.

What is Luddite Fallacy?

The fear that technological unemployment may happen in the context of technical change is explained by ‘Luddite Fallacy’.

Luddites were a group of English textile workers lived during first industrial revolution period. They feared that machines will destroy their jobs and livelihoods and hence destroyed machines.

The new machines were more productive, and some workers lost their relatively highly paid jobs. Still employment significant volume of were created in associated sectors gradually.

 In the medium term, Britain has not undergone the unemployment that many feared. The notion of the Luddites about the fear of unemployment in the context of technological change is described as Luddite Fallacy.

The underlying argument behind the Fallacy is the argument of economists that new technology will not increase the long-term unemployment rate (though there may be temporary unemployment).


Share Now