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Apart from minimum wages, another hotly debated economic issue is that of mechanization.
Mechanization has been demonized by many critics stating that it is the enemy of employment. Critics’ state that mechanization, benefits the capitalist class and that it aids in spreading inequality. It is true that the productivity of the economy goes up. However, how that productivity is distributed amongst the classes is at the heart of the mechanization debate. The fallacy behind this debate has been exposed by several economists. We will have a closer look at the mechanization fallacy in this article.
The viewpoint that mechanization and unemployment have an adversarial relationship is a particularly dangerous one. The reason behind the danger being that, if this fallacy is believed to be true then an innovation like mechanization will be viewed as an anti-social activity. This will lead to catastrophic implications. Let’s discuss a few of them
Implications of this Fallacy:
There are jobs for analysts, for managers, in research and development departments and so on. These jobs focus more on the mental faculty of the workers rather than the physical labor that they can produce. This is possible because the bulk of the menial physical tasks that need to be carried out in production is performed by machines.
If mechanization were taken out of the picture, most producers would have to spend the majority of their workforce on performing menial tasks.
Workers would be stuck in dead end jobs where only their physical labor is required instead of being given the chance to evolve into more thinking beings through the opportunity of using their analytical and cognitive mental faculties.
It would therefore not be farfetched to state that the removal of mechanization or any anti-mechanization movement would lead to a state which is less beneficial for the capitalists, the laborers, the consumers and therefore to the society as a whole.
Also, let’s look at the some of the positive points that result from mechanization:
Mechanization produces mass savings. When Henry Ford laid out his assembly line, cars could be produced for 10% or less from they used to cost earlier. The people therefore experienced massive savings as a result of mechanization.
Some might say that these savings accrued only to the rich class. However, that is not true! Cars became so cheap that pretty much every body could buy them. The lower class people that purchased these cars also experiences savings in terms of the time they spend. Both the time and money saved as a result of mechanization can be put to better use in the economy and therefore everyone benefits.
The second question that we need to consider is whether mechanization actually even leads to unemployment. True that is you consider a very narrow picture it may appear that this is indeed the case.
For instance, if machines are installed in a given factory, it is true that fewer workers will be required and layoffs may soon follow. However, when you consider the economy as a whole the picture changes. Mechanization will lead to savings both to the consumer and to the capitalist.
The consumers can spend these savings on more products and the capitalists will produce more of these products. When more production gets underway, the displaced workers will gradually find employment. Hence, over a period of time and from a larger point of view there is no unemployment.
Workers have simply been moved to different jobs within the economy and everyone is better off as result of the same!
The question therefore arises as to whether, we would rather prefer to have more people employed in a sub-optimal manner or whether we can think more long term and from a bigger point of view and see that mechanization does not cause any unemployment. Rather it causes transfer of employment.
The modern developed world that we live in is built on the fundamental of mechanization. Saying no to mechanization would therefore mean saying no to development.
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