Does Machinery Create Unemployment?

The relation of the introduction of machinery and unemployment is a very controversial question.

On the one hand, it displaces labour and, on the other, it increases employment opportunities.

Let us consider this matter carefully. When machines were first introduced in England, there were riots which resulted in senseless destruction of machinery.

Machinery has been regarded by labour as its natural and permanent foe. “In comes the machine and out goes the worker” has become a common saying. There is ample basis for this. One machine can certainly produce as much as a large number of workers put together. When, therefore, a machine is introduced some workers have to go.

The urge for the introduction of machinery is really to reduce the wages bill. Machinery has been called a labour-saving device. There is, therefore, not the least doubt that machinery creates some unemployment. Those who are displaced, especially the old hands, may never get a job, and those who are lucky enough to get one may not be able to earn as much as before. To what extent man is displaced and, for how long, depends on the adaptability and mobility of the workers and the ability of entrepreneurs to adjust to the new situation.

But we should distinguish here’ between the immediate effect and the ultimate effect. Immediately, labour is displaced no doubt, but it has been amply demonstrated that ultimately machinery creates much more employment. Highly industrialized countries today could never dream of being able to support their present population in the pre-machine era.

Machinery creates more employment in the long run in his way Machine- made goods are cheaper; hence, demand for them increases and the large, volume of production will re-absorb some people; or demand for some new goods will be created and men will be required to make them. If men do not buy more goods, they will save money; capital will thus accumulate and more industries will be started.

Men will also be needed for making machines, for repairing them and for doing so many other allied jobs. Several new and allied industries are started. The number of new openings created by machinery really passes one’s imagination.

Many millions more workers are employed today than got employment in the pre-machine era. We may thus conclude that immediate effect of the introduction of machinery is to displace labour, but the ultimate effect is to create much larger volume of employment.