The illogical fear of automation, falling wages, and falling prices

Abstract

There is a hoary tradition in economics to the effect that automation will to unemployment. Ned Ludd might have started this, but in the modern era there are numerous supporters of this fallacy (Frank, 2012; Karphal, 2017; Ford, 2016). The present paper is an attempt to allay the fears of many that breakthroughs in technology will promote joblessness. Our method is to consider both historical and modern-day examples of innovation that have led to this fear. Ned Ludd dreaded the knitting loom. At present, self-driving automobiles, taxis, trucks, have driven to despair people who, realizing that jobs in these industries will be lost, over-generalize and think that all employment will cease. Our overall message is that we need not fear robots or automation or innovation. Rather, they will enhance our economic wealth.