Fallacy of the Luddite Fallacy

The Luddite Fallacy

The Luddite Fallacy suggests that labour-saving technologies increase unemployment by reducing demand for labour. But is it a fallacy? Some economists think so.

In fact, it’s a central dogma amongst some economists because jobs are the primary mean by which money flows from corporations to the consumers and back. Jobless growth would destroy mass market economies.

Rather than automation replacing humans and removing jobs, the resulting productivity increase will cause prices to fall, which will then boost demand ergo creating brand new jobs. Where there is money and spending, jobs will follow. Or so the theory goes.

However, computers do almost everything better than humans. They are practically unbeatable at chess and checkers.

Computers sort and archive mail and email automatically. And next time you’re in the market, there is also the robot-assisted weddings.

Researchers also found that robots beat people at engaging people on Twitter. Are you sure that the person you’re chatting with on Facebook or Twitter is a real human? If it’s a telemarketer you’re talking with – you can bet it isn’t.

Most jobs are not safe from automation. You can sum up 80% of what most people do with 4 or 5 different specific tasks. If a task can be broken down into repeatable steps, it can probably be automated.

So what jobs are safe in this oncoming technological tsumami? Think blue ocean strategy. Blue Ocean Strategy is when new demand is created in an uncontested market space, or a “Blue Ocean”, rather than compete head-to-head with other suppliers in an existing industry (aka Red Ocean).

Some jobs and professions may be preserved by cultural norms, for example bartenders, food servers and daycare workers. Maybe.

Then there are engineers who can install, maintain, adjust, modify and program the machines of the robot revolution. If any profession could debunk the Luddite Fallacy, it’s this one. That is until robots can do it.


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