December 3, 2014

Rage Against the Machine

When was the last time you heard someone exclaim, “Machines are the basis for unemployment”?  Throughout the history of man, when unemployment looms over society, machinery takes the heat for being the root cause.  This fallacy is the reason for labor unions, but why does this continue to get traction in today’s society?  If we believe this to be true, as Hazlitt stated, “Primitive man must have started causing it with the first efforts he made to save himself from needless toil and sweat.”  Well, it is time to set the record straight that automation is a blessing and most surely not a curse; it never has been and it never will be.
            Machinery can turn one man into a production god, for lack of a better term.  One man working a pen making machine, can now perhaps churn out 10,000 pens a day.  Before, he could merely make 3 a day when he had to bend and melt the plastic with his own handy work.  This, according to the labor unions, has put hundreds of pen makers out of work.  However, a pen no longer costs four dollars per pen.  Now it costs four dollars for one hundred pens.  That’s quite the economic boon to the general pen consumer base.  Because this general populace can save such a considerable amount of money on their pens, they will begin buying and investing their money elsewhere, thereby maintaining overall economic strength on the aggregate.  When people save money in one area, they spend it in another.  One only needs to understand the simple parable of the broken window by Frederic Bastiat to understand the seen and unseen forces of economics.  Furthermore, every laborer desires to better their economic expenditures, be that the money spent to hire labor, or to ease or quicken the pace of work for the average laborer.  Through machinery mankind continues to diversify their economies and improve the capability of work by each economic being.
            Perhaps now we should look at the entrepreneur instead of the average layman or consumer.  People will be quick to quip that machinery only makes the rich richer or that the entrepreneur can now take advantage of their employees in a greater manner.  However, because of the automation, the manufacturer can invest more in his business, employ the machine maker more, diversify his manufacturing, or any other mean of consumption.  Firms do not desire to profit more, so they can merely sit on their funds.  Firms expand profit to spend that profit to further expand their business.  Money in the private sector is made, so that it can be spent in the pursuit of luxury or making more money.  Machinery helps drive mankind towards a stronger economy when employed at all levels from the consumer to the producer.

            If we devote our rational processes to deriving the benefits of machinery, we can easily understand why and how machines have improved the quality of life in modern societies.  As economic thinkers, we cannot let the rumors driven by confusion reign over rational thought.  Machinery is not a curse and only serves to bless humanity, for without it growth would have stagnated centuries ago.

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