Question

From 1811 to 1816, a secret group of textile workers in England called Luddites destroyed textile equipment in factories because they believed the machinery ultimately would put them out of work. Yet, in the 50 years after the Luddite attacks (which often were put down by deadly force), both rates of employment in the textile industry and wage rates for textile workers increased as textile output went up. Economically speaking, why did things turn out this way as opposed to the way that Luddites believed would happen if textile companies expanded capital formation? Are there any applications to labor and technology today?

Answer 1

Introduction

In the recent years, technology has largely changed the way business is conducted across the globe. Production possibility for various firms and countries has increased many folds, and capital goods and machinery has made it possible for firms to achieve unimaginable production levels which they could only have thought off in the past.

In the present case study, the people who believe that labour force would be killed by technology were indeed incorrect in their approach. It is true that robotics is easing manufacturing across various sectors and same is true for the textile industry as well.

However, conventional jobs are being taken over by machinery but other jobs are being constantly created. These include the likes of marketing, social media campaigning, after sales service. retail outlet management etc. The creation of machinery indeed has had an impact on conventional jobs, however due to the fact that it has also created jobs for other sectors has led to what is called as employment expansion along with technological advancements.

Case Specifics: -

The reason why despite capital formation, jobs have grown in the textile industry as opposed to the viewpoints of Luddites is the fact that it has led to the formation of new jobs much more than it has eaten up jobs. Meaning that the overall job loss is supplemented by the creation of new jobs which came as a result of increased production levels.

The simple application to labour and technology today is diversification of one’s skill. People who stick on one skill often find themselves out of work as technology advances over a period of time. Technology and automation indeed reduce low skilled jobs however for those who chose to advance their skills, technology and labour force go hand in hand. The greater skills you can deploy, the greater your chances of retaining your job and attaining better pay levels.

Please feel free to ask your doubts in the comments section.

Introduction

In the recent years, technology has largely changed the way business is conducted across the globe. Production possibility for various firms and countries has increased many folds, and capital goods and machinery has made it possible for firms to achieve unimaginable production levels which they could only have thought off in the past.

In the present case study, the people who believe that labour force would be killed by technology were indeed incorrect in their approach. It is true that robotics is easing manufacturing across various sectors and same is true for the textile industry as well.

However, conventional jobs are being taken over by machinery but other jobs are being constantly created. These include the likes of marketing, social media campaigning, after sales service. retail outlet management etc. The creation of machinery indeed has had an impact on conventional jobs, however due to the fact that it has also created jobs for other sectors has led to what is called as employment expansion along with technological advancements.

Case Specifics: -

The reason why despite capital formation, jobs have grown in the textile industry as opposed to the viewpoints of Luddites is the fact that it has led to the formation of new jobs much more than it has eaten up jobs. Meaning that the overall job loss is supplemented by the creation of new jobs which came as a result of increased production levels.

The simple application to labour and technology today is diversification of one’s skill. People who stick on one skill often find themselves out of work as technology advances over a period of time. Technology and automation indeed reduce low skilled jobs however for those who chose to advance their skills, technology and labour force go hand in hand. The greater skills you can deploy, the greater your chances of retaining your job and attaining better pay levels.