Luddite fallacy

Name of fallacy Luddite fallacy
Type Inductive Argument, Informal Argument
Description The belief that labour-saving technologies increase unemployment by reducing demand for labour
Treatment The "fallacy" of the Luddites lay in their assumption that employers would keep production constant by employing a smaller albeit more productive workforce instead of allowing production to grow while keeping workforce size constant. Economist Alex Tabarrok summarises the neoclassical presentation of the fallacy as such: If the Luddite fallacy were true we would all be out of work because productivity has been increasing for two centuries. However, the Luddite fallacy is fallacious only at the macroeconomic level: overall employment in the economy will not decrease, but individual workers who do not possess the skills to utilize new technologies may become unemployed.