content: CGod this fallacy again? One especially robust fallacy is the belief that machines on net balance create unemployment. Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever. This time, the government is not the sole coercive agent. The Luddite rebellion in early 19th-century England is the prime example. Labor unions have succeeded in restricting automation and other labor-saving improvements in many cases. The half-truth of the fallacy is evident here. Jobs are destroyed for particular groups and in the short term. Overall, the wealth created by using the labor-saving devices and practices generates far more jobs than are lost directly. Arkwright invented his cotton-spinning machinery in 1760. The use of it was opposed on the ground that it threatened the livelihood of the workers, and the opposition had to be put down by force. 27 years later, there were over 40 times as many people working in the industry. What happens when jobs are destroyed by a new machine? The employer will use his savings in one or more of three ways: (1) to expand his operations by buying more machines; (2) to invest the extra profits in some other industry; or (3) spend the extra profits on his own consumption. The direct effect of this spending will be to create as many jobs as were destroyed. The overall net effect to the economy is to create wealth and even more jobs. We must remember that the short-term local effect is to destroy jobs. In some cases where this effect is major, special relief measures through charities and non-profits might be taken, but blocking the progress leads to stagnation and poverty.