Serious economists are starting to ask whether the Luddites were right all along.

On that note, the latest paper from Benzell, Kotlikoff, LaGarda, & Sachs will likely have a big impact on the policy discussion re robotics & automation.

They take a decidedly negative view on the economic implications of automation, arguing that – without a serious policy intervention – putting a large share of the population out of “good work” will drag on consumption over time and lead to prolonged economic declines. And they are already calling for "highly tailored skill- and generation-specific redistribution policies” to keep the robots at bay.

While I spend a lot of time worrying about the implications of a lasting shock to low- & medium-skilled labor (which is a very real concern), we desperately need thoughtful policy and regulation that will address the needs of workers initially left behind while encouraging the entrepreneurship and explosive productivity growth that can carry us forward as a society.

History has shown that entrepreneurship and innovation can dramatically raise overall living standards while creating new, more productive, and (over time) higher-wage jobs for otherwise displaced workers… but the lack of an entrepreneurial solution to the developed-world labor shock (from globalization) since the end of the Cold War suggests that new and better jobs will only come if the right incentives are present… and if those workers attain new skills that are relevant to the digital age.

I firmly believe that some countries will miss out on the benefits of the Robolution as populist movements hijack governments – through the ballet or by the bullet – and enact policies that discourage automation. The end result is that many economies will likely be left behind while others take a giant leap forward.

We need to think long and hard about these ideas from a policy perspective… while getting in on the investable opportunities today. The Age of Automation is just beginning and will be a MAJOR macro theme for the rest of our lifetimes. As we have already seen with internet-related businesses, expect booms & busts along the way.