Future of taxes

The advent of a post-scarcity material goods economy could revolutionize more than just material goods.

Taxes based on income, consumption (sales tax) and property would make little sense in a world where people have a minimal need to work and can build and recycle buildings and objects at will, perhaps including land.

Need for taxes does not evaporate
An alternative means of taxation would need to be established. The amount and type of public services demanded would be shifting too in this future environment, but it is likely that some degree of public services would be needed at least in the short term which would require tax revenues.

Basis for taxation is a fairly easily resolved problem, at least in terms of methodology although perhaps not implementation. The easiest tax solution would be to return to the poll tax, a fixed fee for each adult. Of course this might only be a stopgap measure until any possibility of multiple electronic copies and physical embodiments of people/intelligences became real.

World financial system
A big portion of the world financial system is also collateral-based. There are $14.0 trillion in outstanding mortgages in the U.S. (Sep 2007) perhaps lower by a half trillion per the subprime crisis, about the same as the annual $13.9 trillion GDP (2007), but less than the $25 trillion NYSE market capitalization (2006).

The market capitalization of listed companies is based on perceptions of their future prospects. Companies will have been in on the shift and indeed creating the shift to a post-scarcity material goods economy and are likely to have been adjusting along the way. The mortgage industry, 80% of whose value depends on houses and buildings as collateral (20% on land values) would have to change quite a bit.

Future strategies for the mortgage industry
Once the mortgage industry even starts to suspect a possible endgame of real estate structures being worthless since they can be generated at will, it should start bringing loan terms way in, no more long-dated 30 year mortgages but much shorter periods of 5 or 10 years with periodic re-evaluations and other reset stipulations.

The visionaries will short or get out of the mortgage business and mortgage stocks and bonds, but there does not seem to be a way out of 80-100% unrecoverable value slippage. During the period of anticipating the post-scarcity material goods economy, the value of houses and existing mortgages could decrease, requiring revaluations by mortgage companies and realistically some sort of government assistance or bailout. It would not make sense to hold borrowers nationwide responsible for loans whose values have dramatically declined. The housing futures market would grow in use as a tool for all parties, homeowners, borrowers, lenders and speculators, to manage their exposure.

Angel investors drive innovation

The Center for Venture Research at the University of New Hampshire reported that in 2007, angels invested almost as much as venture capitalists in startup companies, $26.0 billion vs. $29.4 billion. Focused on seed and startup stage financings, angels invested in far more firms, 57,120 vs. 3,813 for venture capitalists. Angel investment growth was flat in 2007 vs. 2006 while venture capital investment grew 11%. San Francisco Bay Area angel investors comprised 10% of total angel investment activity. As with venture capital, the top four categories of angel investment in order were software, healthcare, biotech and energy.

Angel investing was once a solitary activity driven by personal networks, the practice has been formalizing in the last several years and there are now over 150 angel investor groups in the U.S. and Canada. The groups typically meet monthly where 3-6 pre-screened companies present to members. Angel investors are not disengaged retirees, 80% continue to be actively involved in the business world. Cleantech and even social venture capital are starting to be interest areas for angel investors.

Angel investors are a critical component of the entrepreneurial ecosystem and should be encouraged and sponsored by communities trying to establish a more innovative environment. For startups, angels can be an important resource for funding, feedback, contacts and exposure. The contribution and impact of angel investors can be expected to grow.

Water, the new oil

The $300 billion worldwide water industry is thought of as a policy area and an energy area, but not as a technology area. Every industry is really now a technology industry. Now is still an early phase of the water industry and there appears to be a lot of low-hanging fruit room for improvement such as reducing the 25-33% leakage that can occur in transport canals and pipe systems. Before looking at technology, the current focal points of improvement are reclamation, hydrologic models and conservation incentives.

Desalination and other Technology
There has not been a lot of recent improvement in desalination technology, and it remains expensive, 25 times the cost of traditionally piped water in some markets. The main reason for it remaining expensive is the high energy cost as a key input, so it is seen as an energy problem not a water solution. Solar, wind and other energy solutions could improve this. Advances in membrane filtration for reverse osmosis and developing other desalination mechanisms such as synthetic bacteria could shift the economics.

Hydrologic Models and Reclamation
Hydrologic models are the main focus of current improvement to better manage surface and ground water and to reclaim rainwater. Surface and ground water can be stored conjunctively and transported between storage mechanisms using such tools as aquifer injection wells and recharge ponds. Rainwater can be reclaimed for direct use (irrigation for example) and for reservoir supply.

Pricing and Metering
Another low-hanging fruit solution would be the widespread metering of water consumption. Some anecdotal studies have shown consumption dropping by a third with the advent of metering and that water is price elastic, usage declines when price increases. Removing or reducing discounted water as a farm subsidy could drive conservation as true costs are experienced by users. Water markets could further encourage conservation-oriented agricultural use and make prices more transparent and accurate as water market participants are attracted. Tools like the Drought Monitor could help authorities shift water supply around a fungible national grid.

Advanced civilizations forgo simulation?

Nick Bostrom's Simulation Argument articulates three future possibilities: “either almost every civilization like ours goes extinct before reaching technological maturity; or almost every mature civilization lacks any interest in building Matrices; or almost all people with our kind of experiences live in Matrices. He suggests that there is a 20% chance based on what we know now that we are living in a matrix.

Considering these three possibilities, the second case looks most probable, that technologically-mature civilizations are not interested in running simulations. It could be quite possible both because of its own likelihood and the likelihood of there being little value to simulations with more primitive self-aware participants (ourselves).

Future irrelevance of simulations with self-aware participants
It is quite possible that technologically-advanced societies may be able to achieve their objectives more effectively by other means rather than by running simulations. These more efficient means could be pure math, higher levels of abstraction, greater intelligence and better tools.

The main reasons that a non-technologically advanced society like ours thinks running simulations would be useful are to gain a deeper understanding of ourselves and our behaviors, to explore alternative histories and for leisure and entertainment either as observers or participants.

It is quite possible in the future that societies and entities will understand themselves so well that simulation will not be necessary. For example, augmented reality overlays could display or predict another party's utility function and provide a 3d data visualization of their likely future behaviors.

Alternative histories (e.g.; Napoleon not defeated at Waterloo, no Yucatan impact asteroid 65 million years ago, Greenland ice sheet not melting in the 2000s) would not need to be run, they would just be known or predictable. They would be obvious to a super-intelligence in the same way that I know my shoe will come untied if I pull on the lace, I do not need to actually try it. This may also be true for clinical trials and all areas of biology and most scientific experiments. Simulations with self-aware participants could be useful to a future society, but only in a forward-looking sense for more complex situations than can be handled by whatever the CurrentTech is, and the self-aware participants would be contemporary to that era not historical (us).

There are other situations where the objective is not obtaining information, the ever-burgeoning entertainment field for example. Entertainment simulations with self-aware participants would certainly be in demand. However, the primitive level of current humans would render us uninteresting in interactions with future society. For time tourism back in history, again, there is no reason to have primitive self-aware agents such as ourselves, artificial intelligences or non-sentient simulations could more adequately realize the experience.

Finally, there is the possibility that new reasons for running simulations could emerge as society advances, and it would be for these as yet unknown reasons that a future society would run simulations, and yes, there is some non-zero possibility of this.

Conclusion
It could be quite likely that future society will have more advanced technology than simulation, and even in the cases when it is interesting for future society to run simulations with self-aware participants, these self-aware participants would likely be contemporary not primitive (us). There may be less than a 20% chance that we are living in a simulation.