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.

Capital markets evolution

A confluence of factors is impacting capital markets: first, the repeated failure of traditional financial markets (“Fed puts lipstick on Bear Stearns’ pig”) to provide capital and accurately-represented non-fraudulent investment products and their subsequent bail-out by taxpayers, second, the great shift in cultural attitude towards sustainable and socially responsible capital use (“Global 100 Most Sustainable Corporations” and “Beyond the Green Corporation”) and third, the inexorable expansion of technological capability and the entrepreneurial ideas that exploit it.

Business Model Spectrum
The expansion of technological capability is allowing business models to evolve and expand and is the topic of long-tail meme-founder Chris Anderson’s new book, Free. Digital business costs such as bandwidth and storage have become so inexpensive that it is essentially free to provide an increasing number of web-based services. Some of the new business models include:

1. Alternative monetization - competitive pressures suggest offering services for free and monetizing other aspects such as attention (traffic) and reputation (links).
2. Freemium - a combination of free plus premium services. It may be in the open source software model (free software, fee-based up-sell for implementation, customization and support services) or the flickr model where the small group of paying customers (1%) subsidizes the free offering for the others (99%).
3. Indirect model – a wider application of third-party supported offerings (formerly TV and radio, now search engines, website content and sponsor and gambling-supported free Ryanair flights).

Consumer Financial Services 2.0
Context, culture and appropriateness are important properties of social networks. FaceBook, MySpace, LinkedIn, Pownce, Jaiku and Twitter are not the place to talk about money but financial social networks are.

It is quite possible in the future that social networks will be the accompanying community feature to any website or topic area.

Finance 2.0 websites offer financial services and a venue to create and interact with the user community around them. For example, Wesabe, Expensr, Mint and Geezeo provide expense aggregation and management. NetworthIQ, Boulevard R, and Zecco provide investment and financial planning services. Several of these Financial Services 2.0 companies are being featured at conferences such as O'Reilly Media's Money:Tech, BarCampBanks and Finovate. As with many technologies, age-tiering is apparent as under 30s enjoy the benefits of aggregated financial services while those over 30 await a higher level of security. Yodlee and BITS are working to establish industry standards for financial information access via tokens and credentials, similar mechanisms will be needed for digital health information.

Post-scarcity economy

The long-term future economy is a post-scarcity economy (PSE), where substantially all human material needs are easily met at low cost or for free. The term post-scarcity economy is a bit of a misnomer since only the scarcity of material goods is likely to recede. The economy itself and scarcity as an economic dynamic will probably persist, for example, scarcity of time, energy, processing power and creative ideas.

The future economy will likely be realized in phases. Some material goods would be replaced or provided at near-zero cost at the outset, perhaps certain classes of items or goods like fuel, then more items such as food, then substantially all material goods. Fancier items like high-end designed objects and medical treatments would probably not be available in the earlier phases.

What will happen to services as material goods are increasingly provided at minimal cost? Initially services would be unchanged, but over time, nearly all current services could be replaced by technology-advanced near-zero cost alternatives. As Josh Hall suggests in Nanofuture, nanobots could provide daily hair-trimming and nano-foglets could create new hairstyles on demand. Robots are already available for lawn-mowing upkeep (Robomow). Telemedicine could be used for medical diagnostics and treatments. Artificial Intelligences (AIs) may be consulted for tax and stock advice.

Over time, public services such as police and fire protection could be provided by trusted AI networks and other mechanisms. Wireless sensor networks and cams may shift the nature of crime and policing activity. Future building materials may be impervious to fire and possibly self-reconstruct following earthquakes or other damage.

New virtual and other non-traditional services requiring intelligent attention from AIs or human minds, particularly in providing entertainment, learning and means of interesting and productive engagement, will probably be a growth area. The future economy will likely be transacted with multiple currencies, a variety of monetary currencies and additional supplementary currencies such as time, attention, intention, reputation and ideas.

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L'art et la science

One third of the attendees at this weekend’s SciBarCamp in Toronto were visual artists and musicians. The aim of the event was to not only be the first Science BarCamp but also to bring together artists, scientists and technologists.

Impetus for Collaboration
Some assumptions about art and science seemed to underlie the conference sessions. The main assumption was that artists and scientists should collaborate, not just inform and inspire each others work, but collaborate. There was also the assumption that artists are interested in science and technology and in being involved as science and technology become more pervasive in society. Another assumption was that art-science collaboration is somehow quite obvious, necessary and desirable in ways that art-politics, art-economics, art-markets, art-education, art-sports, etc. are not.

Why would collaboration between art and science be obvious and natural? Abstractly, there seems to be some overlap in the goals of art and science regarding the need to create, explore, probe, understand, explain and inspire. Both also have a degree of inherent universality, a need to communicate and a use of concept and metaphor.

Concretely, there are other reasons why a collaboration of art and science would be natural:

• To provide useful information display of scientific results, even if only to scientific audiences, particularly given the very large and very small scales at which contemporary science is conducted

• To respond to the hastening pace of science and technology change making the role of artists as interpreters, translators, experiencers and arbiters more imperative. Artists have a key role in the discussion of science and technology’s impact on life and culture

• To facilitate the increasingly audio-visual multimedia world of today with streaming video, 3d web and virtual worlds all seeking innovative data display tools and metaphors

Towards meaningful collaboration…

ArtBarCamp
Would an art BarCamp work? ArtBarCamp could be a standalone event or co-located at BarCamps or SciBarCamps. ArtBarCamp could have an emphasis on doing art in workshop formats, experiencing different kinds of art and talking about art. TED and SciBarCamp include artists and the audience has an opportunity to experience art, it would be wonderful to create art as well.

Amores circuitos

The potential replacement or supplementing of humans by advanced robots or androids for love and sex is not shocking, it is preferable. It could be more satisfying for everyone, sexually and emotionally. Just as the simultaneous relationships of polyamory require a more mature level of self-knowledge and interpersonal communication, so too could synthetic partners take human skill sets to a whole new level. What would it be like to have a relationship with an AI that knows you better than you know yourself?

Sex with robots is far more efficient, it avoids the whole search problem and many other problems. Randomness, variability, and exploration are lauded, applauded and possible, not shunned and shamed. Not to mention far more acceptable than being gay or non-mainstream sexually in any way in current society.

Adios taboos. How could sex with robots be avoidable in a society demanding ever higher levels of self-expression and fulfillment?

There are too many other dynamics in interhuman relationships for ongoing sexual fulfillment, a quick glance at craigslist will easily confirm this. Sex could become like going to the bathroom, something most people prefer to do alone without other humans around. It is very personal.

Future of market mechanisms

Information is increasingly free. This is causing well-established economic paradigms to reshape, expand and be supplemented to reflect this shift. One example of a new market norm is the open-source software model of free software and fee-based services to implement and maintain the software.

Free access to information pushes the bottleneck higher up the scale to a less entropic, higher resolution value point. What is now valuable is how information is used, and the creation of new information.

Value Creation
An increasing level of productive activity is coming from the many activities people do that have value but are unrelated to their compensated activities. This productive activity is starting to impact and deliver value to others in unprecedented ways. It has not been measured and is outside of the traditional economy. How can these activities be explicitly valued and exchanged via monetary or non-monetary currencies?

Complementary Market Mechanisms
Non-monetary currencies for attributing value initially started with reputation. Now they are becoming more rigorous in their assessment of value and are being used for exchange. Some of the new market mechanisms include attention economies, open money (related event: unMoney Convergence), time banks, social capital markets (related event: Social Capital Markets), open capital and prediction markets.

Transition to a post-scarcity economy (PSE)
A rich pathway to the future involves creating a multi-currency culture to support the different areas in which value is and will be created: finance, ideas, time, information, action, etc. Financial or non-monetary derivatives could be created on top of the new currencies. Imagine a call spread on community cleanup time!

Having multiple currencies would not only reflect the current and near-future state of the world more accurately but would also be good defensive positioning for future volatility and uncertainty regarding technological development and adoption.

Evolving to a multi-currency culture could ease any potential future transition to a post-scarcity economy (PSE) as traditional money will be only one recognized store of value.

Upload world science fiction

It is strange that there has not been more in-depth exploration in science fiction about what mind upload societies would be like. A few aspects are examined in books like Accelerando, the Golden Age, Permutation City, Diaspora and the Cassini Division. Many issues could play out in fun ways in science fiction.

Trust in an upload world
In a world where everyone has uploaded their minds into computer banks and experience is simulated in virtual reality, what is real? How will checks and balances be established for trust and security? How do you know you are not being hacked? How do you know you are getting the bandwidth and processing power promised by your service provider? If you instantiated into an embodied form to go off-bank to check, how would you know that this has really occurred and is not a simulation of an embodied download by the service provider?

A science fiction story could revolve around escaping the upload service provider, finding its deviance (it has shockingly slaved entire banks of human minds to its own nefarious purposes) and overthrowing it to restore order only to find an even more evil system, like a spam-protection unit gone awry with emerging AI, now has the upload society in its clutches. The discrimination practices of the future could be delivering slower run-time environments to certain groups. The thematic issues to examine are the integrity, influence and control of an upload society.

Motivation and activity
What is the nature of being in an upload world? Is the construct of the individual still relevant? What are the driving motivations? What are the activities? What do minds do with 24 hours of run-time each day? If individuals can make copies of themselves, what are the legal and practical issues? How can constructive behavior be incentivized instead of regulated? An interesting story could ensue as an extension to the Kiln People concept, where a copy of a person mutates and wants to kill the original to assume its legal status. An interesting branch of future law may deal with copies interaction.

Societal dynamics
It could be interesting to look at how society redesigns and reorganizes itself in an upload world. Different subgroups may edit their utility functions in different ways. What are the reproduction norms? Do types of gender proliferate? Which memeplexes would arise and predominate? In the Post-Scarcity Economy, what will be organizing factors for society?

Information evolution
How do the Internet and the individual and the group evolve? In one interpretation, they are all just collections of information. Does distinction become meaningless at some point? Are there other distinctions that would be more relevant in an upload world? What establishes who owns, controls and has permission to view and create different information, whether people bits or data bits?