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.

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.