We tend to think of the future as a place full of new technology, but to many, only physical and software devices count as “technology.” However, economic growth results from innovation not only in physical and software devices, but also in social practices and institutions. Scholars in economics, finance, business, and law have long identified many simple changes to business and social practices that seem to improve efficiency, but that are rarely adopted, and that tend to generate little interest when explained to potential adoptees. For example, economists tend to consistently recommend charging non-zero prices for scarce resources like parking and road use, and recommend weakening import tariff s, immigration restrictions, rent control, mortgage subsidies, taxes on products where both supply and demand are elastic, and penalties for victimless crimes such as drug use or prostitution. While clever scholars can often invent auxiliary hypotheses to explain why these polices are useful, contrary to appearance, it is far from obvious that such hypotheses are the real reasons for disinterest in these policies. We have six reasons to expect ems to adopt such improvements more often than they are adopted today. First, the much larger em economy has more resources to explore and develop the many complementary adaptations usually required to make general good ideas effective in particular contexts. Second, a more competitive economy should less often reject cost-saving changes merely because they seem strange or repugnant. When efficiency gives a competitive advantage, more competition should lead to more efficiency. Third, as ems can more easily obtain trustworthy strategic advice on personal choices from their clan, their behavior should more closely approximate the rational agent models on which scholarly advice tends to be based. Fourth, as em clans will know their members very well, such clans can provide high levels of insurance to members while suffering much less from the usual disadvantages of insurance, such as insurance reducing incentives to be careful, and people with hidden higher risks buying more insurance. While today risk-aversion is often a barrier to institutional efficiency, riskaversion is much less of a barrier for ems.
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