Flexible Law Wins

The transitions to farming and to industry were associated with huge sudden increases in growth rates. Growth had remained pretty steady before each transition, and then boom, within a quarter of a previous doubling time, doubling times fell by over a factor of 150. Going by the number of doublings in these previous modes, we are already overdue for another transition. So I suspect that within a century or so we will see another such “singularity.” And since the current doubling time is about fifteen years, we should roughly expect that within a space of about five years the world economy will transition to doubling every few weeks or less.

Previous transitions were uneven in the sense that some places gained advantages by being first with the new mode. While such transition-induced inequality seems to have fallen over time, large inequalities will probably also occur with a new future mode, as some places more quickly adapt and welcome it. So which places will gain most from the next transition?

One obvious possibility is that places where the new relevant tech originates will gain an advantage. But while important, this matters less than tech folks assume. More important is which places have key inputs required for the new mode, and a big demand for the outputs of the new mode. These input and demand factors should heavily favor the world’s then most well-balanced and prosperous economies.

However, a fourth factor may matter most: legal and regulatory flexibility. If it is to radically remake the economy within a space of five years, this new mode will quickly run afoul of a wide range of existing laws and regulations. Places that require many years of discourse between diverse stakeholders to begin even incremental legal and regulatory changes are just not going to be where this new mode first grows big. Much more promising are places where new industries and ventures can just do things, or lobby a small set of key decision makers to quickly get big changes, and commit to keeping such changes. Random empty declarations of policy changes that could easily be soon reversed, or not enforced, won’t do either.

Given all these relevant factors, it remains quite unclear which places will be the most congenial to the next big growth mode. Perhaps change will favor places where policy is decided at a more local level, as local policy is easier to change.  (This favors, for example, municipalizing medicine.)

But if you believe a big change is coming, and hope for your place to gain first-mover advantages from it, this flexibility question seems key. It is where feasible policy changes have the biggest chance of actually making a consistent difference.

By the way, the contract-law core of our legal system is actually remarkable general, general enough to allow a great range of law within the same framework, and large perhaps even sudden peaceful voluntary transitions within that framework. Most actual legal systems do not allow such a wide general use of contract, however, and it is not clear whether any will anytime soon.

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  • JGWeissman

    If the number of doublings between “singularities” is constant, and doubling times decrease by a factor of 150 at the singularities, the time between singularities should decrease by a factor of 150 each time. Would you predict that after this next singularity, another will follow in a few years, and then another in a few days, and then another in half an hour, and so on, so that we will have infinite of these singularities in a finite time?

  • Guy Srinivasan

    Extrapolating to the next singularity is probably approximately fine. Extrapolating to the next two is probably approximately probably approximately fine. Extrapolating to arbitrarily many using this model seems like it’s a poor idea.

  • Taxman

    Wonder if slower evolving yet large countries would attempt to lock out / tax / blockade / invade the flexible law countries.

  • DK

    we should roughly expect that within a space of about five years the world economy will transition to doubling every few weeks or less.

    LOL. Now, would you put some real money down on a prediction like that?

  • JG, If something has happened three times, I’m willing to guess it might happen a fourth, but not remotely willing to conclude it will happen an infinity of times.

    Taxman, did the non-humans try to lock out the humans, the foragers try to lock out the farmers, or the farmers try to lock out the industrialists?

    DK, I already have, but am open to more opportunities.

    • Robert Koslover

      I’m sorry, but when I saw “…since the current doubling time is about fifteen years, we should roughly expect that within a space of about five years the world economy will transition to doubling every few weeks or less” I thought it was some kind of typo/text cutting/pasting error. But then you responded to DK’s comment and didn’t mention or correct the apparent error. So… what am I missing here? You are not seriously suggesting that in a mere 5 years, the size of the world’s economy will be doubling “every few weeks or less” are you?? It’s one thing to speculate about the distant future. It is quite another to make such a near-term fantastical prediction. Did you really mean to say something like perhaps 500 or 5000 years?

    • Robert Koslover

      Wait a minute… I think I may understand now…. Did you mean to suggest that sometime in the distant future, there will exist a 5 year period, during which the doubling time will suddenly become as short as every few weeks? But this 5-year transition period itself is located in the far future? Even so, the language you used to communicate that seems odd. But that is the now only interpretation that makes sense to me…

    • DK

      More opportunities? A wager, perhaps? This seems to be a very straightforward prediction that can be formalized without much hassle. I am a bit younger than you are so chances are high that we both will be around in 5-7 years now. Say, a half of the taxable income in the year preceding the set date? My email is real – reply if interested.

    • Robert I said the time frame is “within a century or so” while the transition time scale is “about five years”.

      • DK

        Ah, that clears it up. Sorry for getting it all wrong. I would still be willing to bet against this prediction but, alas, neither of us is going to be around in a century or so.

    • JGWeissman

      I agree that we wouldn’t have infinite singularities, because as the doubling time gets smaller, some limitation that is not being reduced by this process would become more and more significant until neglecting it invalidates the model. But it is an interesting question to ask what sort of limitation is it, and how many doublings / how small of a doubling time will it allow?

      I think this next transition, if it is to allow a doubling time of weeks, would need to remove the economy’s dependence on the productivity of biological humans. If that happens, and the limitation is not a property of biological humans, what is it, and where does it stop?

  • Sounds like an opportunity for seasteads and/or charter cities. Let a thousand nations bloom.

  • GregS

    Damn, TGGP scooped me. I am hoping that seasteading will bring about functional institutions, and that perhaps existing nations will begin to copy them.
    One narrative states that this is what happened the last time a stagnant old population found a new frontier. Supposedly, the new frontier gave space for democracy to develop, and slowly democracy began to replace the monarchies in the old world.

    If seasteading or charter cities DO open up a new frontier, in which large groups of people are free to try new forms of social institutions, surely they’ll stumble upon something that’s worth copying.

    I watched Elinor Ostram’s Nobel lecture. She points out that old fashion irrigation systems run under functional social norm work far better than new high-tech irrigation systems run without any sort of functioning social norms. I’m not extrapolating entirely from this example, but I think that having functional institutions is more important than having super-advanced tech. If those institutions aren’t allowed to evolve freely, as they most certainly AREN’T in any nation today, we won’t see the new singularity.

  • Ray

    I didn’t think you meant an infinite number of doublings, but you did leave it open for a broad interpretation.

  • Perhaps you should consider seasteading ventures… New countries forming on artificial islands on international waters.. So they could have social/political/etc systems much different from those in existence in other parts of the world.. The SeaSteading Institute says 75 years should have us see at least one independent country the size of a city… This should allow a lot of flexibility in laws etc…

  • ShardPhoenix

    The fact that these accelerations in change have happened in the past suggest that they may happen again, but trying to extrapolate a trend from 3 very widely spaced datapoints seems rather dubious to me. Thus, I don’t think it’s meaningful to claim to that we are “overdue” for the next change or that it’s necessarily likely to happen soon.

  • cournot

    If the changes that are needed are dramatic but obvious though costly, I have an odd candidate. Of the existing major nation states, Japan might do well. Although it tends to be fairly rigid and stable in the short run it has a tendency to make sudden social jumps when it perceives a need for rapid institutional adjustment. E.g. late Tang China, Meiji Restoration, Post WWII. To some extent, its homogeneity doesn’t make for flexible local adjustments but enables it to promote unified national adjustments.

    The U.S. seems good where adjustments are local and diverse. It does more poorly when adjustment requires some sort of national contract.

  • Remember my point about favoring larger economies with large developed inputs and high demand for outputs. Unless seasteading has a truly remarkable level of success, it just won’t be in the running here.

    • Prakash


      SIngapore and Dubai will probably be best placed to take advantage of this under continuation of present trends.

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  • John

    There comes a point when keeping changes to laws becomes another form of inflexibility.

  • GregS

    Suppose most of social and economic life occurs in cyberspace, and the speed of computation doubles every few weeks. This could easily happen if we develop quantum computers.
    If we have strong encryption and high-fidelity virtual reality, we may be able to interact in cyberspace in any way we can imagine interacting today in the real world. And we may have enough privacy to create and join any social institution we please, and keep it completely hidden from existing governments.
    Other than that, I can’t think of any way the world economy could truly have a doubling-time measured in weeks.