The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism by Jeremy Rifkin Page B
Authors: Jeremy Rifkin
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still soft and largely anecdotal, the Collaborative Commons is ascendant and, by 2050, it will likely settle in as the primary arbiter of economic life in most of the world. An increasingly streamlined and savvy capitalist system will continue to soldier on at the edges of the new economy, finding sufficient vulnerabilities to exploit, primarily as an aggregator of network services and solutions, allowing it to flourish as a powerful niche player in the new economic era, but it will no longer reign.
I understand that this seems utterly incredible to most people, so conditioned have we become to the belief that capitalism is as indispensable to our well-being as the air we breathe. But despite the best efforts of philosophers and economists over the centuries to attribute their operating assumptions to the same laws that govern nature, economic paradigms are just human constructs, not natural phenomena.
As economic paradigms go, capitalism has had a good run. Although its timeline has been relatively short compared to other economic paradigms in history, it’s fair to say that its impact on the human journey, both positive and negative, has been more dramatic and far-reaching than perhaps any other economic era in history, save for the shift from foraging/hunting to an agricultural way of life.
Ironically, capitalism’s decline is not coming at the hands of hostile forces. There are no hordes at the front gates ready to tear down the walls of the capitalist edifice. Quite the contrary. What’s undermining the capitalist system is the dramatic success of the very operating assumptions that govern it. At the heart of capitalism there lies a contradiction in the driving mechanism that has propelled it ever upward to commanding heights, but now is speeding it to its death.
The Eclipse of Capitalism
Capitalism’s raison d’être is to bring every aspect of human life into the economic arena, where it is transformed into a commodity to be exchanged as property in the marketplace. Very little of the human endeavor has been spared this transformation. The food we eat, the water we drink, the artifacts we make and use, the social relationships we engage in, the ideas we bring forth, the time we expend, and even the DNA that determines so much of who we are have all been thrown into the capitalist cauldron, where they are reorganized, assigned a price, and delivered to the market. Through most of history, markets were occasional meeting places where goods were exchanged. Today, virtually every aspect of our daily lives is connected in some way to commercial exchanges. The market defines us.
But here lies the contradiction. Capitalism’s operating logic is designed to fail by succeeding. Let me explain.
In his magnum opus, The Wealth of Nations , Adam Smith, the father of modern capitalism, posits that the market operates in much the same way as the laws governing gravity, as discovered by Isaac Newton. Just as in nature, where for every action there is an equal and opposite reaction, so too do supply and demand balance each other in the self-regulating marketplace. If consumer demand for goods and services goes up, sellers will raise their prices accordingly. If the sellers’ prices become too high, demand will drop, forcing sellers to lower the prices.
The French Enlightenment philosopher Jean-Baptiste Say, another early architect of classical economic theory, added a second assumption, again borrowing a metaphor from Newtonian physics. Say reasoned that economic activity was self-perpetuating, and that as in Newton’s first law, once economic forces are set in motion, they remain in motion unless acted upon by outside forces. He argued that “a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value. . . . The creation of one product immediately opens a vent for other products.” 1 A later generation of neoclassical economists refined Say’s
I understand that this seems utterly incredible to most people, so conditioned have we become to the belief that capitalism is as indispensable to our well-being as the air we breathe. But despite the best efforts of philosophers and economists over the centuries to attribute their operating assumptions to the same laws that govern nature, economic paradigms are just human constructs, not natural phenomena.
As economic paradigms go, capitalism has had a good run. Although its timeline has been relatively short compared to other economic paradigms in history, it’s fair to say that its impact on the human journey, both positive and negative, has been more dramatic and far-reaching than perhaps any other economic era in history, save for the shift from foraging/hunting to an agricultural way of life.
Ironically, capitalism’s decline is not coming at the hands of hostile forces. There are no hordes at the front gates ready to tear down the walls of the capitalist edifice. Quite the contrary. What’s undermining the capitalist system is the dramatic success of the very operating assumptions that govern it. At the heart of capitalism there lies a contradiction in the driving mechanism that has propelled it ever upward to commanding heights, but now is speeding it to its death.
The Eclipse of Capitalism
Capitalism’s raison d’être is to bring every aspect of human life into the economic arena, where it is transformed into a commodity to be exchanged as property in the marketplace. Very little of the human endeavor has been spared this transformation. The food we eat, the water we drink, the artifacts we make and use, the social relationships we engage in, the ideas we bring forth, the time we expend, and even the DNA that determines so much of who we are have all been thrown into the capitalist cauldron, where they are reorganized, assigned a price, and delivered to the market. Through most of history, markets were occasional meeting places where goods were exchanged. Today, virtually every aspect of our daily lives is connected in some way to commercial exchanges. The market defines us.
But here lies the contradiction. Capitalism’s operating logic is designed to fail by succeeding. Let me explain.
In his magnum opus, The Wealth of Nations , Adam Smith, the father of modern capitalism, posits that the market operates in much the same way as the laws governing gravity, as discovered by Isaac Newton. Just as in nature, where for every action there is an equal and opposite reaction, so too do supply and demand balance each other in the self-regulating marketplace. If consumer demand for goods and services goes up, sellers will raise their prices accordingly. If the sellers’ prices become too high, demand will drop, forcing sellers to lower the prices.
The French Enlightenment philosopher Jean-Baptiste Say, another early architect of classical economic theory, added a second assumption, again borrowing a metaphor from Newtonian physics. Say reasoned that economic activity was self-perpetuating, and that as in Newton’s first law, once economic forces are set in motion, they remain in motion unless acted upon by outside forces. He argued that “a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value. . . . The creation of one product immediately opens a vent for other products.” 1 A later generation of neoclassical economists refined Say’s
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