The Zero Marginal Cost Society-Jeremy Rifkin

The great paradigm shift from market

capitalism to the Collaborative Commons

 

-For more than ten generations the capitalist market was dominant

-Today we face a hybrid economy: capitalist market and Collaborative Commons

-The importance of the capitalist market will shrink in the future

-The capitalist market destroys itself with it’s own processes

 

The Eclipse of capitalism

-Capitalism transforms every aspect of human life into a commodity

-Contradiction within this system: Prices are driven down by competition and the increase in productivity

-Price equals marginal cost equals zero: No profits

– Profits are the „lifeblood of capitalism“, if they dry up, capitalism can’t survive.

-This is already happening in the publishing, communications and entertainment industries, e.g. the book industry

-People turn into „prosumers“  in the sectors of renewable energy, 3D printing or online higher education

– This leads to an era where „most goods and services are nearly free, profit is defunct, property is meaningless and the market is superfluous”

-Lange (1937): System is at war with itself

-Keynes (1931): Technological unemployment

-Summers and DeLong (2001): Monopolies as solution to this problem

-A zero marginal cost society is the triumph of capitalism and the death of it too

 

Changing the economic paradigm

-Paradigm: „A system of beliefs and assumptions that operate together to establish an integrated und unified worldview that is so convincing and compelling that it is regarded as tantamount to reality itself“ (Kuhn 1962)

-Capitalist paradigm was seen as the ideal form of organising the economic activity in the most efficient way

-Today there:

  • are more interdisciplinary approaches that include the laws of thermodynamics
  • is new technology available for Communication, Energy and Logistics: The Internet of Things. We experience a Third Industrial Revolution

 

The Internet of things

 -Everything is connected: e.g. people, machines, natural resources, production lines, logistic networks, consumption habits, recycling flows

Big Data gets feeded to improve the efficiency of the systems

-Smart Cities are created with sensors in infrastructure, with monitoring of traffic, vehicles, garbage, pollution, with sensors for farmers, the human body and for security reasons

-The IoT connects the natural environment with the built environment to improve especially thermodynamic efficiencies

-Concerns about security and personal privacy

– Leading information technology companies are already working on the IoT, e.g. General Electric, Cisco, IBM and Siemens

– Every infrastructure needs a communication medium, a power-source and a logistics mechanism

 

The rise of the Collaborative Commons

-The Commons is „the oldest form of institutionalized, self-managed activity in the world“

– The commons-management began within the feudal societies

-In the following market economy and capitalist system new forms of Commons were created, e.g. charitable societies, schools, hospitals, trade unions, cooperatives and cultural institutions

-Social Commons create social value and often not pecuniary value

-The Third Sector is essential and helps to give us an identity and a sense of purpose

-The capitalist market focuses on material gain and everyone is very self-interested. The social Commons is based on the desire to connect with others and share because everyone has a collaborative interest.

-The IoT supports the spirit of the social Commons

– Collaborative Commons are emerging

– Collaboratism instead of capitalism or socialism

-People are social entrepreneurs

-Value gets shared and not exchanged in the Collaborative Commons

-GDP grows at e declining rate because:

  • marginal costs decline in a growing number of sectors
  • fewer purchases are being made
  • the purchases last longer
  • people don’t pay for the products but for their time of usage: Sharing Economy
  • technology replaces the jobs of actual people
  • there are more prosumers that share and there is less exchange at the marketplace

-It is important to understand how paradigmas emerged to understand how they can end: centralised power ressources and communication in the past centuries and more decentralised today

-The IoT is the only form of communication that can organise the renewable energies

-Fixed costs to build technological infrastructure are less than in the past centuries

-A Paradigma is more natural as it integrates the aspects of nature

 

References:

Keynes, John Maynard (1931): Essays in Persuasion. London.

Kuhn, Thomas S. (1962): The Structure of Scientific Revolutions. Chicago.

Lange, Oskar (1937): On the Economic Theory of Socialism: Part Two. In: Review of Economic Studies 4(2), 129.

Rifkin, Jeremy (2014): The Zero Marginal Cost Society. The Internet of Things, the Collaborative Commons and the eclipse of capitalism. New York.

Summers, Lawrence; DeLong, Bradford J. (2001): Economic policy for the Information Economy. Symposium in Jackson Hole.

 

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