Author examines society after capitalism’s eclipse
Jeremy Rifkin has written 20 books, including The Third Industrial Revolution, which is about his vision of a sustainable, post- carbon economic paradigm. He is an adviser to the European Union and a lecturer at the Wharton School’s Executive Education Program at the University of Pennsylvania. His new book is The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons and the Eclipse of Capitalism.
Q Tell us a bit about your book and how it builds on your other books.
A A paradox exists at the heart of capitalism that has propelled it ever upwards, but is now taking it to its death — the inherent entrepreneurial dynamism of competitive markets that drives productivity up and marginal costs down, enabling businesses to reduce the price of their goods and services in order to win over consumers and market share. While economists have always welcomed a reduction in marginal cost, they never anticipated the possibility of a technological revolution that might bring marginal costs to near zero, making goods and services priceless, nearly free, and abundant, and no longer subject to market forces. Now, a formidable new technology infrastructure — the Internet of things ( IoT) — is emerging with the potential of pushing large segments of economic life to near zero marginal cost in the years ahead. A mature Communication Internet is converging with a nascent Energy Internet and Logistics Internet to create a new technology platform that connects everything and everyone. Prosumers can connect to the network and use Big Data, analytics, and algorithms to accelerate efficiency, dramatically increase productivity, and lower the marginal cost of producing and sharing a wide range of products and services to near zero.
Q Would you say the changes of the 21st century are as monumental as those of the Renaissance or the Industrial Revolution?
A The plummeting of marginal costs is spawning a hybrid economy — part capitalist market and part Collaborative Commons — with far- reaching implications for society. Hundreds of millions of people are already transferring parts of their economic lives to the global Collaborative Commons. Prosumers are plugging into the fledgling IoT and making and sharing their own information, entertainment, green energy, and 3- D- printed products at near zero marginal cost. They are also sharing cars, homes, clothes and other items via social media sites, rentals, redistribution clubs, and co- operatives at low or near zero marginal cost. Meanwhile, students are enrolling in free massive open online courses ( MOOCs) that operate at near zero marginal cost. Social entrepreneurs are bypassing the banking establishment by using crowdfunding to finance socially responsible businesses as well as creating alternative currencies in the fledgling sharing economy.
Q Will we all have 3- D printers at home one day in the not- too- distant future?
A Hundreds of companies are now producing physical products the way software produces information in the form of video, audio, and text. 3- D printing is the “manufacturing” model that accompanies an IoT economy. Software — often open source — directs molten plastic, molten metal, or other feedstocks inside a printer, to build up a physical product layer by layer, creating a fully formed object, even with movable parts, which then pops out of the printer. Printers are already producing products from jewelry and airplane parts to human prostheses.
Q The Internet has already automated many jobs. Will 3- D printers do the same to an even greater extent?
A Nowhere are the effects of the zero marginal cost phenomenon becoming more widely felt than in the changing nature of employment. IT, computerization, Big Data, advanced analytics, predictive algorithms, automation, and AI embedded in the Internet of Things are quickly reducing the marginal labour costs of producing and delivering many goods and services to near zero. Near workerless factories and offices, virtual retailing, and automated logistics and transport networks are increasingly becoming the norm — all of which poses the question, how will people make a living? Millions of people are beginning to migrate to the non- profit sector where they are finding jobs that require hands- on human engagement, including health care, education, child care, care for the elderly, environmental remediation, cultural activities, etc. This now exceeds 10 per cent of the workforce in Canada, the U. S., and the U. K.
Q Some people might find the idea that jobs and profits are going to disappear scary. Should we worry about this?
A If the steam engine freed human beings from feudal bondage to pursue material self- interest in the capitalist marketplace, the Internet of Things frees human beings from the market economy to pursue nonmaterial shared interests on the Collaborative Commons. Many — but not all — of our basic material needs will be met for nearly free in a near zero marginal cost society. Intelligent technology will do most of the heavy lifting in an economy centred on abundance rather than scarcity. A halfcentury from now, our grandchildren are likely to look back at the era of mass employment in the market with the same sense of utter disbelief as we look upon slavery and serfdom in former times. The very idea that a human being’s worth was measured almost exclusively by his or her productive output of goods and services and material wealth will seem primitive, even barbaric, to our progeny living in a highly automated world.