Zero Marginal Cost Society

* Book: The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. by Jeremy Rifkin. Palgrave Macmillan, 2014

URL = http://www.thezeromarginalcostsociety.com/ [1]

Description

"In The Zero Marginal Cost Society, New York Times bestselling author Jeremy Rifkin argues that the capitalist era is passing—not quickly, but inevitably. The emerging Internet of Things is giving rise to a new economic system—the Collaborative Commons—that will transform our way of life.

In his provocative new book, The Zero Marginal Cost Society, Mr. Rifkin argues that the coming together of the Communication Internet with the fledgling Energy Internet and Logistics Internet in a seamless 21st century intelligent infrastructure—the Internet of Things—is boosting productivity to the point where the marginal cost of producing many goods and services is nearly zero, making them essentially free. The result is corporate profits are beginning to dry up, property rights are weakening, and the conventional mindset of scarcity is slowly giving way to the possibility of abundance. The zero marginal cost phenomenon is spawning a hybrid economy—part capitalist market and part Collaborative Commons—with far reaching implications for society.

Rifkin describes how hundreds of millions of people are already transferring parts of their economic lives from capitalist markets to what he calls the global “Collaborative Commons.” “Prosumers” are 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 cooperatives at low or near zero marginal cost. Students are even enrolling in free massive open online courses (MOOCs) that operate at near zero marginal cost. And young social entrepreneurs are establishing ecologically sensitive businesses using crowdfunding as well as creating alternative currencies in the new sharing economy. In this new world, social capital is as important as finance capital, access trumps ownership, cooperation supersedes competition, and “exchange value” in the capitalist marketplace is increasingly replaced by “sharable value” on the Collaborative Commons.

Rifkin concludes that while capitalism will be with us for the foreseeable future, albeit in an increasingly diminished role, it will not be the dominant economic paradigm by the second half of the 21st Century. We are, Rifkin says, entering a world beyond markets where we are learning how to live together in an increasingly interdependent global Collaborative Commons."

Review

Richard Waters:

"The heart of Rifkin’s argument:

"If the marginal cost of producing each additional item falls to essentially nothing, then everything becomes free. In their pursuit of profit, businesses will have irrevocably undermined their own margins: capitalism will have destroyed itself. But don’t despair. Rising in its place, Rifkin argues, will be a civilisation based on a new and more fulfilling communitarianism, free of the hang-ups that have characterised the materialistic individualism of the late capitalist age.

Though only 300 or so pages, this is sometimes a dense book. Besides detours into subjects such as the economic history of the human race from earliest times, there are sections that pack in extensive descriptions of some of the key technologies. They include 3D printing; open-source software; the internet of things; the sharing economy; the online courses that are reshaping education; and the artificial intelligence enabling machines to replace many types of human labour.

An extensive bibliography shows that Rifkin has read widely and compressed the results into his latest tome – though, to be fair to his previous work, he has also written entire books himself on several of the themes that converge here. That makes this something of a grand unifying theory of his thinking over four decades. Three of Rifkin’s predictions serve to illustrate both the breadth and the finality of his arguments. One is that the “sharing economy” (think letting out your spare room on Airbnb or summoning a car on Uber) will overthrow some of the biggest companies on the planet. It will only take between 10 and 30 per cent of a particular market to shift to these self-help networks, argues Rifkin, for the thin profit margins of giant companies to shrink to nothing.

A second prediction is that a decentralised network of alternative energy sources will replace the existing vertically integrated, carbon-based energy industry. It will be made up of “prosumers” generating their own power and networked together through a smart grid that routes power to where it is needed. By the middle of this century, says Rifkin, 80 per cent of electricity will be generated this way – an estimate he claims is conservative.

A third trend is the elimination of work, as the machines take over. According to Rifkin, workers – and the profitmaking companies that employ them – can look forward to one last hurrah. This will cover the 40-year period it takes to build the world’s smart, self-replicating infrastructure. After that, it will be the end of history for labour: apart from a few people needed to programme and monitor the machines, it’s all over for the wage slaves and salarymen.

This all sounds ominous. But Rifkin reaches an optimistic conclusion. He anticipates a world of plenty where individuals will lead more fulfilling lives than they do now, with their material wants taken care of and their days of toil at an end. Fulfilment, he argues, will come from building “social capital”. Freed from the need to earn a living, people will get closer to the things that really matter: collaborating – and empathising – with other people." (http://www.ft.com/cms/s/2/7713c7fc-b07a-11e3-8efc-00144feab7de.html)