Predicting a New Economic Era

Book reviews

zero marginal cost

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism (2014)

Despite its unenticing title, I emphatically recommend this book. It is easily one of the most important books I’ve read lately, as it gave me a better comprehension of the wrenching changes our world is going through as well as providing some welcome hope for our collective future.

The full title is “The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism,” most of which was opaque to me until I read the book. It was the phrase “eclipse of capitalism” that caught my curiosity, and the author’s familiar name that sealed the deal.

Jeremey Rifkin is known for his best-selling works making sense of social, economic and technological trends in the modern world. I’ve read two of his nearly two-dozen previous books, “Own Your Own Job” (1977) and “The End of Work” (1995), one on worker ownership and the other on the impact of automation on employment. Both were targeted on topics I was puzzling through when I came across them, and this one fits the same pattern. We must be on similar wavelengths.

His topic this time is how the internet is radically changing the world economy. And he really means radically in its literal sense—going right to the roots. According to Rifkin, we are experiencing the beginnings of a shift from one economic era to another that is as big as the shift from feudalism to industrial capitalism. We’re talking big, folks.

Each era’s energy/communications/transportation nexus determines the kinds of economic and social institutions that dominate it. Human energy, oral communications, and travel by foot gives you one kind of world (a prehistoric hunter-gatherer one), and animal energy, written communications, and travel by wheeled vehicles another (a settled agricultural civilization). Advances in technology cause these shifts.

Fossil-fuel energy, radio and television communications, and national highway systems gave us the mature industrial economy of the 20th century, the world I grew up in. This was a world of huge corporations (needed to amass the capital for extracting fossil fuels and transmitting the energy to industry), mass advertising, and automobile-dependent lifestyles. The mindset of such a world is predominantly one of profit-seeking, status through ownership, and the desire for individual autonomy. That world still has a grip on us, but a new world is prying us away.

The primary game changer, of course, is the internet. Energy can now be produced by renewable sources like the sun and the wind, generated at individual homes and businesses and managed for greatest efficiency by smart meters connected through the internet. Communication is also through the internet, where everyone can contribute and receive information and ideas from everywhere. Transportation can be managed by radio devices on every item being sent somewhere across a networked system of transport vehicles, and people travel by accessing cars, bikes, trains and other vehicles via their smartphones.

Together, these and other changes—3D printers that can create products, including cars, houses, and human organs, at homes or nearby locations; online college courses; ebooks and audio and video streaming—are developing a whole different socio-economic paradigm.

The common factor is that the cost of producing and distributing each additional unit of the stuff we need or want is approaching, or has already reached, zero. (Thus “Zero Marginal Cost.”) Once the infrastructure is paid off, stuff becomes free. This change will produce an age of abundance with less stress on the environment and means the end of capitalism, top-down corporations, and the old mindset.

The new mindset, seen especially in the Millennial Generation, is one of collaboration, of sharing instead of owning, and of seeking human connection with other people. The latter is the latest in a trend, with each succeeding era, for people to be able to empathize with a larger circle of life. We’ve gone from tribal consciousness, to identifying with co-religionists, to nationalism, to an emerging world consciousness of identifying with all people and even the biosphere itself.

But don’t expect the transition to be easy. The representatives of the old order have been busily trying to strangle the new one in its crib, seeking to exert control over the new technology and privatize its benefits. We see this in current political contests, such as over open access to the internet. How this struggle plays out will make the transition longer or shorter, rougher or smoother, but the end result is foreordained by the nature of the new technology.

Unless, of course, disaster strikes us first. Rifkin identifies two primary threats to this rosy picture of abundance and human connection. One is climate change, which if not stopped will throw us into unimaginable devastation. The other is cyberterrorism, which when everything is plugged into the net can bring down society’s basic life-support systems.

Counter-balancing these threats is Rifkin’s hope in the shift of consciousness to greater and wider human empathy, a hope I sorely want to believe in. Whether he is right or not, we’ll need hope as we pass through the challenges and threats of this new era.

One wrinkle he does not sufficiently address, in my opinion, is how people will earn a living in the transitional period to utopia. Jobs are being destroyed by technology faster than they’re being created, yet people will still need a money income to purchase many of the basics of life as well as access to the internet (for now).

Rifkin predicts that many workers will shift into new technology areas, such as renewable energy and digital products, as is already happening. But most people will find employment in the non-profit or semi non-profit sectors. (Semi non-profit companies temper profit-seeking with social and environmental goals.)

But where will the non-profit sector get the money from? Money is now rapidly flowing to a small percentage of the population, primarily the owners, top managers and financiers of the old economy. How can that money be redirected to the non-profit sector in amounts large enough to create jobs for everyone who will need them? It will probably take a revolution of some kind, hopefully a non-violent one.

Rifkin has obviously written a thought-provoking book, as it provoked the thought I just shared with you. And not only that one, lots of thoughts—plus an “aha!” lightbulb blinking on over my head as I began fitting a hodge-podge of impressions and information into a new cognitive map.

Read it if you want to understand what is going on all around you.

–Alan F. Zundel

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