9 ms·

Capitalism is making way for the age of free

• kleinsch 13y ago
  "Anyone will be able to access the internet of things and use big data and analytics to develop predictive algorithms that can speed efficiency, dramatically increase productivity and lower the marginal cost of producing and distributing physical things, including energy, products and services, to near zero, just as we now do with information goods." Saying that the Internet of things will bring the marginal cost of energy prices to near zero because of big data seems like a stretch to me, as well as some amazing buzzword bingo.
  • ArbitraryLimits 13y ago
    That's a lot of buzzwords in one sentence. Reminds me of the early 90s when everything had to use neuro fuzzy wavelets.
    • pachydermic 13y ago
      It's almost as if that sentence itself were pieced together by some kind of blagosphere-mining machine learning algorithm. I guess that's kind of what writers do?
      • WalterSear 13y ago
        Either they do that, or the press a button on one and then go do what they really wanted to do.
    • deleted 13y ago
      [deleted]
• dcre 13y ago
  I'll believe it when people don't have to work in order to eat.
  • AndrewKemendo 13y ago
    This is why I feel like farm to plate automation is the core technology that makes the future real. My concern is that people will reject it out of the lack of variety at the start.
    • neuralk 13y ago
      >farm to plate automation I'm not sure what you mean. Are you referring to a specific technology (like Soylent) or just automating the process of growing, harvesting, and distributing food?
      • AndrewKemendo 13y ago
        The latter, where growing, harvesting, processing and delivery is done through a repeatable automated process.
    • pekk 13y ago
      And yet automats are out of style for some reason...
    • ctdonath 13y ago
      How much such automation is left to improve? There may still be room for technology proliferation, but at least for staples it may be about as automated as possible: vegetables automatically picked, cut, frozen, bagged on the spot and shipped directly to retail stores; likewise for grains, milk, frozen meals... there's a bottom line cost to growing 2000 calories of food and shipping it N miles to the consumer, and that cost is NOT going to "approach zero". I dunno how far from that bottom line we are, but suspect we're well within an order of magnitude of it.
      • AndrewKemendo 13y ago
        I agree that there is a massively high rate of automation already employed in the agricultural sector, however much like the difficulty of high speed internet is focused on the last mile, the last mile for food automation is in cooking and delivery in a palatable, healthy and convenient manner. To those ends, the logistics of food production are massively intensive and account for most of the food waste worldwide, so shrinking the logistics chain alone would significantly reduce costs and improve quality. I am thinking in this regard about the containerized growing systems that are starting to enter the market.
• peterashford 13y ago
  This is overblown. We still need food, we still need heavy engineering, we still need nanotech. Yes, there are some simple things that can be manufactured differently to how they had been in the past, but even those are still not free. The printers are not free, their consumables are not free and they can't produce more than a small fraction of the things we currently buy. I think this tech will be revolutionary, don't get me wrong, but I don't think everything is going to be free nor do I think capitalism is going anywhere fast (at least, not on account of 3d printers!)
• norswap 13y ago
  inb4 the lawsuits.
  • norswap 13y ago
    Despite the comical form, this comment is totally serious. Lawsuits also apply in domains where copyright is not an object (e.g. construction): look at what happened between Uber and the taxi unions.
• pknight 13y ago
  What's interesting to me is that the real tipping point is when we are able to produce energy easily and cheaply in a virtually unlimited fashion, without relying on scarce resources. It will accelerate our means to produce virtually anything locally, making the whole chain of production much less vulnerable to disaster. You could build vertical farms driven by technology (eliminating the need for pesticides, or huge land resources) and optimize food production. We'll be able to produce enough of what we need 10x over and with a small ecological foot print. It's really interesting the things that become possible and economically viable once you have virtually unlimited energy. If there is one reason to keep living and be excited it is to see that day. It will be monumental. It will be bigger than the printing press or the electrical grid and maybe even the advent of the computer. With unlimited, cheap energy, just imagine what we'll be able to do. Just imagine what the human race has been able to do in the 19th and 20th century with the advent of factories and machines. We built amazing tunnels, skyscrapers and road networks. Imagine what we could in a different context, with different objectives. What if cleaning up the environment and creating beautiful buildings, parks and infrastructure again became the equivalent of what used to spur the economy on in the 19th and 20th century. The cool thing is it could potentially happen in the next 30 years. There are so many different promising energy production technologies being worked on right now. It is only a matter of time.
  • jabits 13y ago
    This is so true. With cheap energy we could re-use/recycle resources down to the Molecular level.
  • ams6110 13y ago
    I what dream world will this happen?
  • alexeisadeski3 13y ago
    US spends a whopping 8.3% of GDP on energy. Cheap(er) abundant(er) energy would be great but not transformative.
    • Guvante 13y ago
• michaelfeathers 13y ago
  Very odd that there was no mention of IP and the monopolies that copyright and patents bestow.
• vonnik 13y ago
  There's a fundamental difference between goods and services composed of bits, and those composed of other forms of energy and matter. The marginal cost of many physical goods will never be zero. At least not until we have limitless amounts of energy to recompose molecules as we wish. I think that's a long way off. What Rifkin isn't really analyzing is the role of free. Why do people provide free goods and services? It's usually for the same reason grocery stores and heroine dealers do: to let you test the merchandise, so they can make money if you want more. "Free" is simply a way to lower the friction points for consumers, and draw public attention.
• dwaltrip 13y ago
  The end of scarcity, which is a necessary condition for reducing the marginal cost of non-digital goods to zero, is still a ways away.
  • svachalek 13y ago
    Exactly. What this article fails to mention is that during the same golden decade of the "prosumer", the costs of commodities have skyrocketed.
• JohnDoe365 13y ago
  If it reads 'Capitalism is making way for basic income' it would have make sense. Not that way. Freemium is often paving the way for even more agressive capitalsim by crowding out competitors to raise prices afterwards.
• brenschluss 13y ago
  "Marx never asked what might happen if intense global competition some time in the future forced entrepreneurs to introduce ever more efficient technologies, accelerating productivity to the point where the marginal cost of production approached zero, making goods and services "priceless" and potentially free, putting an end to profit and rendering the market exchange economy obsolete." Uh, Marx did ask that question. It's called the tendency of the rate of profit to fall. The problem with increased productivity and lower marginal costs is that labor, too, becomes less and less valuable. Supply of labor goes up; demand of labor goes down. People are more easily exploited.
  • ataggart 13y ago
    I wonder why so many people always assume that increased productivity means fewer workers instead of more goods.
• barce 13y ago
  "Summers and DeLong focused their presentation on the new communication technologies that were already reducing the marginal (per-unit) cost of producing and sending information goods to near zero." Yes, sending an email can be free. But the infrastructure for the Internet? The article really ignored how many tax payer dollars went into different public institutions to make the Internet a reality, e.g. Big Government and universities.
  • hnnewguy 13y ago
    >The article really ignored how many tax payer dollars went into different public institutions to make the Internet a reality" Which is why their analysis focuses on the marginal cost, which is the cost of producing the next unit (or sending the next piece of information electronically). Even if you amortize infrastructure costs over each piece of information sent, the costs are on their way to near-zero.
• ctdonath 13y ago
  "with information goods the social marginal cost of distribution is close to zero ... If information goods are to be distributed at their marginal cost of production – zero – they cannot be created and produced by entrepreneurial firms that use revenues obtained from sales to consumers to cover their [fixed set-up] costs … [companies] must be able to anticipate selling their products at a profit to someone." 1/N > 0 for N = (1,∞) There is a very significant difference between a cost of distribution close to zero vs actually zero. So long as revenue costs are above zero, entrepreneurial firms can find a way to profit enough for food, clothing, and shelter. There is a basic cost to survival (food/clothing/shelter/healthcare is not, and never will be, free), requiring everyone contribute something which another will consider valuable enough to exchange their work for. Confiscation of "excess" fails as it disincentives increased productivity. So long as people have a motive to either elicit value from their environment, or persuade others to trade that value in a mutually beneficial manner, capitalism will ensure enough productivity to provide for all ... and as marginal costs decrease towards (but not reach!) zero, incentive is there to accelerate productivity to match.
  • to3m 13y ago
    I don't understand why companies won't simply ignore his suggestion that they can't do what he says they can't, and use revenues obtained from sales to cover their fixed costs. The fact that their marginal cost is zero has precisely no relevance; they've spent money making whatever it is they've made, and they need it made back. And the burden of paying for all of this will fall on the customer, just as it does today. As an example, consider some top-selling video game on the iOS app store. The $100/year fee for the development licence isn't nothing, but compared to the cost of the staff and their equipment, it really might as well be. And yet it's perfectly possible for these things to make money, and in the cases they don't, the zero marginal cost thing has absolutely nothing to do with it. In fact the zero marginal cost is a major draw, for exactly the reasons I give in my first paragraph. This seems like some an obvious rebuttal that I can only imagine I've missed something... (Another article from this chap reached the front page a couple of weeks ago - see https://news.ycombinator.com/item?id=7406894 https://news.ycombinator.com/item?id=7406894 - basically the same thing.)
  • Double_Cast 13y ago
• hershel 13y ago
  The most realistic case of something close to this scenario happening, is that virtual reality will greatly improve and people will prefer to mostly live there. And in virtual reality ,marginal cost does go to zero.
• spikels 13y ago
  Rifkin has been pushing these ideas (basically advancing technology will require his preferred political positions) for 20+ years (see "End of Work" (1995)). He just updates the buzzwords and publishes it as a new book (see "The Age of Access" (2000) and "The Zero Marginal Cost Society" (2014)). As usual there are a few grains of truth (jobs replaced by technology, drastically lower costs for some products) but it is mostly just well known falsehoods (lump of labor fallacy). In the end you will know less after listening to Rifkin's arguments.
  • Shivetya 13y ago
    Well robotics will make about anything possible as time and tedium will be removed as barriers. In a society where supply is merely a result of time there won't be much to want or steal. At least if your in that first world part of the world. Yeah there are costs involved in setting it all up, but with robotics it comes down to material access to build with. The nice thing about robotics is you can put them into inhospitable areas for about, well forever. I fully expect there will be a generation not too far off whose primary source of work is creating things just because and not for whom. Oh sure there will be people who do and do for others, but it won't be a real requirement. Just like a small number of people get the real work done in most work environments so will society migrate too.
  • gojomo 13y ago
    The fun thing is Rifkin has also sometimes been a doomsayer – especially with regard to genetic biotech or global energy. I think in his career he's aiming more for "say thought-provoking things" than "be substantially correct in retrospect". That can be OK!
• return0 13y ago
  What about innovation and quality? Let's assume that digital technologies finally make entertainment essentially free. Who will make the good movies? Do we have lower quality entertainment since it started becoming increasingly cheaper? It would be interesting to see studies on that. Now suppose an analogous situation occurs with food, energy etc. Does this mean we will eventually end up eating pizza every day?
• diminoten 13y ago
  > Over the past decade millions of consumers have become prosumers, producing and sharing music, videos, news, and knowledge at near-zero marginal cost and nearly for free, shrinking revenues in the music, newspaper and book-publishing industries. No, these things aren't produced for "free". They're replicated for "free". Huge difference. The first cancer vaccine will "cost" trillions of spent research dollars. The second one? Probably a few cents, if that. Let's not, especially on this site, forget about how important investors are.
  • WalterSear 13y ago
    I don't think that's what they are talking about. I think they are talking about how fast things are getting cheaper to design, including, eventually, vaccines.
• ilbe 13y ago
  What's most troublesome is statements like this, typical of the guardian: "A new economic paradigm – the collaborative commons – has leaped onto the world stage as a powerful challenger to the capitalist market." Whereas capitalism as a philosophy is about individual rights and private property, this "new collaborative economy" stinks of failed historical experiments.
• zackmorris 13y ago
  Unfortunately since the US chose to go with Friedman/supply side economics since about the 80s, we're in a race to the bottom. Lower production costs used to equate to increased consumption, but that didn’t account for finite resources. If we factor in externalities like pollution, the value being produced in the world has been constant for quite some time, maybe as far back as the 80s also. And worse, a whole slew of markets like oil/fishing/timber/mining are in decline. So we’re in this bizarre situation of everything being destroyed, but hey, prices are cheaper than ever. Too bad incomes are in decline too so nobody can afford to buy anything anyway. Contrast this with Keynesian/demand side economics that countries like Germany and Finland have adopted, where one of the top priorities is per-capita income. In Germany, 50% of a company’s board must be made up of labor, and during downturns the government pays people to go on furloughs while they are still employed (to maintain demand by propping up buying power) . And in Finland, they redistribute the North Sea oil money back into the economy (I realize this is not sustainable, I’m just saying that it’s arguably better than what the US does). Education, maternity leave, healthcare, pretty much everything that contributes to a higher quality of life is given priority over profit. They’ve been at it so long that their customer base is huge and companies are able to invest in long term planning and research. Jobs are plentiful, one can’t hardly even get fired, and the middle class is huge. Regardless of political ideology, if we look out 10, 20, 30 years, it’s pretty obvious that natural resources are going to go into the toilet and more and more work is going to be done by machines. Communism was able to absorb that by forcing everyone to work unproductive jobs. Socialism seems to be able to absorb it to some degree by focussing on people first. But capitalism.. I don’t know. It’s the economic form of darwinism. If it’s going to survive into the future then I think it’s going to evolve into something unrecognizable. To me it looks like there are two extremes: a Star Trek economy with guaranteed basic incomes or a new gilded age where perhaps 1000 people own all of the wealth on the planet and people’s labor/personal profit is on an ever declining trajectory.
  • dnautics 13y ago
    "it’s pretty obvious that natural resources are going to go into the toilet and more and more work is going to be done by machines" These seem to be contradictory. If natural resources are going to go into the toilet, wouldn't intensive labor be more necessary? What are you using to power and build the machines?
• dnautics 13y ago
  "the most basic condition for economic efficiency: [is] that price equal marginal cost" Huh? I would think that economic efficiency is when something that is hugely desired gets delivered, meaning that price would be way higher than marginal cost.
• upofadown 13y ago
  It seems to me that capitalism is struggling because of a lack of technological progress, not because of a surplus of it. There really haven't been any major breakthroughs for a while for improving access to energy or materials. Manufacturing is if anything degrading; the new hotness is finding people to work cheap. That's probably because robotics has been stagnant for too long. Food production is more or less a fight to stay even. This is an age of improvements in computing/communications. That is eventually going to help other areas but for now people seem to be determined to stop that from happening...