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Economic Development

No Value

A "big think" look at the future of capitalism fails to reckon with the factors that make capitalism so resilient.

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

Jeremy Rifkin

356 pages, Palgrave MacMillan, 2014

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Worried that capital accumulation is driving ever-greater wealth inequality? Concerned that we have already lost the climate change battle? I have good news. According to Jeremy Rifkin, author of The End of Work and The Third Industrial Revolution, you can rest easy. In his new book, The Zero Marginal Cost Society, Rifkin argues that we are about to enter an era when the Internet of Things, “free” energy, and what he calls “the collaborative commons” will make anything and everything available for practically nothing. Together, he contends, those developments will overthrow capitalism as the world’s dominant economic model.

If you think that idea sounds silly, well, you’re right. And Rifkin expounding on it for 300-plus pages of 10-point text—all of it buttressed by 770 endnotes—doesn’t make it any less so. To be fair, those 770 source notes offer a comprehensive tour of trends that will definitely shape the near future. But Rifkin’s assembly of this information into a narrative hits all the low notes that are common to “big think” books:

  • Attacking nebulous concepts that you don’t define? Check.
  • Name-dropping your consulting company, which just happens to specialize in charging people to solve problems that you’ve invented? Check.
  • Writing jargon-filled sentences that might mean anything (or nothing)? Check.
  • Invoking historical inevitability to mask poorly supported premises? Check.
  • Ignoring issues of political power and economic incentive that shape our daily lives and our future? Check.

I found Zero Marginal Cost Society to be so utterly unconvincing that I have to take seriously the possibility that I simply don’t get it. I kept going back to the book, looking for an insight that would make everything click. I never found it.

Central to the book is the idea that developments such as the emergent “sharing economy” will overthrow capitalism. “The Collaborative Commons is ascendant,” Rifkin writes, “and, by 2050, it will likely settle in as the primary arbiter of economic life in most of the world.” By his reckoning, we’re moving into a post-consumption society in which the ownership of stuff no longer matters. Who needs to own a chainsaw, or even a car, when you can share one? As Catherine Rampell pointed out recently in The Washington Post, even preschoolers recognize that companies like Uber and Airbnb have nothing to do with sharing as most of us understand it. Someone who owns capital charges others for temporary access to it. How others pay that charge—through barter, with currency, or by some other means—is not particularly relevant. The so-called sharing economy is still capitalism.

What is relevant is how people accumulate value that they can exchange for what they need and want. Rifkin believes that large, centralized organizations will crumble as customers and employees realize that those organizations no longer serve a purpose. “What if,” he asks, consumers “began to use the distributed, collaborative nature of the Internet to create lateral economies of scale”? What if they could “[skip] all the middle men, markups, and margins on the traditional capitalist value chain”?

“What if,” indeed. A future in which most people are micro-entrepreneurs (to borrow a term from the international development sphere) is not likely to be a bright one. That, as Rifkin notes, is what the world looked like before the Industrial Revolution. There’s a reason that people desperately tried to escape that world—and that people in developing countries are still trying to escape it. In developing economies, micro-entrepreneurship (farming, petty trading, cottage manufacturing) accounts for a large part of many families’ income, and most people in that situation report that what they want is not to expand their microenterprise, but to land a secure, decent-paying job.

In developed countries, meanwhile, micro-entrepreneurship has returned in the form of uncertain jobs and lingering unemployment. Those who have been able to use Etsy, Uber, or TaskRabbit to find a happy replacement for a traditional job are few and far between. As other writers have noted, hustling to survive in the sharing economy that Rifkin lionizes is as likely to be soul-crushing as not.

Still, Rifkin argues, perhaps it won’t be so hard to scramble for what you need once everything has become practically free. He cites John Maynard Keynes’s vision of a future in which little labor will be required to meet everyone’s basic needs and people will spend much of their time in leisure—and he says that this vision will soon be realized. Yet the Keynesian utopia has failed to materialize for a very simple reason: There is always something more to desire.

Barter and sharing economies are tremendously inefficient; that’s why they have only a niche presence today. Technology reduces some of those inefficiencies, but not by any means all of them. Rifkin suggests that cooperative associations will soon overthrow corporations as the dominant way to organize activities that require large amounts of capital and coordination. The reason that corporations are so prevalent is that they provide the cheapest way to align the competing interests of multiple stakeholders—from investors to managers to employees. Nothing about the Internet, solar power, or 3D printing will change the fact that individuals have conflicting needs and desires.

In fact, there is a remarkable technology for turning competing interests into the common good, but it isn’t new: markets. Markets are imperfect, but they work better for this purpose than most alternatives in most situations. Even for Rifkin, the future consists of people trading in markets. After all, people still need a venue in which they can “share,” barter, and trade. In other words: Meet the new boss, same as the old boss.

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