We are entering the postsocialism and postcapitalism era. At the heart of further change to come is information technology, new ways of working and the sharing economy. The old ways will take a long while to disappear, but it’s time to be utopian.
DO COLLAPSED COUNTRIES HAVE THE ADVANTAGE?
Could Greece and Argentina be the first economies beyond capitalism.
Banks natinalised, multi-currencies, multi exchange rates, informal jobs for the working class, new opportunities before, during and after the economic collapse. Classical austerity plus monetary expansion are not the solution anymore.
SOCIALISM VS CAPITALISM?
This time, the socialist plan failed and the capitalism too. The market and the technology destroyed both. Individualism replaced collectivism and solidarity. The workfore looks like proletariat but no longer thinks or behaves as it did.
Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours, called postcapitalism.
Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years.
First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.
SUPPLY AND DEMAND: THE NEW PRICING MODEL
Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.
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COLLABORATION VS COMPETITION
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
OWNER, BORROWER, LENDER: WHO IS WHO?
New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the “sharing economy”. Buzzwords such as the “commons” and “peer-production” are thrown around, but few have bothered to ask what this development means for capitalism itself.
MICRO TRENDS TURNING MACRO
I believe it offers an escape route – but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking – about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: “This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation.”
MACHINES AND ROBOTS ARE WINNING?
Today there is no pressure from the workforce, and the technology at the centre of this innovation wave does not demand the creation of higher-consumer spending, or the re?employment of the old workforce in new jobs. Information is a machine for grinding the price of things lower and slashing the work time needed to support life on the planet.
SLOW ADAPTATION OF HUMANS
Innovation is happening but it has not, so far, triggered the fifth long upswing for capitalism that long-cycle theory would expect. The reasons lie in the specific nature of information technology.
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But what is all this information worth? You won’t find an answer in the accounts: intellectual property is valued in modern accounting standards by guesswork. A study for the SAS Institute in 2013 found that, in order to put a value on data, neither the cost of gathering it, nor the market value or the future income from it could be adequately calculated. Only through a form of accounting that included non-economic benefits, and risks, could companies actually explain to their shareholders what their data was really worth. Something is broken in the logic we use to value the most important thing in the modern world.
THE NEW ROLE OF INFORMATION
Internet of Things, Exchange platforms, Instant tracking for instant improvements.
This new role for information was creating a new, “third” kind of capitalism – as different from industrial capitalism as industrial capitalism was to the merchant and slave capitalism of the 17th and 18th centuries. But they have struggled to describe the dynamics of the new “cognitive” capitalism. And for a reason. Its dynamics are profoundly non-capitalist.
NEW INFO-BUSINESS MODEL
You can observe the truth of this in every e-business model ever constructed: monopolise and protect data, capture the free social data generated by user interaction, push commercial forces into areas of data production that were non-commercial before, mine the existing data for predictive value – always and everywhere ensuring nobody but the corporation can utilise the results.
FREE CAN BE VERY EXPENSIVE
The business models of all our modern digital giants are designed to prevent the abundance of information. Yet information is abundant. Information goods are freely replicable. Once a thing is made, it can be copied/pasted infinitely. A music track or the giant database you use to build an airliner has a production cost; but its cost of reproduction falls towards zero. Therefore, if the normal price mechanism of capitalism prevails over time, its price will fall towards zero, too.
INFORMATION AS A SOCIAL GOOD
All mainstream economics proceeds from a condition of scarcity, yet the most dynamic force in our modern world is abundant and, as hippy genius Stewart Brand once put it, “wants to be free”.
There is, alongside the world of monopolised information and surveillance created by corporations and governments, a different dynamic growing up around information
MACHINE VS HUMAN LABOR
In the “Fragment” Marx imagines an economy in which the main role of machines is to produce, and the main role of people is to supervise them. Organisation and knowledge made a bigger contribution to productive power than the work of making and running the machines. Given what Marxism was to become – a theory of exploitation based on the theft of labour time – this is a revolutionary statement. It suggests that, once knowledge becomes a productive force in its own right, outweighing the actual labour spent creating a machine, the big question becomes not one of “wages versus profits” but who controls what Marx called the “power of knowledge”. In an economy where machines do most of the work, the nature of the knowledge locked inside the machines must, he writes, be “social”.
Marx imagined the end point of this trajectory: the creation of an “ideal machine”, which lasts forever and costs nothing. A machine that could be built for nothing would, he said, add no value at all to the production process and rapidly, over several accounting periods, reduce the price, profit and labour costs of everything else it touched.
MOORE LAW APPLIED TO SOFTWARE
Once you understand that information is physical, and that software is a machine, and that storage, bandwidth and processing power are collapsing in price at exponential rates, the value of Marx’s thinking becomes clear. We are surrounded by machines that cost nothing and could, if we wanted them to, last forever.
THE POWER OF THE NETWORK
Collaborative production, using network technology to produce goods and services that only work when they are free, or shared, defines the route beyond the market system. It will need the state to create the framework – just as it created the framework for factory labour, sound currencies and free trade in the early 19th century. The postcapitalist sector is likely to coexist with the market sector for decades, but major change is happening.
NEW LABELS NEEDED
The transition will involve the state, the market and collaborative production beyond the market. But to make it happen, the entire project of the left, from protest groups to the mainstream social democratic and liberal parties, will have to be reconfigured. In fact, once people understand the logic of the postcapitalist transition, such ideas will no longer be the property of the left – but of a much wider movement, for which we will need new labels.
COULD FACEBOOK BECOME A COUNTRY?
Today the whole of society is a factory. We all participate in the creation and recreation of the brands, norms and institutions that surround us. At the same time the communication grids vital for everyday work and profit are buzzing with shared knowledge and discontent. Today it is the network – like the workshop 200 years ago – that they “cannot silence or disperse”.
By creating millions of networked people, financially exploited but with the whole of human intelligence one thumb-swipe away, info-capitalism has created a new agent of change in history: the educated and connected human being.
THE TRANSITION FROM SCARCITY ECONOMY TO ABUNDANCE
Above all, postcapitalism as a concept is about new forms of human behaviour that conventional economics would hardly recognise as relevant.
So how do we visualise the transition ahead? The only coherent parallel we have is the replacement of feudalism by capitalism – and thanks to the work of epidemiologists, geneticists and data analysts, we know a lot more about that transition than we did 50 years ago when it was “owned” by social science. The first thing we have to recognise is: different modes of production are structured around different things. Feudalism was an economic system structured by customs and laws about “obligation”. Capitalism was structured by something purely economic: the market. We can predict, from this, that postcapitalism – whose precondition is abundance – will not simply be a modified form of a complex market society. But we can only begin to grasp at a positive vision of what it will be like.
FROM FEUDALISM TO CAPITALISM TO INFORMATION ECONOMY
The feudal model of agriculture collided, first, with environmental limits and then with a massive external shock – the Black Death. After that, there was a demographic shock: too few workers for the land, which raised their wages and made the old feudal obligation system impossible to enforce. The labour shortage also forced technological innovation. The new technologies that underpinned the rise of merchant capitalism were the ones that stimulated commerce (printing and accountancy), the creation of tradeable wealth (mining, the compass and fast ships) and productivity (mathematics and the scientific method).
EVOLUTION OF MONEY AND CREDIT
Present throughout the whole process was something that looks incidental to the old system – money and credit – but which was actually destined to become the basis of the new system. In feudalism, many laws and customs were actually shaped around ignoring money; credit was, in high feudalism, seen as sinful. So when money and credit burst through the boundaries to create a market system, it felt like a revolution. Then, what gave the new system its energy was the discovery of a virtually unlimited source of free wealth in the Americas.
RENAISSANCE NEW SKILLS
A combination of all these factors took a set of people who had been marginalised under feudalism – humanists, scientists, craftsmen, lawyers, radical preachers and bohemian playwrights such as Shakespeare – and put them at the head of a social transformation. At key moments, though tentatively at first, the state switched from hindering the change to promoting it.
COMPLEXITY OF PROFIT IS IN THE EXTERNALITIES
The equivalent of the new source of free wealth? It’s not exactly wealth: it’s the “externalities” – the free stuff and wellbeing generated by networked interaction. It is the rise of non-market production, of unownable information, of peer networks and unmanaged enterprises. The internet, French economist Yann Moulier-Boutang says, is “both the ship and the ocean” when it comes to the modern equivalent of the discovery of the new world. In fact, it is the ship, the compass, the ocean and the gold.
CAPITALISM VS ECOLOGY: THE END OF GREED
The modern day external shocks are clear: energy depletion, climate change, ageing populations and migration. They are altering the dynamics of capitalism and making it unworkable in the long term. Once you understand the transition in this way, the need is not for a supercomputed Five Year Plan – but a project, the aim of which should be to expand those technologies, business models and behaviours that dissolve market forces, socialise knowledge, eradicate the need for work and push the economy towards abundance. I call it Project Zero – because its aims are a zero-carbon-energy system; the production of machines, products and services with zero marginal costs; and the reduction of necessary work time as close as possible to zero.
OPEN SOURCE MODEL FOR A NEW ECONOMY AND NEW SOCIETY
The power of imagination will become critical. In an information society, no thought, debate or dream is wasted – whether conceived in a tent camp, prison cell or the table football space of a startup company.
The main contradiction today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy: between old forms of society moulded around capitalism and new forms of society that prefigure what comes next.
APOCALYPSIS OR REINVENTION NOW
Millions of people are beginning to realise they have been sold a dream at odds with what reality can deliver. Their response is anger – and retreat towards national forms of capitalism that can only tear the world apart.
We need more than just a bunch of utopian dreams and small-scale horizontal projects. We need a project based on reason, evidence and testable designs, that cuts with the grain of history and is sustainable by the planet. And we need to get on with it.