Material World: Will technological innovation lead to a post-capitalist society?

That capitalism’s vast and ever-growing structural waste is a major practical impediment to the realisation of a post-scarcity society should be obvious. This is because of the extent to which it diverts human and material resources away from the goal of mitigating scarcity itself. But what of technology? Could the very thrust and momentum of technological innovation, in itself, somehow usher in a post-scarcity society, despite this impediment? Might we expect the impact of new technology on society that, capitalism notwithstanding, might yet transform our prospects and beckon a life of material comfort, security and ample leisure for all?

Yes, according to Jeremy Rifkin, author of a best-selling book, The Zero Marginal Cost Society, in which he wrote that the ‘emerging Internet of Things is speeding us to an era of nearly free goods and services, precipitating the meteoric rise of a global Collaborative Commons and the eclipse of capitalism’.

The core of Rifkin´s argument appears to be that thanks to technological innovation, prices are set to decline as the marginal costs of producing things – the cost of producing one extra or additional unit of the product in question – plummets to zero. A ‘Great Deflation’ in other words. Self-replicating machines, powered by solar energy and hooked up to an intelligent network called the Internet of Things will increasingly displace human labour and, in due course, overwhelm us with plenty. All this, in turn, will undermine the need for private property, along with an old- fashioned top-down hierarchical model of social organisation, while ushering in more horizontally organised forms of collaboration beyond the market: the so-called ‘sharing economy’.

Falling prices presuppose, or are made possible, by the declining marginal costs of production. This, for Rifkin, represents an inexorable trend that, by a process of extrapolation, will reach the inevitable endpoint characterised by the widespread availability of ‘nearly free goods and services’ when prices can presumably fall no further.

At this point capitalism will succumb to an existential crisis – a victim of its own remarkable success in having inadvertently laid the foundations of a ‘zero marginal-cost society’ (so called). This will signify, in effect, the extinction of ‘investor-based capitalism’ – the very essence of capitalism, as we know it, with its insatiable lust for ever greater financial returns – leaving behind merely some residual commercially based activities that would carry on alongside, and help to support, the sharing economy. A hybrid system perhaps, but essentially a post-capitalist system.

Could all this really happen? It is certainly a tantalising vision of the future and one that might be said to derive from an extrapolation of certain trends we already see around us. However, the problem with relying on extrapolation is that those trends we are talking about can sometimes turn out to be reversible.

Rifkin is focusing on the observable phenomenon whereby businesses seek to undercut each other pricewise through cost-cutting technological innovation, and arguing that further technological developments are supposedly ‘speeding us to an era of nearly free goods and services’. But how would this be possible? After all, if goods and services were to become so cheap one has to wonder how those businesses supplying them might secure a sufficient revenue to remain in business. Some of them sooner than others would go out of business. By doing so, they would stop producing. As a consequence, the supply of the goods in question would contract in relation to demand. Its price would begin to rise.

In focusing narrowly on the concept of marginal costs, Rifkin seems to have overlooked the wider concept of total production costs (including the wages bill) that businesses face and, not least, the transactional costs involved in the whole business of financing production – for instance, the repayment of bank loans or the payment of rent.

If there was any truth in his claim that we are steadily moving into an era of ‘nearly free goods and services’ produced by the ‘Internet of Things’, one has to wonder why, then, people are continuing to work comparatively long hours (or getting further and further into debt) to obtain the money they need to purchase all these (supposedly) soon-to-be free (or nearly free) goods and services in the first place. Not only are they still working long hours but the employment rate (defined as the percentage of population, aged 20 to 64, in work) in places like the (technologically advanced) European Union has actually increased slightly – from 66.8 percent in 2005 to 72.4 percent in 2020.

The problem with his argument, apart from its fundamentally faulty economics, is its crude, technologically determinist assumption that capitalism will somehow mechanically disappear, or wither away, of its own accord without any need for human or political intervention. Rifkin himself has apparently denied he is a technological determinist and has argued that he sees the role of technology as merely enabling. Maybe. But, even so, it is difficult to see how he can evade the charge of, at least, inadvertently endorsing technological determinism.

This is not to deny that the kinds of technologies Rifkin has in mind could indeed prove to be enormously beneficial to a post-capitalist society. But we have yet to arrive at such a society and we are still a long way off from achieving it. This is not a matter of us closing some imagined technological gap but rather, of opening minds to the possibility of achieving that society. It won’t happen otherwise. It is human volition (and understanding), not the technological potential to produce more, that is the missing ingredient today.


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