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Medium - Post-Capitalism, Rise of The Collaborative Commons
Medium - Post-Capitalism, Rise of The Collaborative Commons
Medium - Post-Capitalism, Rise of The Collaborative Commons
medium.com/basic-income/post-capitalism-rise-of-the-collaborative-commons-62b0160a7048
cjdew
Mar 18, 2015
End of an Era
The newest technologies of today are now poised to push marginal cost to
near zero across every major sector. As renewable energy harvesting
technologies become more accessible and efficient, individual homes and
buildings will increasingly produce their own renewable energy and have the
ability to share it freely across a distributed digital smart-grid. Alongside the
Energy Internet, a decentralized Internet of Things will connect our smart-
products and optimize efficiencies, both within the home and across the
economy, in real-time. Education is becoming freely accessible through
open online learning environments, such as MOOCs — Massive Open
Online Courses. Digital cryptocurrencies, such as Bitcoin, are enabling
peer-to-peer finance options for a decentralized age, where instant
transactions of any denomination to anywhere on the planet can be made
with next to no transaction fee and without the involvement of a third-party
(e.g., banks). Advanced robotics, data analysis, and artificial intelligence will
increasingly take the place of humans across all sectors of the workforce.
The automation of wage labor will lead to vast efficiency increases in the
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economy and ultimately liberate humanity from pecuniary tasks for the first
time. 3D printing at scale promises to dramatically increase economic
productivity and sustainability, using one-tenth of the material of traditional
manufacturing, while eliminating the need for long-range shipping and
logistics through the exchange of digital schematics over open networks. As
these technologies continue their exponential rate of growth, an increasing
number of products and services will be produced and exchanged across
an unrestricted and free-flowing lateral Commons at near zero marginal
cost.
Economists such as Keynes have long been aware that the most optimally
efficient state of capitalism is at near zero marginal cost. Through the
inherent competitive drive for lower costs and increased productivity and
efficiencies, near zero marginal cost is an inevitability under capitalist
defined principles. When the cost of producing an additional good or service
is nearly zero, products become available at next to no cost, profits
evaporate and the exchange of property in markets shuts down. Though
this state represents the ultimate triumph of capitalism, it also marks its
obsolescence and passage from the world stage.
As goods and services become more freely available, the sun will begin to
set on the capitalist era. Capitalism is designed to manage resources within
a closed system of scarcity, and it is thoroughly ineffective at organizing the
economic life of a society in which access is valued over ownership,
transparency over privacy, and collaborative co-creation over competition.
The foundational principals and philosophies upon which the capitalist
system is based — private property, wage labor, profit-driven competition
and debt-based finance — are no longer relevant under such conditions.
Empowered and driven by recent technological innovations, a new
economic system is now emerging that is significantly better suited for
organizing a society characterized by sustainable abundance rather than
scarcity.
Technological Disruption
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“During the period from 1900 to 1980 in the United States, aggregate energy
efficiency…steadily rose along with the development of the nation’s
infrastructure, from 2.48 percent to 12.3 percent…leveling off in the late
1990s at around 13 percent with the completion of the Second Industrial
Revolution infrastructure. Despite a significant increase in efficiency, which
gave the United States extraordinary productivity and growth, nearly 87
percent of the energy used in the Second Industrial Revolution was wasted
during transmission.”[5]
Further efficiency gains under the current fossil fuel-based infrastructure are
limited, since the technologies designed for this system, such as the
internal-combustion engine and the centralized electricity grid, have few
productivity gains left to exploit. However, studies indicate that, through a
transition to an IoT infrastructure, “it is conceivable to increase aggregate
energy efficiency to 40 percent or more in the next 40 years, amounting to a
dramatic increase in productivity beyond what the economy experienced in
the twentieth century.”[6]
Smart contracts are computer programs that can automatically execute the
terms of a contract once the agreed upon conditions are fulfilled. These
could include simple transactions such as an online shopping purchase, or
executing the terms of a will. Moreover, as smart devices and products
continue to proliferate across an Internet of Things infrastructure they will
increasingly integrate and register with the Blockchain and be able to be
bought, sold and operated in line with the terms of smart contracts. For
example, a car could be programmed to only operate for its rightful owner,
or a house could be rented out whose doors will unlock via the tenant’s
phone for a pre-determined length of time.[17]
The applications of the Blockchain are far-reaching, and largely beyond the
scope of this article. The final application that will be mentioned here, that
may be useful in a Collaborative Commons, is the potential to decentralize
governance. Over the Blockchain, it is possible to conduct cryptographically
secure and anonymous digital voting across the globe, where a unique
crypto-token could be issued to the pool of voters that could then be used to
cast a digital vote. Given the simplicity of conducting a crypto-vote, it is
possible that democracies could become more secure, liquid, and less
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centralized, such that individuals would be able to vote directly on major
issues themselves, rather than having to rely on elected representatives
who are often under the influence of partisan politics, corporate lobbyists
and politically motivated short-sightedness.
The complete automation of the workforce has the ability to free humanity
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from wage labor and for the first time in history allow individuals to pursue
their true passions, free of any sort of debt or servitude. There is no task
that could not ultimately be carried out by machines or managed by
sophisticated artificial intelligence. Computers will eventually be able to
design their own programs, improve and repair their own circuitry, and
update information about the social needs of humanity. Autonomous
machines and self-erecting structures could excavate canals, dig tunnels,
construct bridges and dams, and efficiently build advanced infrastructure on
a global scale. Human participation would consist of selecting the desired
ends.
Over the coming decades, wage labor and the means of production will be
increasingly handed off to intelligent technologies. Simultaneously,
however, the build-out of an IoT infrastructure (which will also contribute to
one final surge of wage labor) will usher in a new organizational model,
characterized by distinct values that can already be seen emerging.
Throughout history, major economic transitions have come about with the
development of new energy regimes paralleled by new communication
mediums to manage such systems. In the years ahead, the internet will
increasingly be used to manage a distributed renewable energy regime and
automated infrastructure, within a decentralized global Commons.
However, a recent issue has been with the flow of big data that is
increasingly used to recognize patterns, increase efficiencies and generally
solve societal problems. Progressively this data stream is being concealed,
restricted and privately controlled by a minority of centralized corporations
through traditional intellectual property rights and patents. Big data is a
collective information source that is contributed to by millions of individuals
and should be open and accessible for the benefit of all. “Just as
information wants to be free, Big Data wants to be distributed.”[30]
The term Commons describes a form of governance, and defines the way in
which humans manage the Earth’s resources and make decisions.
Specifically, the Earth’s resources are held in common and their distribution
is collectively managed.
Several rules and standards have been formally ratified as the governance
model for cooperatives by the ICA, paraphrased below, to “epitomize the
vision and practice of Commons management:”[35]
Cooperatives already play a large role across many economic sectors, from
agriculture, to banking and finance, to retail and health care. More than “1
billion people are currently members of cooperatives…[while] more than
100 million people are employed by cooperatives, or 20 percent more
employees than in multinational companies.”[36] In the US, cooperatives
account for “more than $3 trillion in assets, over $500 billion in annual
revenue, $25 billion in wages and benefits, and nearly 2 million jobs.”[37] It
is the coupling of the cooperative model of Commons management with an
IoT infrastructure, however, that will enable more efficient production and
equitable distribution than ever before.
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The cooperative management model offers a means to collectively manage
the common resources produced in a highly efficient Collaborative
economy, both equitably and sustainably. An Internet of Things
infrastructure empowers highly efficient prosumers and distributed
manufacturing models. However, these distributed producers must join
together in sector-specific cooperatives to fully optimize the lateral power
behind them, and to distribute resources in the most equitable and
sustainable manner.
DAOs largely fit a cooperative framework, but take cooperatives one step
further in terms of decentralization, democratization, transparency and
collective management. Ultimately, DAOs may prove to be an integral
component of managing cooperatives on a decentralized Collaborative
Commons.
The build-out of an IoT infrastructure will be carried out and phased in over
the next several decades. According to one study, carried out by the Electric
Power Research Institute (EPRI), a US based non-profit energy think tank,
the cost of phasing in a national Energy Internet over 20 years is estimated
between $17 to $24 billion per year, or about $476 billion in total[43] —
roughly equivalent to the $470 billion annual revenue of Royal Dutch Shell
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for 2011.[44] However, the EPRI estimate is a no-frills approach to the
smart-grid, consisting of smart-meters and power line improvements. When
energy storage and additional hardware components are taken into
account, along with the intelligent communication management
infrastructure to coordinate the flow, storage and exchange of renewable
energy by millions of prosumers — including IT management and big data
feedback nodes — total cost for an Energy Internet is estimated at $1.2
trillion.[45]
According to the initial EPRI study, the estimated energy savings for
consumers that would result from the installation of an Energy Internet is $2
trillion.[46] This savings alone is justification for the up-front infrastructure
costs, however, this figure does not begin to account for the aggregate
energy efficiency gains that result from an intelligent IoT infrastructure — a
rise from 14 percent efficiency to 40 percent, as previously discussed — and
accompanying productivity gains.
Energy and utility companies are anxious to profit off of the smart-grid and
have, in the past, sought to force a centralized and proprietary architecture
of control onto the infrastructure. The European Union has already taken
steps to require these companies to unbundle their power generation from
electricity transmission, effectively allowing small energy producers to
connect to the main grid and ensure the open nature of the Energy Internet.
[48] Increasingly, energy corporations seem to be acquiescing to the new
energy reality and are changing their business models as a greater number
of prosumers are encouraged to produce their own green energy by
governments. As more people begin to generate their own renewable
energy, the future income of these companies will “increasingly rely on
managing their customers’ energy use, reducing their energy needs,
increasing their energy efficiencies and productivity, and sharing a
percentage of the increased productivity and savings.”[49]
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Another important platform in supporting many of the new startups involved
in the IoT build-out is crowdfunding. Instead of small startup businesses
having to seek out and pitch ideas to venture capitalist investors, who would
usually assume some percentage of ownership over the company, startups
can now post proposals online and collect small donations from thousands
of individual donors that want to support the project. Crowdfunding donors
emphasize that it is not so much about the money as it is about “being
intimately involved with helping others pursue their dreams and feel that
their small contribution…really counts in moving the project forward.”[50]
Online social lending and crowdfunding are expected to play an important
role in establishing millions of renewable micropower installations as they
become more accessible and demand begins to surge.
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“the harnessing of near zero marginal cost communications to manage near
zero marginal cost renewable energy gives society the critical operating
platform to build out the Internet of Things infrastructure and change the
economic paradigm.”[54]
Companies such as Uber and Airbnb will attempt to bridge the gap between
the two economies and take advantage of both. However, as truly
decentralized peer-to-peer networks begin to take over at near zero
marginal cost these hybrid companies will not last. Hybrid companies like
Uber, Airbnb and YouTube, while facilitating lateral networks of exchange,
continue to operate around a centralized third-party profit making company.
Truly decentralized networks of exchange on the Commons will allow for
direct peer-to-peer transactions without the need for third-party intermediary
trust or involvement.
Sustainable Abundance
When the cost of producing goods and services shrinks to near zero the
entire operating rationale of capitalism becomes meaningless. Capitalist
markets are based around scarcity and dependency, such that when
resources are scarce they have exchange value and can be priced beyond
what it takes to bring them to market. When marginal costs of production
approach zero “it means that scarcity has been replaced by abundance…
[and] the capitalist system loses its hold over scarcity and the ability to profit
from another’s dependency.”[58] When scarcity is replaced by the
abundance of nearly free goods and services, “products have use and
share value but no longer have exchange value…because everyone can
secure much of what they need without having to pay for it.”[59] Economies
of abundance are already beginning to emerge. In the digital media space,
for example, much of this content no longer has significant exchange value
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but plenty of use and share value across distributed networks.
“The relative steady state in which the use of resources to sustain the human
population does not exceed the ability of nature to recycle the waste and
replenish the stock.”[60]
This can then be compared with the Earth’s biocapacity, that is:
“In 1961 our species’ [ecological] footprint was approximately half of the
planet’s biocapacity…By 2008, the ecological footprint of 6.7 billion human
beings alive at the time was equivalent to 18.2 billion global hectares…on a
planet with only 12 billion global hectares of biocapacity available…[meaning
that] we were consuming the Earth’s biocapacity faster than it could be
recycled and replenished. The United States alone, with only 4 percent of the
world’s population, was using 21 percent of the Earth’s available
biocapacity.”[63]
Studies indicate that the millennial generation is the “most empathic of any
generation in history…less interested in keeping up with materialistic trends
and less invested in obsessive consumerism as a way of life…the focus on
helping others is what millennials are responding to.”[64] These findings
coincide with the sharp expansion of a collaborative sharing economy,
where access and use value are favored over ownership, exchange value
and status. In addition to being less materialistic, millennials are also far
more committed to environmental sustainability and stewardship. A 2009
survey conducted by the Center for American Progress found that “75
percent of the Millennial Generation favors a shift out of fossil fuels and into
renewable energies — surpassing all the other adult generations.”[65]
Conclusion
The foundations of this economy will rest upon the principles of democracy,
equality, diversity, transparency, universal access and sustainability.
Further Reading
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References
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http://www.footprintnetwork.org/images/uploads/NFA_2011_Edition.pdf
(Accessed March 16, 2015).[64] Rifkin, Jeremy. 2014. The Zero Marginal
Cost Society: The Internet of Things, The Collaborative Commons, And The
Eclipse of Capitalism, New York: Palgrave Macmillan, p.282.[65] Madland,
David and R. Teixeira. 2009. New Progressive America: The Millennial
Generation, Center for American Progress.
https://www.americanprogress.org/issues/progressive-
movement/report/2009/05/13/6133/new-progressive-america-the-millennial-
generation/ (Accessed March 16, 2015).[66] Rifkin, Jeremy. 2014. The Zero
Marginal Cost Society: The Internet of Things, The Collaborative Commons,
And The Eclipse of Capitalism, New York: Palgrave Macmillan, p.284.[67]
Ibid, 285.[68] Ibid.[69] Ibid.[70] Ibid.
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