The Zero Marginal Cost Society – Jeremy Rifkin

We are just beginning to suspect bare outlines of the new economic system entering the world stage. This is the first new economic system to emerge since the rise of capitalism and its counterpart to socialism in the early 19th century. It is a significant historical event. It has long-term consequences for each of us, our children and our grandchildren. This new economic system is about mutual cooperation. And what triggers this shift towards a new economic paradigm, the economic system of people-to-people cooperation, There is something called zero marginal cost. Marginal costs, costs of producing another product and service after your costs are covered. The prospect of a technological revolution, so extreme in its productivity, that it can reduce these marginal costs in the value chain to almost zero making goods and services essentially unsaleable. Abundance almost free and outside the market economy. Then this phenomenon of zero marginal costs invaded the entire information technology industry. Millions of consumers have become professional users and began to manufacture their own information products.

If you look at the newspaper, publishing and recording industries, they never returned from zero marginal cost. Our economists thought there was a virtual obstacle. And so in virtual worlds, more and more goods in the information industry are approaching zero marginal costs, which will never cross the "firewall" of the physical world of brick and mortar goods and services. No longer. What is happening now is that the Internet is now spreading to the "Internet of Things" as a medium. The physical internet that allows us to move from the world of bits to the world of atoms. And if we have these three internets embedded in one system – the communication internet, which is constantly interacting with the energy internet and internet transport and logistics on one platform – This "Internet of Things" allows us to move closer to zero marginal costs from information goods to physical goods.

IBM says we will be on 30 billion sensors by 2020 and a recent estimation study, several months old, says by 2030 we will have 100 trillion sensors connecting everything with everyone in one global neural network. When we moved from the Internet to the "Internet of Things" and move from bits to atoms, we begin to see a whole new economic model that can get us close to zero marginal costs in the production and distribution of physical energy and physical products. Each of the millions of professional users will be able to increase their productivity, dramatically reduce marginal costs and to produce, consume and share their own physical energy and products among themselves, just like we do now with information products. The big card in the game is food, water and climate change. Because if we cannot tackle climate change and continue on this path, if we cannot produce food and do not have reliable access to water, everything I tell you is pointless.

This new system is already being applied in Europe. Let's take energy. The moment you install a solar panel on your building or a wind turbine, even before you pay the fixed costs – and that's usually 3 to 8 years, which is not a long time. Immediately, however, your marginal cost is almost zero, because the sun on your roof is free. The wind leaning against the side of your house is free. Geothermal heat coming from under the ground is free. Your garbage converted in the bioconverter into energy in your kitchen, it's all free. And millions of small players have come together in communities small and medium-sized homeowners. They produce a new kind of electricity. The "Internet of Things" is designed to be distributable, collaborative, user-driven and has been in line with a wide range of economies.

Consider 3D printed products. We now have several hundred thousand hobbyists, thousands of small and medium-sized start-ups, which print their own 3D products. They enter their 3D printing operation, at least in Europe, into this new "Internet of Things", this third industrial revolution. You go online, you can download software – all for free as open source, then you can use it for your operating warehouse recycle plastics, paper, or even sand and gravel and dissolve them at a cost approaching zero. You power your 3D printer with green energy from your "Energy Internet", where it is produced at almost zero marginal cost. Then you offer your products on a global website with very low advertising costs, only with a small fee, low marginal costs. And here we are just starting to deploy the "Logistics Internet". You will be able to power your vehicle to send your 3D printed product to market its own "green" electricity from the "Energy Internet" and in a few years from now, electric vehicles will be printed as well. The first printed vehicle now exists in Canada.

It works in the sun. We will have driverless vehicles that can move within the entire system at will with almost zero marginal cost. This is a revolution. The question arises. If millions then hundreds of millions of people can start producing, consuming or sharing its own products in the field of information technology, energy and many of its manufactured goods with almost zero marginal costs, which is almost free and outside the exchange model of the capitalist market, what kind of new economic system must we imagine to organize the world, which I present here? They are non-profit social services.

What is happening now is non-profit social services, which is an ancient institution where we rely on non-profit educational institutions, medical services, day hospitals for our children, assisted housing for the elderly, environmental organizations, culture, sports, arts, and so on. If they were removed and we only had a marketplace, we wouldn't have much life on the planet. These services are ignored by economists, because it does not create financial capital. It creates social capital. But, it makes a big profit. What makes these services more important than ever in the past, is this "Internet of Things".

Because the "Internet of Things" is a technology platform for general use, which is designed to be a technological related soul of social services. The whole proposal is about distribution, cooperation, distributed horizontally not vertically and rewards cooperation across these lateral networks. Creates a sharing community. If millions and millions of people produce and share their own energy and 3D printed products and information products, will need less revenue, at zero marginal cost. Will they still need a job? If the market does not need them, because we can produce energy and products, in the advanced technology market, where do you get a job? In non-profit social services. Social services create social capital human beings with other people, creating communities – culture, sports, art, wellness, health, quality of life. These are much more important jobs. Creating "things" is not so intellectually demanding and motivating mind, such as trying to create a sense of human community, a sense of transcendence and a sense of meaning in the world. One last thought. We can get close to "free energy".

We are almost there, free goods and services, but we will not survive without food and water. And we don't know if we can feed people and provide water for them, if we have to relocate millions of people in the western United States within 30 years. So … climate change is an elephant in peace. What is important is to realize that the third industrial revolution, this "Internet of Things" allows us to quickly abandon fossil fuels. And to have millions of people starting to produce and share their own green energy. And this "Internet of Things", because its whole purpose is to increase efficiency by reducing marginal costs, means that it shows us how to use fewer resources more efficiently.

So we will not place a great burden on the planet we live on. We have young people here not only sharing information products and energy and products made by 3D printing, but we also share cars and bicycles, and now we share apartments and houses and clothes and tools and toys. So we have a generation that is beginning to believe that it's not about ownership, it's about access, and if more people share what they have, less must be produced. This has a negative impact on GDP, but it has a positive impact on the quality of life, and that is the measure of a good economy. It's not just technology. It is the democratization of the economy. And hopefully by 2050 you will be in the world, not 1% or 99%. It will be a common economy, a sustainable good quality of life, where no one is left behind. Is it a utopia? No. We need to change the human story. We need a new story for the human race in connection with technology. We must move from geopolitics to the biosphere of consciousness in one generation.

Everything we do has a close impact on some human being, some ecosystem, some other species on Earth. We have a young generation here that is beginning to see that we live in one indivisible community, the biosphere. So I'm full of cautious hope. And if we can significantly increase efficiency, reduce our marginal costs, which means we use fewer resources more efficiently and with less strain on the planet, we can be in a better world by the middle of the century.

You have to help, because that's the only way we have a chance to heal the planet and create a future for our children. "Translation: Jan Greguš; Timing and Correction: Petr Taubinger" "Start / End: 06.07.2015 / 14.07.2015; Update: 16.07.2015 14:30".

You May Also Like