The problem is that everybody is having strong opinions about capitalism without even considering that it is not a "thing" but a category based on its definition, and there are multiple definitions of it.
The anti-capitalist, Marxist definition largely rests on private property (somehow) meaning you own more stuff you work with. Other people don't own the stuff they need to work with, so they need to "sell out" and become your employees. A typically capitalist company for a Marxist would be one guy owning 100 taxicabs and hiring 100 (or rather 300, in 3 shifts) drivers. Here the drivers, not having money to buy their own taxi cabs, must rent themselves out as employees. This is partially exploitative. Often Marxists propose it is not coming from free-market outcomes, but often it is more like some folks rob people with violence e.g. rob natives of their land then hire them when they have no other way of making a living. Another important aspect of a Marxist theory is alienation. The way I understand it, if the driver owns his taxi cab, he uses his own value system to work. Sometimes he is driven by the profit motive. Sometimes he gives rides to friends for free....
You can 3D print plastic. You can't 3D print computer chips. There are economies of scale with creating computer chips. The same is true for creating batteries. Tesla builds it's gigafactory because the huge volume allows cheaper production.
If I look over the items in my flat no one that can be 3D printed by a makerbot springs out.
Owning a solar rooftop means owning capital that produces a return. It doesn't make that energy free. If energy costs would be near zero I would use much more energy. Having a market that sets prices on energy use prevents people from wasting it.
The question presupposes that capitalism is the only way we organize our society. That's far from the case.
Not every transaction of value happens the same way. When government tries to solve a problem it does it through huge bureaucratic hierarchies. If I ask a friend to help me move to another flat then I the default isn't monetary payment. When open source is distributed for free on the internet you have yet another framework for value exchange.
Our society mixes different systems of value transfer. Wikipedia doesn't work through market incentives and that's okay. It can assist alongside with Britannica. There's no need for either-or.
I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.
I think it's best to approach this by asking what capitalism is. I see it as a distributed computing resource allocation system.
That is:
Decision-making is decentralized. Each agent has private information and communicates with the market through 'prices.'
Actual decision-making / computing is going on; agents are choosing between alternatives, constructing portfolios, gathering information, and so on.
There are some scarce resources that could be used to satisfy multiple different desires, but there's not enough to satisfy all desires.
You can construct an alternative by flipping those descriptions. For example, rather than a decentralized system, you could have a centralized system. This is empirically worse off, because we don't have easily scalable centralized computing, and information transfer is hard. (If you've already got billions of biological computers running around, why not make use of them?)
A zero marginal cost society is one in which we can satisfy all desires, without ever having to face tradeoffs between those desires. While this could eventu...
when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system?
Goods that can be produced for zero marginal cost per copy but have a positive fixed/sunk cost (like software) pose a challenge for any economic system including capitalism because you need a way to pay for the fixed costs but you want to let anyone who gets any value from the good get it. But capitalism, I believe, offers to best hope in part because of capitalism's creativity. In the past advertising revenue was found to be ...
Disclaimer: If I'm wrong about something, I appreciate corrections, but please don't be an asshole about them. I know myself not to understand economics very well.
When something is as ubiquitous, as pervasive, as well-supported, as institutionally-backed as capitalism, you have to make significantly better arguments against its use than the mere fact that it has some obvious inefficiencies in some branch of it. Capitalism can wreak ruin among large swathes of the world, for all people care about. That still wouldn't stop them for doing their damnedest to p...
Capitalism is less truly an economic system and more truly an economic modeling language.
Natural fisheries versus farming provides an excellent illustration of this; if you followed the sames rules for "unregulated" natural fisheries (that is, anybody may catch any number of fish) in farming, whoever picked a vegetable would own it, and farming couldn't exist as it does today. But replace the fishery rules with the farming rules, and whether or not it is "capitalism" is determined wholly by the framing; if you charge for a limited numb...
In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.
Even if Rifkin was right about manufactured products and energy becoming ~free, that leaves about 70% of the US economy that remains not-free, i.e. the service sector. You can't 3D print a dentist or plumber.
In any case I greatly doubt that 3D printing will be cheaper than current manufacturing. A 3D printer is not a nanofactory, and won't be anytime so...
when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system?
Ask me that when I actually would be able to get my goods, energy, and communications for basically free.
I'm not holding my breath.
By the way, the traditional name for this sort of arrangement is "communism".
There will always be ways to lower the marginal cost of a product. Even if this cost is measured in atoms, people will be looking for ways to reduce that cost.
There will also be art for a very long time. When everyone has a practically infinite supply of goods at their disposal, they will still want to create things for status, and this will be instantly transferable around the world. The internet increased the supply of art even as it reduced the marginal cost while leaving fixed costs mostly untouched.
There will be limits to transportation. Right now, that theoretical limit is the speed of light. People may compete for the right to travel to a far off world or to reach new worlds faster.
The biggest issue I see with unregulated capitalism is its poor handling of the tragedy of the commons. (in the shape of global resources)
The situation isn't so that we first had a theory of capitalism and then went to implement it. Instead we started doing stuff and found that it had ideological baggage. Capitalism is the only option because it's the only fleshed out option because we suck at (rigousrously) imagining alternative economic possibilities.
I have found the theorethical foundations to be pretty weak (as far as theorethical sense of elegancy goes) but here the proof is in the pudding. The theorethical constucts links to real world behaviours are a lot more stronger than the intern...
I strongly suspect that the effectiveness of capitalism as a system of economic organization is proportional to how rational agents participating in it are. I expect that capitalism only optimizes against the general welfare when people in a capitalist society make decisions that go against their own long-term values. The more rational a capitalist society is, the more it begins to resemble an economist's paradise.
I've not read the Rifkin book, so it may have a response to the criticism I'm about to make of your rendition of the key idea.
"The margin" is a concept that is set in a temporal context. That is, the margin is about a decision being made. Historically, economists think primarily of the short term margin: changed to production that can occur without changes in capital (and so, prototypically only using variations in inputs such as labor, energy, and raw materials). This is where marginal cost can fall to zero.
But economists also recognize two furt...
It would be helpful to define terms first. Capitalism is the system of private ownership of scarce objects. People are scarce, land is scarce, resources are scarce. Even if energy becomes plentiful, the means of production of that energy will remain scarce (solar panels and other capital goods). Even if you can 3D print any object, the resources used as inputs are still scarce.
In short, scarcity will not go away, although it will continue to get significantly better, as more valuable and useful things can be produced with less (less labor, less energy, less resources, etc). Therefore private ownership and voluntary association, aka capitalism, will remain.
Disclaimer: If I'm wrong about something, I appreciate corrections, but please don't be an asshole about them. I know myself not to understand economics very well.
When something is as ubiquitous, as pervasive, as well-supported, as institutionally-backed as capitalism, you have to make significantly better arguments against its use than the mere fact that it has some obvious inefficiencies in some branch of it. Capitalism can wreak ruin among large swathes of the world, for all people care about. That still wouldn't stop them for doing their damnedest to preserve the system.
As someone who's been working for a while at coming up with economically sane alternatives to capitalism, I'll do my best to share my understanding of why, as it were, "it's complicated".
One, capitalism is what emerges when an economy can make proper use of currency, and the state allows people to trade without monopolizing all economic activity within its territory. Wherever it is found, money obeys certain laws and trends, which have been codified into a fairly rigorous science called economics. In other words, you'd have to move beyond money and trade for capitalist economics not to apply. This is non-trivial. Take my word for it. I've dedicated a lot of brainpower to the matter and I have yet to find a factor as motivating as money that you can introduce into an economic system. Socialist states have attempted to run money economies on non-capitalist principles and got fucked over by economics -- the same economic laws which they rejected. It is far easier to invent capitalistic workarounds for disruptive technologies than to redesign the economic system of a country or of a planet.
Two, capitalism does not exist in a vacuum. It's not intellectually self-contained. You cannot uproot explicitly capitalistic ideas from people's minds, in ignorance of the implicit ideas they were founded on, and expect them not to grow back. This goes as deep as people's understanding of the idea of property or the necessity of trade. Take property, for instance. You can get a feeling of the fluidity of the concept by looking at the debates around intellectual property. Is piracy theft? Yes or no? In ye olde days, to steal something meant to forcefully and illegitimately transfer ownership from someone to yourself, depriving the rightful owner of his/her wealth. Piracy of digital products, however, does not deprive anyone of anything; you can make as many copies of something as your storage space allows, without anyone getting poorer; you only deprive some people (the author, the distributors) of potential wealth. With intellectual property, the concept of property gets redefined so as to allow capitalism to continue as normally. You could also take a look at the extremes of the ideological spectrum to see how they differ in their understanding of property. On the right side, you have the libertarians who say "taxation is theft". They draw the borders around the idea of property so as to include their gross income, as decided by the market forces, and view the state's claim to a share of that as illegitimate. On the left side you have those who say "(private) property is theft". They feel (not kidding here) entitled, as a class, to everything that came out of the hands of wage-workers, a.k.a. the proletariat, a.k.a. people who do not own other means of production than their own capacity for labour. When they speak of the revolution of the proletariat and the expropriation of the wealth of the bourgeoisie, they feel like they're taking back what was rightfully theirs from the start.
Or take trade. One of the most stupid... eh, I mean, frequently asked questions I get when I suggest the idea of a moneyless economy is, "but doesn't that mean going back to barter? How would you convince people to work for nothing?". It's a struggle to get people to simultaneously keep in their minds the ideas of working for nothing and of paying for nothing, and why, when taken together, they don't lead to the sort of disaster that they would if they were considered separately. With modern people, there's simply a trade-shaped hole in their minds. It's how they were raised to view an equitable acquisition of something -- as an exchange between two things of equal value.
These conceptualizations of the economic side of life are fundamental. They cannot be changed in a population within two or three generations, and they meaningfully impact the economic behaviour of people.
Three, it's quite the mistake for folks to focus so much on ordinary vanilla goods like food or water or various widgets, and to neglect the sorts of products that barely ever appear in non-capitalist economies -- the edge cases that prove the real challenges. You could be completely primitive and still not worry about the availability of food or clothing or shelter. This therefore has no important implications for capitalism. Consider instead other classes of goods or services. Benefiting from the time and skills of a good surgeon. Luxury goods. (Have you been around upper class people? It's one of those rare circles where the impact of prices over desirability deviates from ordinary intuitions -- goods get more desirable as they get expensive.) Exceedingly good service. Mercenary work. (It used to be a thing, you know.) The value of a good engineer. Basically everything that requires going that extra mile. There's no motivator quite like profit.
Four, people, and the powerful sort in particular, happen to very much like the status quo. For all the talk about eradicating poverty and income inequality, there's something that some people want, that you cannot get in a relatively egalitarian society: bargaining power. You cannot get a child who isn't starving to work in a sweatshop. You cannot have so much leverage against someone who can defend himself from your attacks. Without slaves, there are no masters. There are less cruel ways to talk about what I mean, as well: money is enmeshed in modern government, and states (whose income is overwhelmingly extractionary) demand for taxes to be paid in money. (After all, it would be inefficient for a government to demand payment in physical goods or in labour, for much the same reason as barter is inefficient.) Libertarians love to emphasize the antagonism between the government and the market, but in truth they're deeply interconnected, more so than they have opposing interests. The only category of people that do not directly have a vested interest in the preservation of capitalism comprises poor and powerless people, and even they may get used as cannon fodder if capitalism, when it eventually goes down, goes down in flames. (So they're indirectly interested in the general stability of the regime.)
Long story short, no, capitalism and the profit motive are not going anywhere, and no disruptive technology is going to change that. It doesn't matter how cheap basic goods become, or how easy everything is thanks to automation. If the maintenance of the system requires that producers tap into the endless bag of bullshit needs and jobs in order for us to still have something we call "value", then so be it. If you look at technology as some kind of way out of capitalism, ask yourself who produced the technology, and what their revenue is.
everything that requires going that extra mile. There's no motivator quite like profit.
Yes, this is the question I would want to have answered first, when speaking about a hypothetical non-capitalist economy. Imagine that there is a situation where...
Note: I'm terrible at making up titles, and I think that the one I gave may give the wrong impression. If anyone has a suggestion on what I should change it to, it would be much appreciated.
As I've been reading articles on less wrong, it seems to me that there are hints of an underlying belief which states that not only is capitalism a good economic paradigm, it shall remain so. Now, I don't mean to say anything like 'Capitalism is Evil!' I think that capitalism can, and has, done a lot of good for humanity.
However, I don't think that capitalism will be the best economic paradigm going into the future. I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.
I recently changed my views as a result of a book someone recommended to me 'The zero marginal cost society' by Jeremy Rifkin. In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.
The author claims that these three things will eventually bring their respective sectors marginal costs to zero. This is significant because of a 'contradiction at the heart of capitalism' (I'm not sure how to phrase this, so excuse me if I butcher it): competition is at the heart of capitalism, with companies constantly undercutting each other as a result of new technologies. These technological improvement allow a company to produce goods/services at a more attractive price whilst retaining a reasonable profit margin. As a result, we get better and better at producing things, and it lets us produce goods at ever decreasing costs. But what happens when the costs of producing something hit rock bottom? That is, they can go no lower.
3D printing presents a situation like this for a huge amount of industries, as all you really need to do is get some designs, plug in some feedstock and have a power source ready. The internet allows people to share their designs for almost zero cost, and renewable energies are on the rise, presenting the avenue of virtually free power. All that's left is the feedstock, and the cost of this is due to the difficulty of producing it. Once we have better robotics, you won't need anyone to mine/cultivate anything, and the whole thing becomes basically free.
And when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system? Of course, the arguments presented in the book are much more comprehensive, and it details an alternative economic paradigm called the Commons. I'm just paraphrasing here.
Since my knowledge of economics is woefully inadequate, I was wondering if I've made some ridiculous blunder which everyone knows about on this site. Is there some fundamental reason why Jeremy Rifkin's is a crackpot and I'm a fool for listening to him? Or is it more subtle than that? I ask because I felt the arguments in the book pretty compelling, and I want some opinions from people who are much better suited to critiquing this sort of thing than I.
Here is a link to the download page for the essay titled 'The comedy of the Commons' which provides some of the arguments which convinced me:
http://digitalcommons.law.yale.edu/fss_papers/1828/
A lecture about the Commons itself:
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/ostrom_lecture.pdf
And a paper (?) about governing the commons:
http://www.kuhlen.name/MATERIALIEN/eDok/governing_the_commons1.pdf
And here is a link to the author's page, along with some links to articles about the book:
http://www.thezeromarginalcostsociety.com/pages/Milestones.cfm
http://www.thezeromarginalcostsociety.com/pages/Press--Articles.cfm
An article displaying some of the sheer potential of 3D printers, and how it has the potential to change society in a major way:
http://singularityhub.com/2012/08/22/3d-printers-may-someday-construct-homes-in-less-than-a-day/
Edit: Drat! I forgot about the stupid questions thread. Should I delete this and repost it there? I mean, I hope to discuss this topic with others, so it seems suitable for the DISCUSSION board, but it may also be very stupid. Advice would be appreciated.