Words&Dirt

A hefty portion of humanity’s uniqueness can be traced back to future projection.  We constantly weave narratives that stretch moments and months and millennia ahead, even as we fumble to figure out what to do with today, each day.  Everyone needs some kind of intellectual framework to navigate this tricky tension, which is where futurists come in––they synthesize data, make observations, and construct arguments for why we should think one way or another about what’s to come.  Futurists should be judged not solely by the accuracy of their predictions, but also by their ability to identify the values and perspectives that constitute pragmatic advice for the present and hope for tomorrow.  By this standard, Jeremy Rifkin’s The Zero Marginal Cost Society is an example of futurism at its best.  Rifkin provides a thoughtful and bold vision of how the near future might play out, and highlights a plethora of ways people can get to work carving out a niche in this brave new world.

The idea of “zero marginal cost,” which Rifkin wields with subversive flare, originates from the traditional capitalist playbook.  Marginal cost is the cost of producing an additional unit of product beyond the initial investment required to produce a single unit.  The deep irony of capitalism, as Rifkin sees it, is that ruthless competition to reduce marginal cost (and therefore maximize profit) eventually leads to the invention of technologies that reduce marginal cost to near zero.  At this point, additional units of product become nearly free, and profits begin to dry up.  A simple example from recent history is the development of the music recording industry over the last few decades, which became far less profitable once tracks could be digitized and copied at near zero marginal cost.  Rifkin predicts that 3D printing, renewable energy, and other technologies will soon do the same for many of the physical objects that are currently provided by the traditional capitalist marketplace.  This will give rise to a new sharing economy platformed on a Collaborative Commons that will be dominated by collectively owned social networks rather than privately-owned capital.  Rifkin tips his hat to capitalism for getting us to the point where basic goods can be produced at near zero marginal cost, but claims it is now time to transition to a new economic paradigm.

The sharing economy’s enabling factor is the Internet of Things (IoT), which is comprised of a Communications Internet, an Energy Internet, and a Logistics Internet.  These decentralized, distributed networks will wirelessly link any electronic device to groups of sensors implanted throughout our natural environment and physical infrastructure.  These sensors will detect inefficiencies and instruct electronic devices to coordinate with each other to adapt their usage, maximizing energy output and reducing waste.  I don’t possess the technical expertise to critique this model, but if it works as Rifkin claims, it will drastically reduce the cost of living for anyone plugged in.  The long-term end game is that once initial investments in IoT infrastructure are made over the next few decades, people will be able to stop worrying about basic necessities and fully invest themselves in the Collaborative Commons––a multilayered system of peer-to-peer networks that foster social relationships, experiential richness, and human creativity.

Sound too good to be true?  I thought so too.  Making participation in capitalist markets optional for workers is an issue so close to my heart that my first impulse was to buy Rifkin’s vision wholesale.  Knowing this weakness in myself, I tried to critique his book as best I could.  Though I had dozens of unanswered questions along the way, I was ultimately satisfied with Rifkin’s determination to establish a set of values and tools for living more sustainably and cooperatively––what he calls the “biosphere lifestyle.”

The biosphere lifestyle can be summarized by two basic assertions: (1) every economic system generates its own justificatory (but not necessarily accurate) interpretation of reality and (2) the privatization of public assets is incompatible with a robust sharing economy and ecological vibrancy.  The history of economics, Rifkin argues, is rife with interpretations of reality that correspond with and seek to legitimize economic systems.  Monarchs and feudalists purported a universe in which social roles were fixed in a great chain of subservience, with God driving the bus and master/slave relations all the way down.  19th and 20th century capitalists flocked to skewed interpretations of Darwinism that posited a cosmos dominated by rational self-interest and the will to triumph over others in the race for scarce resources.  In recent decades, a new intellectual framework is emerging, one that emphasizes humanity’s eusocial nature and seeks a balance between competition and cooperation.  This paradigm shift is happening in tandem with the rise of the sharing economy as people seek ways to unplug from the zero-sum game of traditional markets in order to pursue work that generates social capital and products that can be shared directly in peer-to-peer networks (e.g. Etsy, Bandcamp, Airbnb, Uber).

This way of life is antithetical to privatization and overuse of finite natural resources for short term gain.  Although Rifkin does not foresee the end of capitalism or private property altogether, he contends that ownership of goods and services will become increasingly distributed and less important than access.  Instead of amassing private capital for exclusively personal use, individuals will participate in democratized, laterally distributed communities that will plug into the IoT infrastructure, forging myriad virtual links between local and global populations.  A hard battle must be fought to expand universal access to democratizing technologies and wrestle public resources from the hands of those who would (or already do) possess them.  To shape the new Collaborative Commons, we need to cut out the middlemen standing between producers and consumers by allowing people to play both roles––to be what Rifkin calls “prosumers.”  Social ranking systems will also be implemented to hold community members accountable and minimize freeloading.

While overwhelming in scale, the task of constructing the IoT infrastructure is actually a potential benefit.  This multi-decade project opens the way for millions of traditional wage jobs for workers who will update and install sensors in existing infrastructure, turn millions of buildings into micropower plants, and develop the foundational software for the Communications, Energy, and Logistics Internets.  This will be the final gasp of the purely capitalist economic model, and the first draft of the platform on which the sharing economy can flourish.  It isn’t a perfect solution to the current jobs crisis, but it’s a better response to chronic unemployment than any I’ve heard.  As the IoT infrastructure takes shape, workers will be increasingly empowered to step away from wage labor and plug into the Collaborative Commons.  It might take a generation or two, Rifkin admits, but eventually our descendents will be baffled that the value of an individual was ever measured primarily by his or her contribution to a capitalist marketplace.

Rifkin focuses more on the positive developments to come than on the details of existing problems, and most of his book could rightly be criticized as overly optimistic.  However, Rifkin doesn’t pull any punches when addressing two imminent and potentially catastrophic threats: climate change and cyberterrorism.  These “wild cards” could potentially destroy the sharing economy before it gets started.  They are real threats, and Rifkin in no way thinks the sharing economy is guaranteed if we don’t act soon to transition to renewable energies, democratize access to electricity, and decentralize distribution networks so they are less vulnerable to cyber attacks.

There are still many open questions about how this vision (or something similar) might come to be.  The two I want to focus on are: (1) Why emphasize energy more than food and water? and (2) How do we implement quality standards and public safety measures in the sharing economy?  Perhaps because it’s his area of expertise, Rifkin discusses energy issues far more than nutrition.  Though he certainly thinks nutrition is important, access to food and water seem less crucial to him than access to electricity and the Internet.  I wish he had included more information and offered suggestions for how the sharing economy can improve access to healthy food and clean water.  It’s too important of an issue to take a back seat here.

It’s also unclear how Rifkin expects a zero marginal cost society to regulate goods in the sharing economy.  I’m all for transitioning away from the vertically integrated corporate business model, but one of the historical benefits of that model has been the ability to set quality and safety standards for big industries.  Though corporations haven’t always complied or been held accountable for not following standards, it still seems easier to regulate a top-down business than to ensure that the variegated elements of a sharing economy don’t put out dangerous products.  Are reputation algorithms, user reviews, and social capital enough to keep independent producers honest, or should we just accept that one of the drawbacks of the sharing economy is that we will––at least in some cases––have less assurance of knowing exactly how products are made?  It’s also unclear how the proliferation of new currencies, such as Bitcoin and community-specific units of exchange, will facilitate this process or muddy the waters.  These issues beg the bigger question of exactly what role government should play in the zero marginal cost society, a topic on which Rifkin is strangely taciturn.

Rifkin is not a great writer, but he has written a terrific book, one that contains many useful frames for argument and action.  In a world brimming with experts who propound capitalism as humanity’s economic apotheosis, it’s refreshing and invigorating to encounter someone demanding a better way of organizing human commerce.  I’m not convinced things will play out exactly as Rifkin claims, but I doubt he is either.  This book is much more about the foundational values of the zero marginal cost society than the particular shape of that society. It’s about birthing a radically new way of understanding labor and production, one that prioritizes social bonds over impersonal market fluctuations.  It’s about creating a sustainable home for generations to come, one we can be proud of once we’re gone, and that will give our successors every chance to flourish.  And most importantly, it’s about rejecting ecological exploitation in favor of a symbiotic way of life that honors and conserves the complex web of living things and elements on Earth.

Rating: 9/10