After Technology Destroys Capitalism
I humbly suggest that he’s thinking much too small, and that the 21st century will be far too transformative to be contained within the worn and shabby walls of capitalism. I don’t think it’s possible for anyone to have traveled across as much of the developing world as I have without being convinced of the enormous benefits of technology-powered capitalism and/or capitalism-powered technology, which have made billions of lives around the globe immensely better over just the last few decades. What if today’s technology is beginning to finally make better alternatives possiblebut just as clean tech is being thwarted by the trillions of dollars previously sunk into fossil-fuel infrastructure, our collective investment in capitalism itself is forestalling superior post-capitalist alternatives? Replace “Ownership” with “Capitalism” up above – and I would argue the line is fine – and I submit you wind up with an awfully similar conclusion. Similarly: “We are beginning to witness a paradox at the heart of capitalism enables an emerging collaborative commons to flourish alongside the capitalist market,” argues Jeremy Rifkin in the New York Times. If and when we get there capitalism will be replaced with what, exactly? A centralized command economy? God, no. I’ve been arguing for some time now that the combination of new technology and old capitalism will soon drastically worsen inequality. Net human happiness should be vastly increased, not decreased, by this process – but capitalism doesn’t work that way. Even titans of capitalism and tech leaders increasingly agree. Now, thanks in large part to Piketty, capitalism itself has become suspect, too. “Capitalism simply isn’t workingthe gap between rich and poor threatens to destroy us,” laments The Guardian, which also notes that the last five years in the UK have been “The longest period of falling real incomes in two generations.” It’s fair to say that both technology and capitalism – which, remember, between them brought us much if not most of whatever progress we’ve made as a species over the last two centuries – are now being blamed in tandem for economic stagnation, inequality, and unfairness across the developing world. What happens in a world, or at least a nation, where most of the population lives semi-comfortably off a basic income, supplemented by occasional temporary gigs, thanks to the economic output of tomorrow’s technology; a small middle class works at the diminishing number of jobs which can’t be handled by technology; and a smaller-yet minority of the ultra-rich actually design the tech, and/or live off their inheritances a la Piketty? Call it a “low-scarcity” future, as opposed to the full-on Singularitarian “post-scarcity” future. If this is so, then Paul Graham’s tweet up above is true but doesn’t go far enough; capitalism itself will be viewed as a crude but useful hack – albeit one with a whole lot of nasty side effects – which ultimately paved the way to a more enlightened system. Because will any reputation economy reward the lords of capitalism? Somehow, today, with the occasional rare exception, that seems unlikely.
In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. Proponents of the concept of free market contrast it with a regulated market, in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and protect the economy. In scholarly debates, the concept of a free market is contrasted with the concept of a coordinated market in fields of study such as political economy, new institutional economics, economic sociology, and political science. Although free markets are commonly associated with capitalism within a market economy in contemporary usage and popular culture, free markets have also been advocated by free-market anarchists, market socialists, and some proponents of cooperatives and advocates of profit sharing. These proposals ranged from various forms of worker cooperatives operating in a free market economy, such as the Mutualist system proposed by Proudhon, to state-owned enterprises operating in unregulated and open markets. As explained above, for classical economists such as Adam Smith the term “Free market” does not necessarily refer to a market free from government interference, but rather free from all forms of economic privilege, monopolies, and artificial scarcities. In a free market, individuals and firms taking part in these transactions have the liberty to enter, leave and participate in the market as they so choose. Advocates of the free market contend that government intervention hampers economic growth by disrupting the natural allocation of resources according to supply and demand, while critics of the free market contend that government intervention is sometimes necessary to protect a country’s economy from better-developed and more influential economies, while providing the stability necessary for wise long-term investment. Among these assumptions are several which are impossible to fully achieve in a real market, such as complete information, interchangeable goods and services, and lack of market power. A free market does not require the existence of competition, however it does require a framework that allows new market entrants. These free market principles are what helped America transition to a free market economy. While its supporters argue that only a free market can create healthy competition and therefore more business and reasonable prices, opponents say that a free market in its purest form may result in the opposite. Critics of free market economics range from those who reject markets entirely in favour of a planned economy as advocated by various Marxists, to those who wish to see market failures regulated to various degrees or supplemented by government interventions. Furthermore only one known example of a true free market exists, and that is the Black Market. Democracy cannot survive an excessively free market; and containing the market is the task of politics.