Three Scenarios for the Future of Capitalism
We currently see many articles about the the evils of capitalism, the end of capitalism and possible post-capitalism futures. I was invited to talk at the One Planet Anti-Conference a couple of weeks ago on the topic ‘whether or not capitalism can be transformed to “realize” that the earth is capital’. I wasn’t well, so couldn’t do the talk, but thought I’d write down my thoughts here anyway.
As a futurist I often think in scenarios, so with this question in mind, I tried to explore three of these.
1. Capitalism will eat itself
This is a scenario which probably has been best described by Jeremy Rifkin. Capitalism will eat itself and self-destruct as exponential technology pushes marginal cost towards zero. Rifkin says:
No one in their wildest imagination, including economists and business people, ever imagined the possibility of a technology revolution so extreme in its productivity that it could actually reduce marginal costs to near zero, making products nearly free, abundant and absolutely no longer subject to market forces.
As we know, capitalists are some of the most excited cheerleaders of exponential technology, and if Rifkin is right this will lead to self-destruction of capitalism.
2. Capitalism will be replaced by something better
This scenario is popular in leftist and progressive press, which has long anticipated and pushed for a new system beyond capitalism. Most of them have now realised that Marxism is inflexible and won’t work, but that there are other possible futures. Some look at hybrids such as conscious or responsible capitalism (see my thoughts on those here), which still keep elements of capitalism, and some look at completely new post-capitalist systems. The most interesting of the latter is the peer-to-peer movement, which is working on a so-called commons transition, with “policy proposals and ideas to implement a Social Knowledge Economy“:
“…an ethical economy, a non-capitalist marketplace that re-introduces reciprocity and co-operation in the market’s functioning, while co-creating commons and creating livelihoods for the commoners. This type of economy and market in which co-operation, mutuality, and the common good define the characteristics of a new kind of political economy, point the way to a new state form, which we have called the Partner State.”
This economic system is already found in some clusters around the world. In Greece, Spain, some American cities etc. where collapsing economies have spurred local peer economies, community exchanges and complementary currencies. The open-source software and DIY hardware movements have always had a peer-to-peer philosophy. And the internet has enabled new global links between these clusters, which now begin to form networked neo-tribes (intentional communities, hacker & art collectives, coworking spaces, grass-roots movements, eco villages, entrepreneurial hubs, etc).
These post-capitalist clusters of people with local-centric AND global-centric values might with cryptocurrencies and local exchange mechanisms, create true peer-to-peer economies, which are more relevant than capitalism in our modern networked societies.
3. Capitalism will be around forever
We often forget that economic systems are fluid, organic and not fixed in time. No one decides that we suddenly shall have a new dominant global economic system. Sure, they do in China and other totalitarian places, but most systems have historically emerged as various factors have allowed this in a few clusters. And then found relevant in other regions so have migrated there.
I’m not that well-read on the history of capitalism but according to Wikipedia, “Early Islam promulgated capitalist economic policies, which migrated to Europe through trade partners from cities such as Venice.” Industrial capitalism then emerged in England with the industrial revolution, and later global capitalism became the dominant global system, as various countries adopted the gold standard and started trading in the globalized world.
But in most of the world, other economic systems still prevailed. In fact, earlier systems such as slavery and feudalism are still used in many places in the world. Once, systems and practices that were accepted for us in the developed world are now seen as despicable. Values and wordviews shape our economic systems. And vice versa.
So in the same way that bartering, slavery and feudalism are still used in the world (there are between 12 and 30 million slaves working away in the world as I write this), capitalism will likely also be around for a long time.
What interests me with these three scenarios is that they all pretty likely will happen. They are not mutually exclusive of one another, and we can choose to step into any of them as individuals, organisations or societies.
So how would you approach these scenarios?
How would you act if these stories of the future would become true?