Post-Capitalism: A Guide to Our Future
We are living in an unprecedented age of abundance. What could the world be like if we took advantage of it? Part 1.
This post is based on the lecture and book by Paul Mason.
The basis of economics is scarcity.
Capitalism works because of scarcity: When competition is fair, it gives rise to an accurate price system.
By the same token, you cannot suppress markets, such as through socialism or communism, in conditions of scarcity. You take away the motivating force behind the economy and squeeze it into black markets.
But information goods have brought us into an unprecedented age of abundance.
Information goods, or digital goods, are different. You and I, and millions of other people, can both consume the same digital song or article at the same time without degrading the quality of the experience for anyone. In economic terms, the goods are non-rival. So the cost should in time fall to zero. Information, as the hippie guru writer Stewart Brand said, “wants to be free.”
It is crucial to emphasize that we have never experienced this before in history. All physical goods are rival in some way.
These non-rival goods impact the physical economy as well. For example, it makes manufacturing way cheaper and more efficient since businesses can build digital models and run computer simulations.
The destruction of the price system is a beautiful opportunity. But it causes problems in the context of Neoliberalism.
Neoliberalism is a fancy word. Think of the liberal part as meaning it’s a free market philosophy- goods can flow wherever supply and demand takes them. More importantly when thinking about the effects, labor can flow freely across borders.
The effect of free-flowing labor in a system where the price system is deteriorating is that wages also get suppressed.
[Bit off more than I could chew. In progress…]
- Credit and debt. While we experience ‘consumer surplus’ in the short term because of falling prices, we also see rising prices in key areas like real estate, education, and health care. So the traditional way to deal with this is through credit. But credit cannot rise forever against a stagnant or falling income base.*
- Intellectual property protection - tech companies try to put up walled gardens. This won’t work in the long term (again, information wants to be free) and is not real capitalism anyway.
Aside from the moral arguments against creating a society addicted to credit and vastly unequal, these solutions are pernicious because we’re inhibiting innovation and preventing the third industrial revolution. And this industrial revolution could be a super good one.
The next industrial revolution
If we think about it and are strategic, we can make a happier, more prosperous, more equitable society. More to come on possible solutions later. For now, it’s important to be aware of the new age we’re entering and to start fantasizing. We are extremely lucky to be alive right now.
