Jeremy Rifkin, author of The Zero Marginal Cost Society, was a guest on Radio 4's Start the Week on Monday. One of the other guests was a former financial services analyst, the Conservative MP, Kwasi Kwarteng. There's an idea that's been going around in my head ever since, sparked not by what was being directly discussed, but by the juxtaposition of Rifkin's thesis and Kwarteng's former career.
As simplified outrageously by me, Rifkin's big idea is that, extrapolating from current trends, capitalism as we know it will innovate itself out of existence by mid-century, with new technologies driving down the cost of producing useful stuff down to near zero so effectively that the possibility of making a profit will practically evaporate and the global megacorps will die out. With distributed production of everything, the categories of consumer and producer will disappear and everybody will be a 'prosumer', swapping the plans for useful 3D-printed widgets, being a social-media-enabled news producer/consumer and producing/consuming energy for/from distributed power grids based on household or neighbourhood renewable energy generating nodes.
It's not a completely convincing picture - I wonder, for example, how the market for that most basic commodity, food, will work in Rifkin's future and some of Rifkin's ideas have more than a hint of Thomas Friedman-esque blue-skies wacky (I'm sure that both thinkers independently came up with the idea that in the future, we'll all partly support ourselves by renting out the spare space in our homes - good luck with that, if you live in one of the UK's overpriced shoe boxes).
But, even with some major qualifications, it's clear that producing without profiting is a real thing, as the newspaper and music industries are already discovering to their cost, and emerging technologies promise a lot more of it in the future.
On the other hand, we have Kwasi Kwarteng's multi-billion dollar world of high finance, neatly summed up in the title of a recent book as Profiting Without Producing.
It's not the technology alone that promises interesting times ahead, but the fact that it throws the social uselessness of some of humanity's most profitable activities into sharp relief. If the profitability of producing useful stuff tends to stagnate and decline, won't people at some point start to question why astronomical profits only seem to come from activities like currency speculation, high-frequency trading, mis-selling opaque financial products that turn out to be worse than useless, organising risky, debt-fuelled mergers and acquisitions, devising obscure and complex financial instruments to skim the maximum amount of cash from real-world transactions and being bailed out by hostage governments?
If the profitability of the useful continues to decline, in tandem with the growing profitability of the useless, it will get harder and harder to justify the existing order as a just mechanism for differentially rewarding members of society according to their contributions, or to distinguish our version of capitalism from a neo-feudal system, with ordinary people who do all the necessary work finding themselves beholden, for some obscure reason, to an overclass who exist only to extract rents by virtue of owning capital, just as the old landed gentry extracted rents from their estates. Expect some moral gymnastics and far-fetched justifications of the status quo - we've had 'em before:
The rich man in his castle,
The poor man at his gate,
God made them high and lowly,
And ordered their estate.
When the penny drops, will the financial aristocracy give up their power without a fight? That's where the promise of 'interesting times' comes in...
As simplified outrageously by me, Rifkin's big idea is that, extrapolating from current trends, capitalism as we know it will innovate itself out of existence by mid-century, with new technologies driving down the cost of producing useful stuff down to near zero so effectively that the possibility of making a profit will practically evaporate and the global megacorps will die out. With distributed production of everything, the categories of consumer and producer will disappear and everybody will be a 'prosumer', swapping the plans for useful 3D-printed widgets, being a social-media-enabled news producer/consumer and producing/consuming energy for/from distributed power grids based on household or neighbourhood renewable energy generating nodes.
It's not a completely convincing picture - I wonder, for example, how the market for that most basic commodity, food, will work in Rifkin's future and some of Rifkin's ideas have more than a hint of Thomas Friedman-esque blue-skies wacky (I'm sure that both thinkers independently came up with the idea that in the future, we'll all partly support ourselves by renting out the spare space in our homes - good luck with that, if you live in one of the UK's overpriced shoe boxes).
But, even with some major qualifications, it's clear that producing without profiting is a real thing, as the newspaper and music industries are already discovering to their cost, and emerging technologies promise a lot more of it in the future.
On the other hand, we have Kwasi Kwarteng's multi-billion dollar world of high finance, neatly summed up in the title of a recent book as Profiting Without Producing.
It's not the technology alone that promises interesting times ahead, but the fact that it throws the social uselessness of some of humanity's most profitable activities into sharp relief. If the profitability of producing useful stuff tends to stagnate and decline, won't people at some point start to question why astronomical profits only seem to come from activities like currency speculation, high-frequency trading, mis-selling opaque financial products that turn out to be worse than useless, organising risky, debt-fuelled mergers and acquisitions, devising obscure and complex financial instruments to skim the maximum amount of cash from real-world transactions and being bailed out by hostage governments?
If the profitability of the useful continues to decline, in tandem with the growing profitability of the useless, it will get harder and harder to justify the existing order as a just mechanism for differentially rewarding members of society according to their contributions, or to distinguish our version of capitalism from a neo-feudal system, with ordinary people who do all the necessary work finding themselves beholden, for some obscure reason, to an overclass who exist only to extract rents by virtue of owning capital, just as the old landed gentry extracted rents from their estates. Expect some moral gymnastics and far-fetched justifications of the status quo - we've had 'em before:
The rich man in his castle,
The poor man at his gate,
God made them high and lowly,
And ordered their estate.
When the penny drops, will the financial aristocracy give up their power without a fight? That's where the promise of 'interesting times' comes in...
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