Why capitalism?

by Algon 5y3rd May 20152 min read164 comments

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Note: I'm terrible at making up titles, and I think that the one I gave may give the wrong impression. If anyone has a suggestion on what I should change it to, it would be much appreciated.

As I've been reading articles on less wrong, it seems to me that there are hints of an underlying belief which states that not only is capitalism a good economic paradigm, it shall remain so. Now, I don't mean to say anything like 'Capitalism is Evil!' I think that capitalism can, and has, done a lot of good for humanity. 

However, I don't think that capitalism will be the best economic paradigm going into the future. I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.

I recently changed my views as a result of a book someone recommended to me 'The zero marginal cost society' by Jeremy Rifkin. In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.

The author claims that these three things will eventually bring their respective sectors marginal costs to zero. This is significant because of a 'contradiction at the heart of capitalism' (I'm not sure how to phrase this, so excuse me if I butcher it): competition is at the heart of capitalism, with companies constantly undercutting each other as a result of new technologies. These technological improvement allow a company to produce goods/services at a more attractive price whilst retaining a reasonable profit margin. As a result, we get better and better at producing things, and it lets us produce goods at ever decreasing costs. But what happens when the costs of producing something hit rock bottom? That is, they can go no lower.

3D printing presents a situation like this for a huge amount of industries, as all you really need to do is get some designs, plug in some feedstock and have a power source ready. The internet allows people to share their designs for almost zero cost, and renewable energies are on the rise, presenting the avenue of virtually free power. All that's left is the feedstock, and the cost of this is due to the difficulty of producing it. Once we have better robotics, you won't need anyone to mine/cultivate anything, and the whole thing becomes basically free.

And when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system? Of course, the arguments presented in the book are much more comprehensive, and it details an alternative economic paradigm called the Commons. I'm just paraphrasing here.

Since my knowledge of economics is woefully inadequate, I was wondering if I've made some ridiculous blunder which everyone knows about on this site. Is there some fundamental reason why Jeremy Rifkin's is a crackpot and I'm a fool for listening to him? Or is it more subtle than that? I ask because I felt the arguments in the book pretty compelling, and I want some opinions from people who are much better suited to critiquing this sort of thing than I.

Here is a link to the download page for the essay titled 'The comedy of the Commons' which provides some of the arguments which convinced me: 

http://digitalcommons.law.yale.edu/fss_papers/1828/

A lecture about the Commons itself:

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/ostrom_lecture.pdf

And a paper (?) about governing the commons: 

http://www.kuhlen.name/MATERIALIEN/eDok/governing_the_commons1.pdf

And here is a link to the author's page, along with some links to articles about the book:

http://www.thezeromarginalcostsociety.com/pages/Milestones.cfm

http://www.thezeromarginalcostsociety.com/pages/Press--Articles.cfm

An article displaying some of the sheer potential of 3D printers, and how it has the potential to change society in a major way:

http://singularityhub.com/2012/08/22/3d-printers-may-someday-construct-homes-in-less-than-a-day/

Edit: Drat! I forgot about the stupid questions thread. Should I delete this and repost it there? I mean, I hope to discuss this topic with others, so it seems suitable for the DISCUSSION board, but it may also be very stupid. Advice would be appreciated.

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