The Obsolescence of Capitalism
The objective of this article is to examine the effects of current social and technological trends on the capitalist economic system, and to present a more efficient resource based economy for managing such trends. This is not an in-depth research paper, but rather a broad-based analysis that is intended to spur discussion. Ultimately, this article explores the potential for humanity to radically restructure society, and move from a system of scarcity to one of global abundance.
Update (March 2015): Note that I have recently published a followup article which provides a more in-depth analysis of the topics discussed here.
Post-Capitalism: Rise of the Collaborative Commons
The Root Problem
Arising out of the demise of the feudal aristocracies of medieval Europe, capitalism has developed over the past two hundred years to become the greatest wealth-producing system in human history. Though modern capitalism may be traced to the mercantilist traders of the sixteenth to eighteenth centuries, a competitive labor market was not established until 1834 in England; before which, industrial capitalism as a social system did not exist(1). In just two centuries, individuals have become empowered through a capitalist ideology — an economic philosophy that has been carried to every corner of the world through the processes of globalization — and a global civil society has emerged that enjoys a relatively unprecedented standard of living.
This unparalleled growth in human progress and development of the most recent centuries, however, has begun to rapidly slow for both individuals and nation-states around the world. Inequality in terms of income, ownership of wealth, and consumption have all drastically increased over the past thirty years — both with regards to individuals as well as between nations — increasingly placing more of the world’s wealth in fewer hands. Inequality has been exacerbated through the neoliberal processes of globalization, which have essentially facilitated the entrenchment of the two dialectically opposed capitalist classes in the international sphere. The bourgeoisie and the lower class proletariat now interact at the international level, in which wealth owning nations are able to exploit developing peripheral states.
As inequality is exacerbated, so too is the hollowing out of the middle class, resulting in a subsequent increase in overall poverty. Capitalist logic defines poverty in strict monetary terms, such as the poverty line, in which people don’t possess enough money to purchase basic goods from the market. In this way, capitalism not only makes people dependent on the market for survival, but also does not acknowledge alternative factors which contribute to human wellbeing, such as health, education, affection, the environment, or life in the community. At the macro level, the GDP as an indicator of national development is itself flawed, measuring the aggregate quantity of a basket of agreed upon goods and services with no indication of value beyond the market. Even as an indicator of economic value, the GDP records $1000 worth of medical equipment as having the same value as $1000 worth of tobacco or firearms.
In terms of hunger, global food production has outpaced population growth over the past two decades, leading to enough food currently being produced to feed ten billion people(2). Thus, the problem of hunger is a result of inadequate access to, and inadequate distribution of, the resources that are available. The capitalist economic system is unable to address this problem, since all that is produced is directly related to the market, such that the production of food is strictly for exchange. In other words, the logic of capitalist markets does not allocate resources based upon need, as the inherent aim of market actors is simply to produce a profit. The result is that even though most of the world’s food production takes place in the Global South, these same regions do not have adequate access to the food which they produce. Placing profits above human wellbeing applies to all goods that are produced under capitalism, and is also the reason why consumer products are designed to fail at a pre-determined lifespan.
Concerning the environment, the capitalist economic system views nature as an infinite input of resources. The environment is considered to be one part of the consumer economy, which itself has no boundaries and is able to grow infinitely. Under capitalism, the environmental costs of production are not accounted for in the market and can therefore be written off by corporations as negative externalities, or free gifts, and environmental degradation is ultimately unaccounted for.
Not only is much of this capitalist logic counterintuitive and counterproductive with regards to human wellbeing and equality, the current trends brought about by this sort of economic order are increasingly unsustainable. These social issues, however, are merely symptoms of the fundamental root problem: the capitalist economic system itself. The very system that has propelled society to its current heights is now restricting human progress and development at the social level. Fundamental laws and regulations upon which the capitalist system is based are no longer effective, or required, in an era of transnationalism and free-flowing information. Capitalist policies and philosophies of profit-driven competition and debt-based investment are increasingly rendered obsolete through transnational cooperation, access to abundant and sustainable resources, and technological innovation.
It is becoming ever more apparent that the capitalist economic philosophy — based around scarcity, competition, and debt — no longer applies in the coming age of abundance and ease of access to resources, driven by technology. Capitalism is the root cause of many current debilitating social circumstances around the world, and is now increasingly restraining humanity from attaining a potentially far greater and more equitable standard of living for all.
Laws of Marxism
The four laws of Marxism can be briefly examined to better understand how and why the capitalist system is failing. These laws were developed to analyse the flaws of the capitalist system and to explain how the demise of capitalism could potentially come about. It should be recognized that these laws have been widely accepted by capitalist economists, and that it is also generally acknowledged that many of these issues can be prevented by maintaining a robust middle class.
The law of disproportionality states that a tendency toward equilibrium does not exist, and that supply will always outpace demand in a capitalist economy. This overproduction and under-consumption of consumer goods results in the constant potential for recurring economic crises. The capitalist solution is to stimulate demand through a consumption-driven middle class. This middle class also acts as a buffer and reduces the wealth gap between the rich and poor. The capitalist culture of consumerism then, is a direct result of the need to stimulate a continuous demand for consumer products from the middle class in order to maintain market stability.
The second law describes a concentration of capital, in which the drive for profit results in some market actors accumulating value more quickly than others. This excess value can then be used to buy up smaller competitors. These sorts of hostile takeovers not only result in a loss of competition, but lead to increasing concentrations of wealth in fewer hands and the growth of inequality. This problem may be addressed with strict anti-monopoly laws and regulations preventing hostile takeovers.
The law of the falling rate of profit states that a market entity’s rate of profit will decline over time due to increasing investment costs in more efficient technologies and developing newer products. This can be addressed through government subsidized research grants, outsourcing employees, or by replacing paid employees with an automated workforce.
The final law states that capitalism requires uneven development. This is due to the fact that two dialectically opposed classes are required under capitalism, both at the individual level as well as the international. Thus, even though an international capitalist economy will develop the world over time, it will not develop it evenly. This can be seen throughout the periods of colonialism, imperialism, and the current period of neoliberal globalization. Under capitalism it is not in the interest of core industrialized nations to develop peripheral states, as developed nations require developing states to exploit. Uneven development is not only an unequal and unsustainable process for global development, it also leads to conflict amongst nations.
Obsolescence
In analysing the Marxist laws it is possible to better comprehend the extent to which current trends, such as the hollowing out of the middle class and growing unemployment, may undermine the foundations of the capitalist economic system. It is also possible to determine why such trends are currently taking place, and whether or not they may be reversed, by examining the role of technological innovation.
The first law of disproportionality essentially states that capitalism requires a culture of consumption, driven by a strong middle class, in order to stimulate demand and maintain market stability. The concentration of capital, and subsequent loss of competition, ultimately leads to more wealth in fewer hands, and less wealth in the hands of the middle class. The middle class is further eroded as rates of profit decline, and market entities respond by outsourcing employees and automating the workforce.
While the hollowing out of the middle class is significant, technological innovation is the means through which the capitalist economic system will ultimately be rendered obsolete. Similar to the way in which the internet has deregulated and decentralized access to information, technologies such as 3D printing, crypto-currency, abundant free-energy technologies, and the complete automation of the workforce stand poised to circumvent capitalist controls and radically reform society at every level.
3D printers coupled with the peer-to-peer transfer of digital schematics will allow consumers to print any consumer part or product from home at no monetary cost. Just as digital music and movies are accessible at no cost over the internet today, with the advent of 3D printing so too will digital blueprints be available for goods ranging from clothing, to electronics, car parts, and weaponry. This technology alone has the potential to bring about the obsolescence of the corporate capitalist marketplace.
Crypto-currencies, such as bitcoin, are digital currencies that are secured by open-source cryptography and backed by mathematical algorithms. These currencies aim to transition the monetary system away from fiat currencies centered around individual nation-states, and towards a single global currency that is completely decentralized and free of government regulation. In the case of bitcoin, which currently has the most established crypto-currency economy, there is a finite number that will be made available at a pre-determined rate, freeing the currency from inflationary pressures associated with the ability to print greater amounts. This also helps make the currency attractive to individuals living in unstable economies or in nations experiencing hyperinflation. Ultimately, crypto-currency not only has the potential to circumvent the established banking sector, but the potential to dissolve the power of state level governments in general by undermining the ability to collect taxes.
Every hour the sun radiates more energy onto the earth than the entire human population uses in one year(3). Clean and sustainable technologies that are able to harness this energy are available today. In addition to solar, vast sources of energy can be harnessed from wind, wave and tidal action, ocean currents, temperature differentials, falling water, geothermal, electrostatic, hydrogen, natural gas, algae, biomass, bacteria, phase transformation, fresnel lenses, and thermionics; amongst others. Geothermal energy alone can supply more than five hundred times the energy contained in all the world’s known fossil fuel resources while reducing the threat of global warming(4). The development of free-energy technologies on a global scale has the potential to both sustain every human being on the planet, as well as the potential to transition humanity from a civilization based upon scarcity to one of abundance.
The complete automation of the workforce has the ability to free humanity from wage labor, and for the first time allow individuals to pursue their true passions; free of any sort of debt or servitude. There is no task that could not ultimately be carried out by machines or managed by sophisticated artificial intelligence. Computers will eventually be able to design their own programs, improve and repair their own circuitry, and update information about the social needs of humanity. Autonomous machines and self-erecting structures could excavate canals, dig tunnels, construct bridges and dams, and efficiently build advanced infrastructure on a global scale. Human participation would consist of selecting the desired ends. This does not mean, however, that individuals would be required to be any less involved in the functioning of society. It simply means that the relationship between people and work will be redefined: from work that people are forced to carry out in order to survive, to activities that are undertaken for personal fulfillment. Many individuals may simply choose to spend their time travelling the world, aiding in overseas development projects, or practicing an art or sport that they love; others may love to cook and choose to open their own restaurant, or continue their current profession teaching or performing surgery; some people will choose to become highly educated and contribute to scientific research efforts, or become involved in the exploration of space. The effect of freeing humanity from everyday mundane tasks will fully unleash the unrestrained potential of the human race for the first time.
Technological innovation will be the downfall of the capitalist economic system. Capitalism is designed to manage resources within a closed system of scarcity, and is completely ineffective at managing a society based upon abundance and the free-flow of resources. The exponential rate of technological advancement means that innovations capable of undermining the capitalist system will come about rapidly. In order to successfully transition away from capitalism, humanity will be forced to undergo a complete restructuring of society, and ultimately move towards a system that is capable of managing an abundance of global resources.
Resource Based Economy
A resource based economy is built upon the principles of abundance and equal access to resources. Through the development of clean, sustainable, and free energy sources it is possible to produce more than enough energy and resources to sustain a high standard of living for every person on the planet. Over time, automated machines would intelligently manage the earth’s resources and ultimately free humanity of all unnecessary laborious tasks. All of the world’s resources would be held as common heritage, and all people would have unhindered access to any resource, good, or product available, without the use of money, credit, barter, or any form of debt or servitude.
Far from a static utopia, or centrally managed welfare state of the past, a resource based economy is built upon a decentralized automated workforce. Artificial intelligence would monitor, manage, and distribute the world’s resources based upon human requirements; both sustainably and efficiently. This system is designed to liberate all of humanity and allow individuals to pursue their passions unhindered. People are free to determine their own paths, and are empowered to develop a diverse and dynamic global society.
The resource based economy, developed by The Venus Project, is currently the most well researched approach for managing a post-scarcity society. Such a drastic restructuring will involve transitioning from a system based upon profit driven competition, debt-based monetary transactions, and consumerist accumulation, to a system based around cooperation and development, unhindered access to resources, and the freedom to pursue personal ambitions. Under a technologically driven resource based economy, humanity has the potential to bring about an unprecedented standard of living for all, and develop a dynamic global society. However, the precise process through which the current capitalist based society might transition to a resource based economy is difficult to predict.
The Transition
A transition from the current system of independent nation-states to a unified global society under a resource based economy would be the most jarring socioeconomic upheaval in human history. It is not possible to predict how a transition process might unfold, but some initial strategies can be proposed.
Under a unified global society the governing power of individual states must be drastically decreased. Much of that power would dissolve downward to cities, or city-states, in terms of overseeing the governance of civil society. Each city would manage its own affairs and any major decisions would be voted upon democratically. Some of that state power, however, would need to be transferred upwards, to a transitional federalist global council. This global federation would be made up of elected representatives from every major city-state with a population greater than one million. Powers would be limited and the global council would be tasked with three primary objectives:
1. Maintain peace, security, and stability — Any major military action undertaken by the global council must first be approved by a global democratic vote from all citizens. It may be initially necessary for nation-states to maintain security outside of city-states until these duties can be fulfilled by the council.
2. Coordinate efforts to establish the global infrastructure required for a resource based economy — Develop clean and sustainable free-energy supplies for the global population. Develop an automated economy to efficiently manage, produce, and distribute global resources; monitored and directed by an artificial intelligence network. Fully implement a resource based economy.
3. Assume control of all national military hardware and carry out a complete global demilitarization.
To initially move towards this transitional approach, a global declaration could be voluntarily signed by each individual nation willing to participate, pledging support to the transitional initiative. No nation should be forced to participate.
This is one example of how a transition to a resource based economy may be carried out on the macro level. However, initial pressure must be applied from below, by both individuals and grassroots level organizations. The Venus Project has recently completed a twenty-five acre research facility in Florida to help present proposals and provide information on the development of a resource based economy. As well, the organization is producing a feature film to raise awareness, and also plans to construct a fully functioning experimental city under a resource based system. Other grassroots initiatives include efforts to produce a technical assessment of the required resources for the global population, and to develop a free-energy strategy on a global scale.
Though the transition process remains unpredictable, strategies must be developed to help ensure that every effort is made to maintain peace. This is a project that many people would be eager and grateful to be a part of, as the implications for humanity and society are unparalleled.
Conclusion
The capitalist economic system has been relatively effective at distributing wealth and managing resources in a society based upon scarcity. It is increasingly apparent, however, that the capitalist system is unable to address progressively debilitating social symptoms such as inequality, poverty, hunger, environmental degradation, and the erosion of the middle class.
Concurrently, fundamental capitalist controls are circumvented and undermined by technological innovations that have the power to radically reform society. Since the rate of technological advancement is exponential, the need to radically restructure will come about rapidly. Thus, the question of the obsolescence of capitalism is no longer if, but when.
A resource based economy offers a viable approach for efficiently managing a diverse global society of abundance, and for providing unhindered access to resources. Such a system would bring about the liberation of humanity — free of forced labor, debt, and servitude — and would ultimately unleash the full potential of the human race for the first time.
Humanity possesses both the ability and capacity to peacefully transition to a post-scarcity society. Though the transitory process is less than certain, it is likely that the next forty years will be the most significant in human history.
Further Research
Update (March 2015): Note that I have recently published a followup article which provides a more in-depth analysis of the topics discussed here.
Post-Capitalism: Rise of the Collaborative Commons
The explanation of the resource based economy provided in this article is an incredibly brief overview of a highly researched socioeconomic system. Readers are strongly encouraged to follow-up at the links below for in-depth analyses on all aspects of the resource based approach. The Venus Project http://thevenusproject.com
Designing the Future (pdf) http://thevenusproject.com/images/documents/downloads/designing-the-future_pdf/DesigningTheFuture.pdf
References
1. Polanyi, Karl. 1944. The Great Transformation. Boston: Beacon Press, p.87.
2. Foley, J., Ramankutty, N., and V. Seufert. 2012. “Comparing the Yields of Organic and Conventional Agriculture.” Nature, 485: p.229-232.<http://www.nature.com/nature/journal/v485/n7397/full/nature11069.html>
3. 2011. “America’s Solar Energy Potential.” AmericanEnergyIndepence.com. <http://www.americanenergyindependence.com/solarenergy.aspx>
4. Fresco, Jacque. 2007. “Designing the Future.” The Venus Project, p.25-26. <http://thevenusproject.com/downloads/ebooks/Jacque%20Fresco%20-%20Designing%20the%20Future.pdf>
Contact
Christopher J. Dew
cj_dew@hotmail.com
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