The End of Capitalism

Although corporate power is at the height of its strength, the signs of “peak capitalism” are everywhere. As globalization erodes natural resources, destroys local economies and siphons wealth from the poorest to the richest, millions of people are being left behind and shut out of the economy. While this glut of people with no economic opportunities portends disaster for global peace, some say there may be reasons for optimism:

As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.

The basic premise here is not new: it’s an age-old utopian hope that machines will take care of sustainably generating everything we possibly need at a cost pretty close to zero so that most people can relax and enjoy a more fulfilling life built around leisure rather than labor.

But why would the major technology companies give up their total monopoly over our future robot overlords?

In a nutshell, the article suggests that the abundance of information will inevitably undermine the major technology companies whose business is designed around creating a scarcity of information. For example, Apple and Google both have strict copyrights on the code for their software and the patent designs of their products. They regularly pursue litigation against other companies for even thinking about infringing on their proprietary content. Hence, the tech companies work to create scarcity.

In contrast, an open source software like Linux is not owned by anyone, and therefore anyone can use it and improve it, not just Linux’s private engineers. The above article envisions such an open source future where information and resources are abundantly available, allowing everyone to construct a collectivist utopia.

But the postcapitalist vision here is a bit idealistic and assumes an equitable distribution of benefits from technological advancements. If anything can be learned from history, it’s that the rich and powerful do not go quietly, and they certainly do not willingly give up their power. To assume the technology companies and that capitalism itself would innovate their own demise is a bit naive.

It’s true that automation will change everything and that most jobs will be eliminated–except for the engineers needed to run the machines. This wave of job loss will make the Great Recession look mild. The vast majority of the population will lose everything while the technology companies who own the machines will siphon all the wealth into their coffers.

While automation would inevitably drive down prices of all consumer goods, the mountains of wealth accumulated by these technology companies will not suddenly become worthless. It will still be hugely influence in the politics of governments around the world.

And therein lies the problem. An automated future necessitates socialist economic policies that would force the technological keyholders to share their massive wealth through a regressive tax that funds four essential policies for everyone: universal basic income, universal healthcare, universal education and universal housing. Anything short of these policy goals will create a situation of gross wealth inequality where the rich power-holders prey on everyone else using advanced technology that will look increasingly like magic to a poor, uneducated populous. Democracy cannot function when so much wealth and power is centralized.

Unfortunately, this dystopian vision of a hypercapitalist future may be more likely, at least in the short term. While the dream of a postcapitalist era is worth fighting for, the real human suffering that such a fight entails should not be underestimated.

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