At the very moment of its ultimate triumph, capitalism will experience the most exquisite of deaths.
This is the belief of political adviser and author Jeremy Rifkin, who argues the current economic system has become so successful at lowering the costs of production that it has created the very conditions for the destruction of the traditional vertically integrated corporation.
Rifkin, who has advised the European Commission, the European Parliament and heads of state, including German chancellor Angela Merkel, says:
No one in their wildest imagination, including economists and business people, ever imagined the possibility of a technology revolution so extreme in its productivity that it could actually reduce marginal costs to near zero, making products nearly free, abundant and absolutely no longer subject to market forces.
With many manufacturing companies surviving only on razor thin margins, they will buckle under competition from small operators with virtually no fixed costs.
“We are seeing the final triumph of capitalism followed by its exit off the world stage and the entrance of the collaborative commons,” Rifkin predicts.
The creation of the collaborative commons
From the ashes of the current economic system, he believes, will emerge a radical new model powered by the extraordinary pace of innovation in energy, communication and transport.
“This is the first new economic system since the advent of capitalism and socialism in the early 19th century so it’s a remarkable historical event and it’s going to transform our way of life fundamentally over the coming years,” Rifkin says. “It already is; we just haven’t framed it.”
Some sectors, such as music and media, have already been disrupted as a result of the internet’s ability to let individuals and small groups compete with the major established players. Meanwhile, the mainstreaming of 3D printing and tech advances in logistics – such as the installation of billions of intelligent sensors across supply chains – means this phenomenon is now spreading from the virtual to the physical world, Rifkin says.