The Zero Marginal Cost Society (part 2)

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The Collaborative Commons

In 1968, ecologist Garrett Hardin published his classic essay, “The Tragedy of the Commons.” Using sheep grazing on common land as his prime example, Hardin described how the pursuit of unbridled self-interest can be expected to destroy a common resource. Each individual keeps adding more sheep, since the benefits accrue to that individual while the costs are spread among many. Eventually the land is overgrazed and many sheep die. The conclusion: “Freedom in a commons brings ruin to all.”

For many years, economists could see only two models for managing resources: the capitalist model of private ownership and the socialist model of government ownership and top-down regulation. Yet the idea of the Commons refused to die.

In 1986—18 years after Hardin’s essay seemed to put the last proverbial nail in the coffin of Commons theory—Carol Rose pried open the casket, breathing new life into what many had already concluded was a dead idea. The Northwestern University law professor entitled her salvo “The Comedy of the Commons,” a scathing rejoinder to Hardin’s earlier thesis. Her spirited and rigorous defense of Commons governance rousted the academic community, spurring a revival of Commons scholarship and practice.

Long before strong centralized states and modern capitalism, many societies did in fact manage resources like pastures, forests and irrigation systems through informal systems of rights and responsibilities accepted by all. In 2009, Elinor Ostrom won the Nobel Prize in economics for her study of what makes such systems work, at least in certain contexts. I find it easier to imagine them working in small-scale settings like extended families or villages, but larger-scale societies with high-speed communications might also pull it off. Rifkin certainly thinks so. He envisions three kinds of Commons–Communications Commons, Energy Commons and Logistical Commons.

The Battle of the Century

Rifkin believes that the first half of this century will be dominated by the struggle between “prosumer collaboratists and investor capitalists.” Rifkin’s own involvement in that struggle began in 1979, when General Electric applied for a patent on a genetically engineered microorganism designed to consume oil spills. The US Patents and Trademark Office denied the patent, but the Supreme Court awarded it in a 5-4 decision. In 1987, the patent office ruled that any genetically engineered, multicellular organism could be patented. In 2002, the Foundation for Economic Trends, of which Rifkin is President, brought together 250 organizations from 50 countries in support of a “Treaty to Share the Genetic Commons.” It declared that the gene pool has an intrinsic value more fundamental than any commercial use, and it opposed the private ownership of genetic information in principle.

Private ownership of intellectual property may be necessary if such property is hard to produce without large investments of capital. But as the costs of acquiring and disseminating information plummet–the cost of reading DNA sequences is a case in point–Rifkin sees less to be gained by organizing society on the private ownership and profit model:

Patents and copyrights thrive in an economy organized around scarcity but are useless in an economy organized around abundance. Of what relevance is intellectual-property protection in a world of near zero marginal cost, where more and more goods and services are nearly free?

Like Jaron Lanier in Who Owns the Future?, Rifkin deplores the efforts of Big Data companies like Google and Facebook to collect, own and sell vast amounts of information collected from Internet users. He expects users to fight back, not by trying to charge for the information they provide, as Lanier would have it, but by “demanding that their knowledge be shared in open Commons for the benefit of all, rather than being siphoned off and enclosed in the form of intellectual property owned and controlled by a few.”

In the realm of energy, the battle will be between a centralized energy grid dominated by large producers and a decentralized grid where users produce and distribute a lot of their own renewable energy. Just this week, the New York Public Service Commission proposed such a “distributed” energy network.

The “Logistical Commons” would have a similar decentralized organization. Instead of big companies distributing products from a few warehouses and distribution centers, more sophisticated and standardized tracking would allow many enterprises to share the same facilities as needed.

The Sharing Society

In the Collaborative Commons described by Rifkin, people will get their information more from one another and less from centralized sources. Advertising will decline as people rely more on peer product reviews. Ownership will decline in value while access to shared resources will rise in value. That quintessential example of private property, automobile ownership, will become less important as car-sharing networks expand. Peer-to-peer lending and crowdfunding will compete with bank financing.

This rosy picture of the future depends, of course, on the assumption that high productivity and general abundance will have made rugged individualism largely obsolete. People won’t feel as strong a need to rely on what is mine, but will be more comfortable benefitting from what is ours.

When the marginal cost of producing additional units of a good or service is nearly zero, it means that scarcity has been replaced by abundance. Exchange value becomes useless because everyone can secure much of what they need without having to pay for it. The products and services have use and share value but no longer have exchange value.

Rifkin does acknowledge two main threats to abundance that we will need to overcome: climate change and cyberterrorism.

A human transformation

Taking a very long view of history, Rifkin connects revolutions in communications and energy with revolutions in human consciousness:

The great economic paradigm shifts in human history not only bring together communication revolutions and energy regimes in powerful new configurations that change the economic life of society. Each new communication/energy matrix also transforms human consciousness by extending the empathic drive across wider temporal and spatial domains, bringing human beings together in larger metaphoric families and more interdependent societies.

The latest communications and energy revolution takes this process farther than ever before:

Is it not possible to imagine the next leap in the human journey— a crossover into biosphere consciousness and an expansion of empathy to include the whole of the human race as our family, as well as our fellow creatures as an extension of our evolutionary family?

Seeing society as a Collaborative Commons makes it easier to see the entire biosphere as a Commons as well:

By reopening the various Commons, humanity begins to think and act as part of a whole. We come to realize that the ultimate creative power is reconnecting with one another and embedding ourselves in ever-larger systems of relationships that ripple out to encompass the entire set of relationships that make up the biosphere Commons.

Finally, Rifkin contrasts the new “social entrepreneurialism” with the “commercial entrepreneurialism” that has been embedded in capitalist markets:

The new spirit is less autonomous and more interactive; less concerned with the pursuit of pecuniary interests and more committed to promoting quality of life; less consumed with accumulating market capital and more with accumulating social capital; less preoccupied with owning and having and more desirous of accessing and sharing; less exploitive of nature and more dedicated to sustainability and stewardship of the Earth’s ecology. The new social entrepreneurs are less driven by the invisible hand and more by the helping hand. They are far less utilitarian and far more empathically engaged.

I am inclined to be skeptical of utopian visions, and I’m usually willing to assume that capitalism will continue, although hopefully with some egalitarian reforms. Rifkin’s extrapolations from current trends do not seem unreasonable, however. The fact that we can’t seem to create enough gainful employment to distribute the benefits of our own productivity does not bode well for capitalism. How long will people accept a system that maintains technologically unnecessary scarcities for the many while generating great abundance for the few? The fundamental principle of the Collaborative Commons, that all people have access to valued resources so they can both produce and consume, may prove irresistible.

After reading Lanier’s Who Owns the Future?, I had second thoughts about my own information-sharing activities because of concerns about the companies that collect and sell information that people provide for free. Rifkin helped restore my confidence that sharing is a good thing, and that the sharers will ultimately prevail over the monopolizers. One can certainly hope so.

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