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Wharton Prof, Adviser to the European Union, Says Capitalism Is Starting to Be Replaced By Something Better

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By what, specifically? In short, by a solution for artificially created scarcity and needlessly long hours of tedious work.

This great book was written by a professor (since 1994) at the Wharton School of Business. It was reviewed in an interview on Jeremy Rifkin, the author, is an adviser to Angela Merkel and the European Union, and at least one of his previous books have been read by the former premier of China who is in all likelihood now reading this one, which provides a grand unifying theory of the author's thinking as expressed in his 20 previous books written over a span of four decades.

Main points & predictions

Just as John Maynard Keynes predicted in 1931, new machines and new economic arrangements will finally change what it means to be human. They will undermine our craving for private property and excessive ownership, free us from a great deal of unnecessary toil, and turn us into free agents in a new global "sharing economy," the beginnings of which we already see, with organizational/economic possibilities pioneered by the likes of AirBNB, Uber and Lyft, as well as the millions of non-profit, non-governmental organizations (NGOs) that are burgeoning worldwide, including many (here and here) that facilitate cooperative food production & distribution, as well as cooperatively-owned and -built housing.(Close out the first screen to see the important part.)

So, as decently paid jobs become ever more scarce, why shouldn't our government now fund ever more NGOs of a kind that put chronically unemployed, young (and older), dark-skinned (and white) men (and women) to work (at a decent wage) refurbishing run-down housing so that it can be affordably available to all those who have fallen on hard times? In all probability this would be less expensive for taxpayers than spending $50,000/year, each, keeping so many young, disadvantaged, (and mostly minority) men behind bars, often for much of their lives. Even if the government had to pay to have these men taught, on the job, all the skills they needed, it would still be less expensive (for society) than the alternative, which consists of tracking them down, arresting them, prosecuting them and jailing them for years on end, all of which happens after they learn to fight poverty, poor educations, low wages, and job discrimination by resorting to drug peddling, pimping, auto theft, burglary, mugging, or whatever, to make a living.

Here's a city-based NGO Community Housing Development Corporation (CHDC) that has developed 200+ affordable, new or rehabilitated homes and 500+ affordable rental units in Richmond, California. See their past portfolio of CHDC completed developments here. This NGO is currently developing 500+ units of affordable housing in one city. Also see their list of CHDC developments that are in their "pipeline."

India alone has a million NGOs. By 2008, the IRS had recognized more than 1.9 million tax-exempt organizations (many of them NGOs) in the US, the combined assets of which represented $2 trillion dollars. Most of the larger organizations with tax-exempt status can be found online at this address.

As Rifkin reports in his book, "According to a survey of 40 nations conducted by the Johns Hopkins University Center for Civil Society Studies , the nonprofit Commons accounts for $ 2.2 trillion in operating expenditures. In eight countries surveyed-- the United States , Canada, Japan, France, Belgium, Australia, the Czech Republic, and New Zealand-- the nonprofit sector makes up, on average, 5% of the GDP. Its portion of the GDP in these countries exceeds the GDP of all utilities, and is also equal to the GDP of the construction industry, and is nearly equal to the GDP of banks, insurance companies, and financial services." This sector of the economy, Rifkin says, will continue to grow until it becomes dominant, forcing capitalism to the periphery.

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These new machines and the ever-growing numbers of NGOs (a good many organized around the production of food and housing) will largely replace much of the capitalist system before the middle of the 21st century, says Rifkin; he bases this conclusion on extrapolations of current trends. His book, cited and linked at the outset of this article, pushes some of the most important new technologies and kinds of organizational development to their logical, and sometimes scary, conclusions.

Most machine systems will eventually be self-replicating, he says, capable of producing their own spare parts and propagating themselves indefinitely. They will be powered by alternative energy sources like the sun and the wind, allowing them to run, pollution free, indefinitely.

They will be connected by the coming "internet of things," a self-organizing network that will allow them to operate as part of a new, pervasive yet intelligent and "electronically wired together" infrastructure. These machines will be fully automatic and will, for the most part, eventually require near-zero human labor to operate. (There are already plenty of robot-based factories in Japan and South Korea that operate in total darkness, 24/7, since no humans are present the vast majority of the time.) Such factories will soon provide products at virtually no cost, save the minimal one of supplying the basic raw materials and electrical power. And since the cost of their operation will be virtually zero, each additional item produced (i.e. at the production margin), will cost virtually zero as well. Hence the term 'zero marginal cost.'

The heart of Rifkin's argument

If, by way of ever more advanced technology, the marginal cost of producing each additional item falls almost to nothing (zero marginal cost), then products can to that extent become virtually free. So, in their pursuit of profit, businesses will therefore have irrevocably undermined their own profit margins, and capitalism will, to that extent, have opened itself up, by and large, to replacement by a better way to organize labor and the distribution of income, goods and services--essentially a new economic system. In this new system, income will no longer be based on people putting in long hours of work. Rising in place of capitalism, Rifkin argues, will be a civilization based on a new and more fulfilling communitarianism--a collaborative commons free of the hang-ups and fetishes that have characterized the back-biting, back stabbing, materialistic, dog-eat-dog, wealth-hoarding individualism of the late capitalist age.

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Key technologies and arrangements

Included will be the 3D 'printing' of all manner of objects, tools and structures, including houses; open-source software; the internet of things; the sharing economy; thousands of online courses taught by the nation's best professors, often with millions of students in each class, that are already reshaping (here and here) education; and the artificial intelligence that is enabling machines to replace ever more types of human labor. (Note re: our nascent revolution in education: Five million books published between 1500 and 2008 have already been digitized by Google and are potentially available and searchable by anyone with access to the Internet.)

Three Rifkin predictions

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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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More on Jeremy Rifkin and his endeavors. ... by Richard Clark on Friday, Jun 20, 2014 at 10:17:30 AM
As an indication of what Rifkin is excited about,... by Richard Clark on Friday, Jun 20, 2014 at 4:39:48 PM
Most would say that these GDP measures are not th... by Richard Clark on Friday, Jun 20, 2014 at 4:41:20 PM
In 1848 John Stuart Mill and Marx/Engels published... by Derryl Hermanutz on Saturday, Jun 21, 2014 at 7:44:26 PM
I think that's an extremely interesting and import... by Richard Clark on Sunday, Jun 22, 2014 at 6:25:41 PM
Derryl, is there any chance you could elaborate on... by Richard Clark on Monday, Jun 23, 2014 at 10:10:12 AM
Your Excellent comment is an article in itself ___... by urb musak on Thursday, Jun 26, 2014 at 1:33:29 AM
Derryl, you should be writing some articles. What... by Pal Palsimon on Tuesday, Jul 8, 2014 at 1:42:16 AM
For what it's worth, authors or anyone who claims ... by Eddy Schmid on Sunday, Jun 22, 2014 at 5:15:23 AM
Hey Eddy, I thought your post was very interestin... by Richard Clark on Sunday, Jun 22, 2014 at 7:20:15 PM
Continued from above:All these machine-assisted de... by Richard Clark on Sunday, Jun 22, 2014 at 7:27:17 PM