The Zero Marginal Cost Society - Jeremy Rifkin

Summary

The script introduces a paradigm shift towards a 'collaborative commons' economic system, driven by the zero marginal cost phenomenon. Enabled by technological advancements, this system allows for the production and sharing of information, energy, and physical goods at near-zero costs, fostering a sharing community and reducing reliance on traditional market economies. It emphasizes the importance of addressing climate change and the potential for a democratized, sustainable, and shared economy by mid-century, with a focus on quality of life over GDP.

Takeaways

• 🌐 The emergence of a new economic system, the collaborative commons, is being triggered by the concept of zero marginal cost, which is reshaping the way goods and services are produced and consumed.
• 🛠️ The technological revolution, particularly the Internet of Things (IoT), is enabling the reduction of marginal costs to near zero, making certain goods and services nearly free and abundant.
• 📈 The transition from information goods to physical goods experiencing zero marginal cost is facilitated by the IoT, which is expanding the digital revolution into the physical world.
• 🌡️ Climate change and resource scarcity, particularly food and water, pose significant challenges to the new economic system, potentially derailing its progress.
• 🏗️ The collaborative commons is already taking shape in Europe, with renewable energy sources like solar panels and wind turbines exemplifying the shift towards zero marginal cost energy production.
• 🤝 The IoT is inherently designed to be distributed and collaborative, aligning with the social commons and fostering a sharing community that emphasizes social capital over financial capital.
• 💡 The shift to a collaborative economy reduces the need for income from traditional market activities, as individuals can produce and share their own energy and goods.
• 🎨 Employment in the new system is likely to shift towards the social commons, focusing on creating social capital through community, culture, sports, arts, and health services.
• 🚗 Advancements like 3D printing and electric vehicles are part of the third industrial revolution, demonstrating how technology can enable decentralized production and sharing of goods.
• 🌳 The IoT not only revolutionizes production but also promotes sustainability by encouraging sharing and reducing the need for resource-intensive manufacturing.
• 🌍 The narrative of ownership is shifting towards access, with younger generations valuing the ability to share resources over individual ownership, which has implications for economic models and quality of life.

Q & A

What is the 'collaborative commons' economic system mentioned in the script?

The 'collaborative commons' is a new economic system that is emerging, characterized by the sharing of goods and services at near-zero marginal cost, enabled by advancements in technology and the Internet of Things.

What does 'zero marginal cost' signify in the context of this new economic system?

Zero marginal cost refers to the cost of producing an additional unit of a good or service being reduced to near zero after fixed costs are covered, making goods and services essentially priceless, abundant, and beyond the traditional market exchange economy.

How has the technology revolution impacted the information goods industry?

The technology revolution has led to a significant reduction in marginal costs in the information goods industry, allowing consumers to become prosumers, producing their own information goods and leading to the decline of traditional industries like newspapers, magazines, book publishing, and the recording industry.

What is the significance of the Internet of Things (IoT) in the transition to the collaborative commons system?

The Internet of Things (IoT) is crucial as it allows the transition from information goods to physical goods at near-zero marginal cost. It integrates communication, energy, and transport/logistics internets into one system, enabling the sharing and production of physical energy and manufactured goods.

What role do sensors play in the development of the IoT and the new economic system?

Sensors are integral to the IoT, as they connect and monitor everything within the global neural network. By 2030, it is predicted that there will be 100 trillion sensors, facilitating the move towards a near-zero marginal cost economy for both information and physical goods.

How does the script relate the production of energy through renewable sources to the concept of zero marginal cost?

The script explains that once the fixed costs of renewable energy sources like solar panels or wind turbines are covered, the marginal cost of the energy they produce is near zero because the sun and wind are free resources.

What is the impact of 3D printing on the new economic system described in the script?

3D printing allows small businesses and individuals to produce their own physical products at near-zero marginal cost using recycled materials as feedstock. This democratizes production and contributes to the collaborative commons by reducing reliance on traditional manufacturing and distribution models.

How does the script suggest that the social commons will evolve with the IoT?

The script suggests that the IoT, being a distributed and collaborative technology, is a natural fit for the social commons, which includes non-profit institutions and community services. The IoT can enhance the social commons by enabling more efficient and widespread sharing of resources and services.

What challenges does the script identify that could derail the transition to the collaborative commons system?

The script identifies climate change, food and water scarcity as significant challenges that could derail the transition. Addressing these issues is crucial to ensure the sustainability of the new economic system.

How does the script view the role of employment in the collaborative commons system?

The script posits that while high technology may reduce the need for traditional employment in the marketplace, the social commons will create new employment opportunities focused on building communities and enhancing quality of life through cultural, sports, arts, and health services.

What is the script's perspective on the relationship between sharing, resource use, and quality of life?

The script suggests that a shift towards sharing access to goods and services, rather than focusing on ownership, can lead to more efficient use of resources and a positive impact on quality of life, even if it negatively affects traditional measures of economic growth like GDP.

What narrative change does the script call for to accompany the technological advancements?

The script calls for a shift from a narrative of geopolitics to one of biosphere consciousness, where human actions are recognized as intimately impacting other humans, ecosystems, and species, fostering a shared understanding of our interconnectedness within the biosphere.

Outlines

00:00

🌟 Emergence of the Collaborative Commons

The script introduces the concept of a new economic system known as the 'collaborative commons,' which is emerging as a result of the 'zero marginal cost' phenomenon. This system is distinct from capitalism and socialism and is driven by technological advancements that reduce the cost of producing additional goods and services to near zero. The script discusses the impact of this on the information goods industry and how it's now extending to physical goods with the advent of the Internet of Things (IoT). The IoT is enabling the transition from digital to physical, allowing for the production of goods at minimal cost, which challenges traditional market economies. The potential of this system is vast, but it hinges on our ability to address climate change and resource scarcity.

05:01

🚀 Revolutionizing Production and the Social Commons

This paragraph delves into the implications of the collaborative commons for production and employment. It highlights how individuals can produce and share their own goods, such as energy from solar panels and 3D printed products, at near zero marginal cost. The script emphasizes the importance of the social commons, which includes non-profit sectors like education and healthcare, and how the IoT can enhance its role by fostering collaboration and community sharing. The social commons is seen as a source of social capital and a potential employer in a world where technological advancements reduce the need for traditional market employment. The paragraph also touches on the importance of addressing climate change and the potential for a shared economy that prioritizes quality of life over GDP growth.

10:03

🌱 Towards a Shared and Sustainable Economy

The final paragraph focuses on the broader vision of a shared and sustainable economy enabled by the collaborative commons and IoT. It calls for a shift in human narrative from geopolitics to biosphere consciousness, emphasizing the interconnectedness of all life on Earth. The script suggests that by mid-century, we could achieve a world where efficiency and reduced resource use lead to a better quality of life for all, without leaving anyone behind. It concludes with a guarded optimism about the potential for change, urging the audience to lead in this transformation to ensure a future for the next generations.

Keywords

💡Economic System

An economic system is a framework that outlines how resources are allocated and distributed within a society. In the script, the emergence of a new economic system, the 'collaborative commons,' is presented as a significant historical event with profound implications for future generations. This system is characterized by the potential for goods and services to become nearly free due to technological advancements that reduce marginal costs.

💡Collaborative Commons

The collaborative commons refers to an economic model where shared resources and collaborative production are emphasized over individual ownership and market exchange. The script discusses this as the new paradigm that is triggered by the zero marginal cost phenomenon, allowing for a shift towards a more communal and less market-driven economy.

💡Zero Marginal Cost

Marginal cost is the cost of producing one additional unit of a good or service. Zero marginal cost, as mentioned in the script, is a scenario where this cost is reduced to near zero due to technological advancements. This concept is central to the video's theme, as it enables the abundance of goods and services, challenging traditional economic models.

💡Information Goods

Information goods are products that can be easily replicated and distributed at minimal cost, such as digital content, software, and media. The script highlights the transformation of consumers into 'prosumers' who produce their own information goods, illustrating the impact of zero marginal cost on traditional industries like newspapers, magazines, and the recording industry.

💡Internet of Things (IoT)

The Internet of Things is a network of interconnected physical devices, vehicles, buildings, and other objects that are embedded with sensors, software, and network connectivity. In the script, the IoT is described as expanding the communication internet to include a physical internet, enabling the extension of zero marginal cost from information goods to physical goods.

💡Prosumer

A prosumer is a blend of a producer and a consumer, someone who both creates and consumes goods or services. The script uses the term to describe how millions of consumers have become active participants in the production of information goods, which is a key aspect of the collaborative commons economic system.

💡3D Printing

3D printing is a process of creating three-dimensional objects from digital models by adding material layer by layer. The script mentions 3D printing as an example of how small businesses and individuals can produce physical goods with near-zero marginal costs, contributing to the collaborative commons economy.

💡Social Commons

The social commons refers to resources and services that are shared by a community and managed collectively, such as education, health services, and cultural organizations. The script emphasizes the importance of the social commons in creating social capital and providing employment and community services that are not driven by financial capital.

💡Green Energy

Green energy, also known as renewable energy, comes from natural sources that are replenished at a higher rate than they are consumed, such as solar, wind, and geothermal. The script discusses the role of green energy in reducing marginal costs to near zero, making energy nearly free and contributing to a more sustainable economy.

💡Climate Change

Climate change refers to long-term shifts in global or regional climate patterns, primarily due to human activities. The script identifies climate change as a critical challenge that could derail the potential of the collaborative commons if it is not addressed, as it affects food and water availability, which are essential for survival.

💡Biosphere

The biosphere is the global ecological system integrating all living beings and their relationships, including their interaction with the elements of the lithosphere, hydrosphere, and atmosphere. The script concludes with a call for a shift to biosphere consciousness, emphasizing the interconnectedness of all life on Earth and the need for a shared responsibility for the planet's well-being.

Highlights

Emergence of the first new economic system since capitalism and socialism in the 19th century - the collaborative commons.

Trigger for the shift to a collaborative commons economic system is zero marginal cost, making goods and services nearly free and abundant.

Technology revolution reducing marginal costs to near zero across the value chain, impacting the information goods industry.

Millions of consumers becoming prosumers, producing their own information goods due to zero marginal cost.

Newspaper, magazine, book publishing, and recording industries struggling with the impact of zero marginal cost.

Expansion of the communication internet to an Internet of Things, enabling the transition of zero marginal cost from information to physical goods.

By 2030, 100 trillion sensors are projected to connect everything in a global neural network, facilitating near-zero marginal cost production and distribution of physical energy and products.

Prosumers dramatically increasing productivity and reducing marginal costs to produce, consume, and share physical energy and manufactured goods.

Food, water, and climate change as critical wildcards that could derail the new economic system if not addressed.

New economic system already in place in Europe, with renewable energy sources like solar and wind reducing marginal costs to near zero.

The Internet of Things designed to be distributed, collaborative, and scalable, aligning with the social commons model.

3D printing enabling small businesses and hobbyists to produce their own products with recycled materials at near-zero marginal cost.

Green energy powering 3D printing factories and electric vehicles, contributing to a sustainable economy.

The social commons as a critical institution for creating social capital and community, becoming more relevant with the Internet of Things.

Employment shifting from traditional marketplace to the social commons, focusing on creating communities and quality of life.

The potential for nearly free energy and goods, but the necessity of addressing food and water security to ensure survival.

The Internet of Things enabling a rapid transition away from fossil fuels and towards green energy production and sharing.

The rise of sharing economy reducing resource consumption and environmental impact, with a focus on access over ownership.

The need for a new human narrative and biosphere consciousness to align with technological advancements for a sustainable future.

A vision for 2050 of a shared, sustainable economy with high quality of life for all, moving beyond the 1% vs 99% divide.

Transcripts

We're just beginning to glimpse

the bare outlines of a new economic system

entering onto the world stage. This is the first new economic system

to emerge since the advent of capitalism and its antagonist socialism

in the early 19th century. It's a remarkable historical

event. It has long term implications for every one of us our children and our grandchildren.

This new economic system is the collaborative commons.

And what's triggering this shift to a new economic paradigm

a collaborative commons economic system is something called

zero marginal cost. Marginal cost

the cost of producing an additional unit of a good and service

after your fix costs are covered. The prospect of a technology revolution so extreme in

its productivity

that it can reduce those marginal cost to near zero across the value chain

making goods and services essentially priceless

nearly free abundant and beyond the market exchange economy.

Then this zero marginal cost phenomena went on to invade the entire information

goods industry.

Millions of consumers became prosumers

and they began producing their own information goods.

If you take a look at the newspaper industry magazines, book

publishing and the recording industry

they've never come back from zero marginal cost.

Our economists have thought well we think there's a firewall here.

And that is even though more and more information goods are heading toward

near zero marginal cost

in virtual worlds

that they will not cross the firewall into the physical world

of brick and mortar goods and services. No longer.

What's happening now is that the communication internet

is now expanding to an Internet of Things. A physical internet

that allows us to go from the world of bits to the world

atoms. And when we have these three internets

embedded in one system - a communication internet that's interacting continually with an

energy internet and a transport and logistics internet in one platform -

this Internet Of Things allows us to begin moving near zero marginal cost

from information goods to physical goods. By 2020 IBM says we'll be at 30 billion sensors

and a recent forecast study a few months ago says that by 2030

we will have a 100 trillion sensors

connecting everything with everyone in one global

neural network. When we move from the internet to the Internet of Things

and we move from bits to atoms we begin to see a completely new economic model

that can get us to near zero marginal cost

in the production and distribution of physical energy and physical products.

Anyone of millions of prosumers will be able to increase their productivity

dramatically reduce their marginal cost and produce

consume and share their own physical energy and

manufactured goods with each other just like we now do with information goods.

The big wild card here is food and water and climate change.

Because if we can't address climate change and we continue on this road,

if we can't produce food and don't have access to water in a reliable fashion

everything I'm telling you is derailed.

This new system is already in place in Europe. Let's take energy.

The moment you put up a solar panel on your building

or a wind turbine on-site, even before you pay back the fixed cost

- and that's usually 3 to 8 years so it's not a long time. Immediately though your

marginal costs are near-zero

because the sun off your roof is free. The wind off the side of your building is free.

The geothermal heat coming up from under the ground is free. Your garbage

converted in a bioconverter to energy in your kitchen, it's all free.

And millions of small players had joined together in cooperatives

small and medium-sized businesses, homeowners. They're generating the new electricity

The Internet Of Things is designed to be distributed, collaborative,

peer-directed and it scales to lateral economies of scale.

Then let's take 3D printed products. We now have

several hundred thousand hobbyists, thousands of small and medium-sized

startup companies that are printing out their own 3D printed products.

And they're attaching their 3D printing operation, at least in Europe,

into this new Internet Of Things, this third Industrial Revolution.

You go up on the Internet, you download your software - it's all free,

open source - then you use for your feed stock

recycled plastic, paper or even using sand and gravel

and melting it down at near zero marginal cost. Then they're

powering their 3D printing factory

with green energy from their energy internet that's generated

at near zero marginal cost.

Then they're marketing their products on global websites

with very little advertising cost,

you just pay a short fee, low marginal cost. And then we're just beginning to

put in the logistics internet.

You'll be able to power your vehicle to send your 3D printed product to

market with your own green electricity from the energy internet,

and the electric vehicles in a few years from now will be printed out.

The first printed vehicle now exists in Canada. It runs on solar.

We'll have driverless vehicles that can move across the system at will

near zero marginal cost.

This is a revolution.

The question becomes this. If millions then hundreds of millions

of people can begin to produce, consume or share

their own information goods, energy and a lot of their manufactured goods

at near zero marginal cost, making them nearly free

and beyond the exchange model of the capitalist market, what kind of new economic

system do we have to envision to organize the world

the one that I'm laying out here?

It's the social commons.

What's happening now is the social commons, which is a venerable institution

that we rely on for education institutions that are non-profit,

health services, day care centers for our children,

assisted living for the elderly,

environmental organizations,

cultural, sports, arts, it goes on and on.

If they were eliminated and we just had the marketplace,

we would not have much of a life on the planet.

The social commons is ignored by economists because

it doesn't create finance capital. It creates social capital.

But it's a big revenue player. What's making this

social commons now more relevant than any time in the past

is this Internet Of Things.

Because the Internet Of Things is a general purpose technology platform

that's designed to be the technological soulmate

of the social commons. The whole design is to be distributed,

collaborative, scales latterally, not vertically

and it rewards collaboration across these lateral networks.

It creates a sharing community.

If millions and millions of people are producing and sharing their own energy

and 3D printed products and information goods, they're going to need less income,

at zero marginal cost.

They're still going to need employment. If the marketplace doesn't need them

because we can produce the energy and the products, you know

in the marketplace with just high-technology,

where will you get the employment?

In the social commons. The social commons creates social capital

human beings with the other human beings, creating communities -

cultural, sports, arts, wellness, health, quality of life.

Those are the more important employments. Making widgets is not as intellectually

challenging and motivating to the young mind as it is

trying to create a sense of human community,

a sense of transcendence and

sense of finding meaning in the world

Last thought.

We can get to nearly free energy.

We're already there, nearly free goods and services, but without food and water

we don't survive. And we don't know, if we can even feed people

and provide water for people, how do we repopulate millions of people in

the western part of the US in 30 years?

So... climate change is

the elephant in the room. What's important to acknowledge here is that the

third Industrial Revolution, this Internet Of Things allows us

to move quickly out of fossil fuels. And have millions of people begin to

produce and share their own green energy.

And this Internet of Things, because its entire purpose

is to increase efficiencies to reduce marginal costs it means

it shows us how to use less resources more effectively.

So we don't put a big burden on the planet that we live in.

So we have young people here not only sharing

information goods and energy now and 3D printed products,

but so we have car sharing and bike sharing and now we're sharing apartments and

homes and clothes and tools and toys.

So we have a generation that's beginning to believe

it's not about ownership, it's access,

and if more people share what they have, less has to be produced.

It does have a negative impact on GDP

but it has a positive impact on quality of life, and that's the way

to measure a good economy.

It isn't just technology. What it does is it democratizes the economy.

And hopefully you'll be in a world in 2050 that won't be the 1% or the 99%.

It'll be a shared economy, a sustainable good quality of life,

where no one's left behind. Now is it Utopia? No.

We need to change the human narrative. We need a new story for the

human race to go with the technology.

We have to move from geopolitics to biosphere consciousness

in one generation. Everything we do

intimately impacts some other human, some other ecosystem

some other species on this Earth. We've got a young generation here that's beginning to see

we live in one indivisible community, the biosphere.

So I'm guardedly hopeful.

And if we can dramatically increase efficiencies,

reduce our marginal cost, and that means using less resources

more effectively and taking a less burden on the planet,

we may get to a better world by mid-century.

You need to help lead this, so we have a chance of rehealing the planet

and creating a future for our children.