The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism

I am so enjoying this book. Not finished reading it yet, but I can't put it down. It is one of those books that you need to read whilst reading other books as there is so much to ponder and think about whilst reading it that one can't read more than a few pages at a time. Jeremy Rifkin shows how the world is changing and why and the similarities between the previous paradigm shift economic revolutions that have happened in history. A fascinating read of how the internet age and the age of "water and wind, and now solar power" and the age of "digital printing" and the age of "prosumers" (people who produce and consume their own goods) is changing our way of life and especially our cost of living both for ourselves financially and on our endangered planet. The hypothesis of the book is that when Capitalism is 100% successful, because Marginal Costs of goods and services are driven towards zero, capitalism isn't capitalism anymore; it is the "Global Commons", what Thomas Freedman called the "Flat" world in his excellent book, "Hot, Flat and Crowded." Everyone everywhere has an opportunity to compete on a Level Playing Field and by doing so the costs of living are driven to zero. The people providing this new infrastructure, i.e. the Googles, Facebooks, LinkedIns, Cloud companies, companies like Microsoft, Oracle and Tesla, and for the first time the homeowners making their own electricity and supplying themselves and the grid, are the ones that are becoming rich in this new age. They are the Rockefellers and Vanderbilts, who brought oil and railroads to the world in the 19th Century, of the modern Internet Age. One can already see this with many things, for example free international calls, free internet access, 3D printers giving people the ability to print the things they need at home, shopping apps giving people the ability to buy what they need without shopping, and what I just read about this morning, car ownership patterns changing and car sharing, where Access is more important than Ownership. See http://www.greencarreports.com/news/1094590_car-ownership-rates-plunge-in-european-cities-smartphones-more-important PS: For me, Access is Freedom; Ownership is Slavery. The people who have been fighting slavery for centuries are the heroes. The slave traders and the people who treat their inhabitants like slaves are the ones desperately trying to hold onto the status quo and disrupting the freedom loving countries. Who will win remains to be seen.

This is a book I would recommend to most people as interesting, well written, and informative. Rifkin tries to give us an expansive, big-picture view of some of fundamental changes we are experiencing. Driven by information technology, we are seeing a host of second order changes with real consequences. In short, the internet of things is tied to the collaborative commons, and possibly bringing about the end of capitalism. That is the big story: the END of CAPITALISM. Can it be true? He starts with a historical view to point out that capitalism did not always exist. Roman and middle age societies worked on principles that were very distinct from capitalism. In a feudalistic society, the idea of ownership was very different from what we have today. People worked (but not very hard) and produce was distributed (but not very fairly) and people got by. It was the emergence of enlightenment ideas, and the subsequent industrial revolution, that brought about (1) the concrete ideas of ownership and (2) capitalism that you invest in and benefit from owning means of production. America is a country where the ideas of capitalism are so well integrated into the culture that it is hard to separate them, and hard to imagine a world that is different. Many information technologies are disrupting: specifically (1) sustainable power generation (e.g. solar), (2) 3d printing replacing manufacturing, (3) MOOCs and essentially free education, (4) ubiquitous communications infrastructure. There is no doubt in my mind that these are causing dramatic transformation. Look at music recording industry, how movies are changing, how much of the entertainment is direct person to person sharing on Facebook, Twitter or Pintrest. Like web 2.0 , he talks about people evolving from one-direction consumers, to bi-directional prosumers. In these kinds of things, it is certainly true that we are evolving into a collaborative commons because the marginal costs are driving to zero. One of his key points is that capitalism only works when there is scarcity. If the marginal cost goes to zero, then things become both free and plentiful. The idea of investing and controlling makes no sense if everyone can have as much as they want. He spends a lot of time talking about the collaborative commons, and how the tragedy of the commons is easily avoided by social norms which are enforced in places where a real commons exists. Don't worry, there are ways for collaborative commons to work -- and his points are credible. However, there is more to the economy that this. He does not talk at all about production of food: wheat, corn, hogs, cattle, chickens, fruit, vegetables, etc. Automation does bring down the cost of these, but certainly NOT to zero. Who will produce my wine for $0? We all have to eat, and we need clothes, and a warm place to sleep. These are not going to zero cost, and so there is no reason to believe that capitalism will disappear entirely. Sure, the Internet of Things (IoT) will dramatically effect entertainment, learning, and maybe even dramatically improve patient-led medical research. But IoT will not feed and cloth us. The second half of the book is a wealth of information about the ways that these transformations are going on around us. Cars are being replaced by car sharing programs. ThredUP allows parents to effectively share children's clothes. SharedEarth allows landowners find people who want to garden. Craig's List is decimating classified ads. AirBNB and Couch surfing is transforming overnights. Crowdfunding like KickStarter is reforming how you invest and how you get loans. What makes us happy? We used to believe that owning things would make us happy, but there is plenty of evidence that is not so. This is the great thing about collaborative commons: we might be happier with fewer things, but still having access to more than we need. The sharing economy is very promising indeed, and Rifkin covers it well. Yet, overall, I feel a little let down. The IoT will have a dramatic effect on our lives, but only on PART of our lives. Our social lives are likely to be radically changed. Anything to do with communications and interaction might be morphed beyond recognition. Cooperation will be transformative. Reading this part is a wild and entertaining ride. BUT ... certain physical requirements exist. 3D printing might get powerful enough to print entire automobiles, but the metal (and plastic) is still not free. The IoT will not allow us to raise cattle in our apartments, or mine for ore in our backyards. Capitalism has nothing to worry about. The entire society will not be zero marginal cost. Only parts of it. I do wish Rifken had covered the COMPLETE economy, and not just the amazing parts which are being transformed. To really understand the future, we need to consider the entire picture.

This is a fascinating take on several "tensions" that are playing out in the world economic stage right now (circa 2014) that have the potential to cause hugely disruptive transformations in our society over the next 25 years. I was 13 when Intel introduced the 8008, and I closely watched the evolution of microprocessors over time, to the extent that I worked for Intel right out of college for 5-1/2 years after getting a degree in math/computer science. I've seen the impact that microcomputers have had on the world since then, and observed Moore's law in action. When you take that same explosive growth paradigm and apply it to things like renewable energy (eg., solar, wind, etc), communication bandwidth, wearable computers, the "Internet of Things", the Makers Market (3D printing), electric vehicles, etc., it's easy to envision a future that's got a very different political and economic structure than what's in place now. The entrenched players in the largest economies will do all they can to hold onto a shrinking market by making these transitions painful and expensive; while smaller players in countries that have no economic inertia to maintain will quickly evolve into economic powerhouses while the dinosaurs controlling the largest economies are lumbering towards their own inevitable deaths. I chose the headline that I did because I think it's quite significant that companies like Uber, Lyft, AirBnB, and other types of highly disruptive innovators are, for the first time in history, evolving so quickly that the entrenched players are getting politicians to put the brakes on to slow things down while they figure out how to deal with them. For example, hospitality magnates in San Francisco got their City Council to pass regulations outlawing private citizens from renting out rooms on AirBnB. The livery companies in Nevada got the Nevada Attorney General to file a motion in Federal Court requesting an injunction be issued to keep ridesharing companies like Uber and Lyft from operating in the Las Vegas and Reno areas. In both cases, the incumbents made a case that such actions are necessary for "public safety", even though they have yet to present any statistics that support a thesis that consumers are being harmed in any way by the existence of any of these new startups in any way beyond current industry norms. (Cabbies assault passengers and cheat them blind with such regularity that it's not even considered "news" any more. But when one Uber driver allegedly clobbered a passenger with a hammer, it made international news overnight!) The livery and hotel industries make a lot of noise about these new services stealing their business. But ask them how much they're building out capacity to handle surges in cities where large events are occurring, like the Super Bowl, they'll say, "Oh, we can't afford to increase capacity to handle huge spikes in demand across local markets like that." But crowdsourcing rides and rooms via ridesharing apps and couch-surfing websites are perfectly capable of helping absorb the peak demands while putting additional monies into the pockets of local citizens who have not been the beneficiaries of productivity increases that these same companies have enjoyed for the past 15-20 years. Imagine a housing subdivision where the roof of every house is made up of high-efficiency solar panels; where there are several wind turbines on the property; where each house has a battery in the garage that stores up enough energy to last a week without wind or sunshine; and where there's a small "micro-grid" throughout the subdivision where everybody can share power. And imagine that that subdivision has no power coming into it from the local power company. This scenario scares the bejesus out of power companies, to the point where they are already getting local and state governments to pass regulations that will charge individual homeowners a flat minimum rate for energy whether they consume it or not -- allegedly as a form of "maintenance fee" to keep their industry alive even as demand for their services begins to plummet. Rifkin nails it here with his insights into what's going on and how disruptive things might become. The interesting thing is the time-frames he gives, as well as those reported by various "think tanks" and researchers all say his predictions are not a matter of "if" but "when". And if the large incumbent players in the various markets have anything to say about it, they're going to do all they can to encourage lawmakers to poke their noses, fingers, and whatever else they can into these areas to slow down the inevitable decline of their businesses as Rifkin's predictions unfold.

I rate The Zero Marginal Cost Society as the best book that I have read in a decade. The book is incredibly well researched and documented. The book does a wonderful job of capturing the various trends that are laying the foundation for the transformation of society and the beginnings of the Third Industrial Revolution. Never have I seen an author who can find such a level of coherence in what appears to be a chaotic world and describe it so well. Leaders and policy makers at every level need to read The Zero Marginal Cost Society and trade in their failing economic paradigms for the potential reality of the family of mankind united on and with the Earth.

It is ironic that I had to buy this book and yet my review of it is uncompensated. I realize this is my choice, but it seems contrary to the author's premise that a collaboration of the commons will eclipse capitalism. This is a worthwhile read, but I sense that the concept of collaborate commons came first and then the research was done to support that idea. I get the distinct feeling that we are supposed to embrace the idea whole heartedly and disregard any possible shortcomings of this new economic model. This is not to say that the author's analysis of economic trends is incorrect. There is ample data presented in the book to make this more than a simple statement of opinion. At the same time, some trends are ignored. For example, while the Internet of Things makes it possible to work collaboratively on everything from energy production to education to health care, the collaborative framework is controlled by a limited number of organizations. While you can name many car companies and financial institutions, how many search engines and social media companies can you name? Furthermore, while traditional capitalist companies employ and pay many people, the value of the new economy companies that provide much of the framework for collaboration is remarkably high relative to the people they employ. Their value comes in part from the collaborative efforts (sometimes unknowingly) from the people that use their services, but is paid for by the capitalist companies that pay for advertising and actually make and sell things at a profit. Capitalism is supposedly on a path to being an economic system of the past by continuing to focus on reducing marginal cost. When the infrastructure is in place and technology is self-sustaining, the cost of producing additional goods and services is minimal. We already see that with the virtually free internet. The price of computing power has also declined dramatically since the first personal computer hit the market. Yet if we look at the history of innovation, it is capital investment that made possible the successes, but perhaps just as important, paid for the failures. Without risk capital, most of the things we take for granted today would never have gotten out of the garage. Mr. Rifkin seems to assume that the need for risk capital is gradually declining. The implication is that most everything has been invented and marginal costs (and in turn profits) are so low that there is no need for further innovation financed by capital investment. I think this is short sighted. After all, 30 years ago, who envisioned that we'd be able to instantly post a book review for the world to see and that we'd be able to contact most anyone with a phone that did not connect to a wired system? What are the new frontiers of development? We don't know, but already we have people who are exploring the idea of commercial space travel without any guarantee of success. This development is being paid for by the capitalist economy. So, while I appreciate the case that Mr. Rifkin makes for a new type of economy, it is not in my opinion, a comprehensive view of things to come, any more than Marx and Engels' forecast of a new economic system was entirely accurate. (Hence the headline for this review.) I look forward to the next edition of The Zero Marginal Cost Society. With the pace of change we're experiencing, a meaningful update can't be more than 2-3 years away. Footnote: The Collaborative Commons is supposedly a move from a local and national view to a world or biosphere perspective. No one can believe this is a continuous and steady trend; there are certainly going to be some setbacks and pauses in this path. We're experiencing some of that now with various ethnic and religious groups feeling threatened by others and resorting to violence to protect their values and local connections with like-thinking people.

I read a lot of non-fiction in the course of a year, and I can say without a doubt that the Zero Marginal Cost Society was the best book I've read this year. I enjoy all of Jeremy's books, but this one really nailed it. His analysis and explanation of an emerging collaborative commons that is expanding alongside Capitalism as an alternative economy, just as Capitalism once did with Feudalism several hundred years ago, sent a tingle down my spine. I have read a lot of authors present alternatives for a future economy, but no one until now, has presented a good case for how we might actually get there. There may very well be no need for a revolution to replace Capitalism, scarcity and the selfish "All Mine" paradigm of ownership, as the Internet of Things evolves a new collaborative sharing economy of abundance.

The Zero Marginal Cost Society is a worthwhile read about the distributed collaborative economy that we have partially been moving towards during the second age of the internet revolution. There are some incredibly important ideas to take away from the book like the way manufacturing can change with 3-D printing, how asset utilization will improve with things like airBnB and how education will be socialized with things like MOOC. The lessons from the book in certain categories I think are excellent and deep but the book is also too sensationalized with misconceptions on the cost on engineering and misapplied economic ideas. To try to take the book at face value would be a mistake in my opinion. The book would have been a lot more powerful had it been more self reflective about the need for grandiose language. The book is split into 5 sections. In the first section the author gives his views on capitalism in history and argues that it is not the natural state but rather an evolved state that came about due to the end of serfdom and the division of labor that came from specialization. As society moved from subsistence scarcity to tradeable abundance we lost the community and common ownership and moved to the guilded age with water and wind power. As the railroad and energy revolution came about from coal and oil we developed a logistical network to communicate and coordinate better and allow for greater tradeability that entrenched the capitalist spirit which was required for the capital expenditure needed for the architecture of logistics and communication. There is a nostalgia of the values of the community when no one owned anything, though I am quite sure if you were to ask a Russian serf if they preferred having the land belonging to him or him belonging to the land, he would prefer the former. This economic history of the world is interesting but far from decisive and is filled with implied values masked as substantive fact. The author then goes into some economic ideas and the declining marginal cost of manufacturing. The author starts out by discussing that economics textbooks argue that in perfect competition (not the real world) the price of a good is equal to its marginal cost. Therefore as marginal costs come down due to 3D printing, Moore's law of PV cells (made up by the author and not an empirical fact) the cost of manufacturing and energy will go to 0 and will end the capitalist paradigm we are so used to. The author has misconceptions about solar panel cost deflation, solar wafers do not have a marginal cost of 0 and solar efficiency is stuck in the mid teens at the best of times with the incremental efficiency gains declining in time- these are fundamental engineering problems. I do hope that solar and wind costs decline to make them the source of our energy but the sound bites used by the author are self serving not even handed. The author discusses 3-D printings ability to change the nature of manufacturing (true) but then hyperbolizes the method into ideas like 3-D printing 3 - D printers and heralding the ago of abundance. Examples used highlight the flaws in the reasoning by talking about how tissue can be printed (in infancy stage but true) but fails to remind the reader that its not the printing that's necessarily expensive its the medium, having the right cellular material to use the printer to align is not marginal cost 0... Things like this can add up to frustrating reading at times. The author also discusses MOOCs and how they are leveling the educational playing field and are already gaining students in every country around the world. The author discusses automation as something that economists ignore as an ingredient to rising unemployment (incorrect, this is something that people have focused on for centuries) and I would like to highlight that Japan, which has the highest density of robots in its manufacturing process and is home to the best robotics company globally has extremely low unemployment. The author then focuses on the way to build out the infrastructure required to sustain a smart society. The questions about whether the natural monopoly of telecom and smart electricity should be handled by the private sector or government are discussed. The author then moves back to some fundamental ethics and discusses the supposed fallacy of the tragedy of the commons. Game theory is a subject of the 20th century that has evolved to deal with trying to solve coordination problems in which people acting in their own self interest end up with outcomes that are worse for themselves and society which goes against the grain of the logic embedded in wealth of nations. One of the first examples focused on besides the famous prisoners dilemma is the tragedy of the commons in which when given communal rights people will overuse the communal space for self interested reasons making the situation worse for everyone. The author discusses how this is wrong using a response by an academic lawyer called the comedy of the commons in which the outcomes assumed in the game theoretic example are wrong empirically. This section is interesting but off mark in its criticism. The tragedy of the commons is rightfully focused on as an example of how institutional arrangement can create suboptimal outcomes - it is not about the nature of man. People who assume all commons will end up like the tragedy of commons are massively over reaching. Families can enjoy gardens together but the entire population of a country might over run it. The argument that the author makes in this section is about the collaborative nature of man and how the problems of overfishing are things that can be self regulated by caring communities. Hmm, maybe in groups of 100, not in groups of 10,000. The nature of association of a community is what determines the applicapility of the game theory constructs, they serve as frameworks of analysis only and the author treating them as belief systems of the nature of man can only be directed towards individuals, not the field of study. The second to last section is among the most important and discusses the rise of the collaborative economy. The world is going towards one in which assets can be better utilized. From a data analysis perspective this is already happening, UPS monitors its trucks and improves routes to maximize asset utilization. From a community perspective people are better able to subscribe to services that allow them to use a pool of assets that they only need sporadically to improve general asset utilization. Air bnb being an example. The over production of underutilized assets is one that a coordinated logistics network will help us to minimize and is a societal waste. This as an arena is something to watch very carefully as it will put many entrenched businesses in awkward businesses. The author also discusses getting funding from the internet through crowdsourcing. The authors last section is the conclusion and a look at things like climate change and the sustainable environment and the things that can derail his vision. There is an incredibly important idea embedded in this book that is the nature of the economy is changing and aspects of it are getting decentralized like powering your house educating yourself and consumer to consumer sharing. There is much of the book which seems visionary but is in fact disingenuous. The marginal cost of solar panels isn't 0, the marginal cost of printing things is not 0 (though it will improve forms of manufacturing substantially). There are many times in which the author makes an argument which then conflicts with another observation. He discusses how you can print a car and how its marginal cost will go to 0 but then notes much later that auto companies with incredibly well machined manufacturing techniques already produce with extremely low margins. The author argues that we are close to abundance, I wish for that day but the directions the author is highlighting don't bring us there as the engineering costs of constructing and the depreciation of the capital stock (solar panels don't have infinite life) will ensure the cost of manufacturing is non-zero. There are important lessons in this book though they are surrounded by hyperbole and at times highly selective information that could be categorized as misinformation.

During my 30 years of teaching economics at the university level, I preached that any economist or student of economics should read, study, and thoroughly understand, in their entirety, three books: "Wealth of Nations," by Adam Smith, "Das Kapital," by Karl Marx, and, "The General Theory of Employment, Interest and Money," by John Maynard Keynes.. Were I still teaching today, I would add a fourth book to that list: Jeremy Rifkin's, "The Zero Marginal Cost Society." Like Smith, Marx and Keynes, Rifkin has provided a penetrating analysis of the world's political economy as it existed during his/their times, explaining its motivating forces, and offering a convincing prediction of its future path, including potential problems and possible solutions thereto. As the book's title implies, Rifkin's analysis offers great hope for future progress in the human condition. This is a book that will be read and studied by students of economics for many years to come.

Mit seinen Büchern "Das Ende der Arbeit" und "Access" hat Jeremy Rifkin in meinen Augen Pionierarbeit beim Durchdenken der Auswirkungen von Technologien auf unsere Gesellschaft geleistet und dabei neue Trends sowohl analysiert als auch antizipiert. Seine bis dato letzten Bücher "Die empathische Zivilisation" und "Der europäische Traum" enthielten zwar ganz nette Gedanken, ihnen fehlte aber aus meiner Sicht etwas das Konkrete und Umsetzbare. In diesem Sinne bin ich bin also ein "enttäuschter Fan". Die im Titel des neuen Buches angekündigten Themen haben mich direkt angesprochen, so dass ich nicht bis August auf die deutsche Übersetzung warten wollte - und es hat sich gelohnt! Rifkin untersucht den Kapitalismus mit seinen grundlegenden Marktmechanismen im Kontext der aktuellen massiven digitalen Technologieentwicklung. Es sind ähnliche Grundgedanken wie bei "Lights in the Tunnel" von Martin Ford, aber Rifkin kommt zu anderen Schlussfolgerungen. Er geht davon aus (sehr stark verkürzt), dass sich der Kapitalismus in Zukunft nicht mehr lohnt, weil die Grenzkosten durch die Digitalisierung immer mehr gegen Null tendieren. Es sei denn, es bilden sich Monopole (wie es aktuell in der Internetwirtschaft geschieht) und die Anbieter können so ihren Vorteil aus anderen Mechanismen ziehen. Die Zusammenhänge zwischen Technologie und Gesellschaftsformen und den damit einhergehenden Energienutzungsformen werden von vielen Seiten beleuchtet, und Rifkin entwickelt neue Rahmenkonstrukte, um bereits Bekanntes einzuordnen und zu strukturieren. Diesmal bleibt es aber nicht bei einer facettenreichen und interessanten Beschreibung des Kapitalismus in der digitalen Zeit, sondern Rifkin zeichnet einen möglichen Weg einer neuen Gesellschaft, in der wir als Prosumer nicht nur reine Konsumenten sind, sondern als Produzenten Wissen, Inhalte und Energie bereit stellen – ja regelrecht "produzieren" und es auch teilen. Er untersucht Eigentumskonzepte und deren Auswirkungen auf unsere Gesellschaftsformen, packt noch seine Sichtweisen zum Thema Energie hinzu und stellt uns alsdann eine neue heile Welt vor - mit weniger Kapitalismus und dafür mehr Allmende und gemeinschaftlichem wirtschaftlichen Handeln. Ich denke, dass Rifkin damit sehr feinfühlig aktuelle Strömungen, Gesellschafts-Konzepte und Gemeinschafts-Ideen nicht nur erfasst, sondern auch zusammengefasst hat. Dass es dabei sehr schwierig ist, nicht in die Heile- Welt- Falle zu tappen ist klar. (Und leider ist er auch das eine oder andere Mal hineingetappt). Mein Fazit für das Buch ist klar positiv: Rifkin schafft es, strukturelle Verbindungen zwischen so unterschiedlichen Welten wie Wirtschaftssystemen, Gesellschaftsformen, individuellem Lebensgefühl- und Aufgaben, Technologischen Konzepten und Energieversorgung zu ziehen und diese so in Bilder zu verpacken, dass sie ein neues Gedankenfundament bilden können für eigene Projekte und Ideen. Für mich ist „The Zero Marginal Cost Society“ damit nochmal ein "echter Rifkin", bei dem ich irgendwie den Willen des Autors gespürt habe, seine gesamte angesammelte Erfahrung der letzten Jahre in ein Buch packen zu wollen (ähnlich wie bei Daniel Kahnemann mit seinem "Schnelles Denken, langsames Denken"). Rifkins neues Buch verdient auf jeden Fall die gedankliche Auseinandersetzung durch Viele. - In diesem Sinne: Kaufen, Lesen und dann mitdiskutieren!

Jeremy Rifkin is an absolute genius. Wish this were required reading. Society could benefit greatly if we put just a fraction of these recommendations into practice. Would highly recommend this for any deep thinkers out there.

Après avoir décrit la Troisième Révolution Industrielle, Jeremy Rifkin explore encore plus loin le changement de société qui accompagnera le déclin du capitalisme, provoqué par ces mêmes économies d'échelle qui ont fait son moteur. JR explore plusieurs facettes de la société (commerce, production, enseignement...) et livre une vision toujours positive et optimiste de la deuxième moitié du XXIe siècle. On peut d'ailleurs s'interroger sur cet optimisme à tout crin, malgré les changements extrêmes que JR professe : naïveté, acte de foi, certitude documentée... ? Un beau voyage en tout cas, à lire.

Full of many inciteful ideas on how our economic system will be transformed over the coming decades, making life ultimately more purposeful and meaningful than the goods and services that we consume. The irony of it all is as Rifkin says, is that the success of capitalism leads to its own demise; something he by no means regrets. Underscoring the complex, the good and the bad within the capitalist system, (environmental degradation, exploitation of. Workers etc) he is hopeful of the coming era of abundance, an idea made possible by the coming together of various networks , allowing products, services and communications to be scaled laterally rather than centrally. A rather mixed obituary of an economic system, but a thoroughly enjoyable read.

Pese a ser de segunda mano, el libro llegó como nuevo, yo creo que ni se había abierto. Y habían escrito perfectamente mi nombre y apellidos, con tildes y todo, cosa increíble viniendo del Reino Unido. The book was new, even if it had been bought as a second hand one. My name was perfectly written, with all the accents. First time that happens in the history of the UK.