Why capitalism?

Note: I’m ter­rible at mak­ing up ti­tles, and I think that the one I gave may give the wrong im­pres­sion. If any­one has a sug­ges­tion on what I should change it to, it would be much ap­pre­ci­ated.

As I’ve been read­ing ar­ti­cles on less wrong, it seems to me that there are hints of an un­der­ly­ing be­lief which states that not only is cap­i­tal­ism a good eco­nomic paradigm, it shall re­main so. Now, I don’t mean to say any­thing like ‘Cap­i­tal­ism is Evil!’ I think that cap­i­tal­ism can, and has, done a lot of good for hu­man­ity.

How­ever, I don’t think that cap­i­tal­ism will be the best eco­nomic paradigm go­ing into the fu­ture. I used to view cap­i­tal­ism as an in­her­ent part of the so­ciety we cur­rently live in, with no real eco­nomic com­pe­ti­tion.

I re­cently changed my views as a re­sult of a book some­one recom­mended to me ‘The zero marginal cost so­ciety’ by Jeremy Rifkin. In it, the au­thor states that we are in the midst of a third in­dus­trial rev­olu­tion as a re­sult of a new en­ergy/​pro­duc­tion and com­mu­ni­ca­tions ma­trix i.e. re­new­able en­er­gies, 3-D print­ing and the in­ter­net.

The au­thor claims that these three things will even­tu­ally bring their re­spec­tive sec­tors marginal costs to zero. This is sig­nifi­cant be­cause of a ‘con­tra­dic­tion at the heart of cap­i­tal­ism’ (I’m not sure how to phrase this, so ex­cuse me if I butcher it): com­pe­ti­tion is at the heart of cap­i­tal­ism, with com­pa­nies con­stantly un­der­cut­ting each other as a re­sult of new tech­nolo­gies. Th­ese tech­nolog­i­cal im­prove­ment al­low a com­pany to pro­duce goods/​ser­vices at a more at­trac­tive price whilst re­tain­ing a rea­son­able profit mar­gin. As a re­sult, we get bet­ter and bet­ter at pro­duc­ing things, and it lets us pro­duce goods at ever de­creas­ing costs. But what hap­pens when the costs of pro­duc­ing some­thing hit rock bot­tom? That is, they can go no lower.

3D print­ing pre­sents a situ­a­tion like this for a huge amount of in­dus­tries, as all you re­ally need to do is get some de­signs, plug in some feed­stock and have a power source ready. The in­ter­net al­lows peo­ple to share their de­signs for al­most zero cost, and re­new­able en­er­gies are on the rise, pre­sent­ing the av­enue of vir­tu­ally free power. All that’s left is the feed­stock, and the cost of this is due to the difficulty of pro­duc­ing it. Once we have bet­ter robotics, you won’t need any­one to mine/​cul­ti­vate any­thing, and the whole thing be­comes ba­si­cally free.

And when you can get your goods, en­ergy and com­mu­ni­ca­tions for ba­si­cally free, doesn’t that un­der­mine the whole cap­i­tal­ist sys­tem? Of course, the ar­gu­ments pre­sented in the book are much more com­pre­hen­sive, and it de­tails an al­ter­na­tive eco­nomic paradigm called the Com­mons. I’m just para­phras­ing here.

Since my knowl­edge of eco­nomics is woe­fully in­ad­e­quate, I was won­der­ing if I’ve made some ridicu­lous blun­der which ev­ery­one knows about on this site. Is there some fun­da­men­tal rea­son why Jeremy Rifkin’s is a crack­pot and I’m a fool for listen­ing to him? Or is it more sub­tle than that? I ask be­cause I felt the ar­gu­ments in the book pretty com­pel­ling, and I want some opinions from peo­ple who are much bet­ter suited to cri­tiquing this sort of thing than I.

Here is a link to the down­load page for the es­say ti­tled ‘The com­edy of the Com­mons’ which pro­vides some of the ar­gu­ments which con­vinced me:

http://​​digi­tal­com­mons.law.yale.edu/​​fss_pa­pers/​​1828/​​

A lec­ture about the Com­mons it­self:

http://​​www.no­belprize.org/​​no­bel_prizes/​​eco­nomic-sci­ences/​​lau­re­ates/​​2009/​​os­trom_lec­ture.pdf

And a pa­per (?) about gov­ern­ing the com­mons:

http://​​www.kuh­len.name/​​MATERIALIEN/​​eDok/​​gov­ern­ing_the_com­mons1.pdf

And here is a link to the au­thor’s page, along with some links to ar­ti­cles about the book:

http://​​www.theze­ro­marginal­cost­so­ciety.com/​​pages/​​Mile­stones.cfm

http://​​www.theze­ro­marginal­cost­so­ciety.com/​​pages/​​Press—Ar­ti­cles.cfm

An ar­ti­cle dis­play­ing some of the sheer po­ten­tial of 3D print­ers, and how it has the po­ten­tial to change so­ciety in a ma­jor way:

http://​​sin­gu­lar­i­ty­hub.com/​​2012/​​08/​​22/​​3d-print­ers-may-some­day-con­struct-homes-in-less-than-a-day/​​

Edit: Drat! I for­got about the stupid ques­tions thread. Should I delete this and re­post it there? I mean, I hope to dis­cuss this topic with oth­ers, so it seems suit­able for the DISCUSSION board, but it may also be very stupid. Ad­vice would be ap­pre­ci­ated.