We are leaving the age that made capitalism what it is today. The Industrial Revolution kicked off the greatest capitalistic age in the history of mankind. Even though there were a number of other experiments tried, nothing could touch capitalism. Over the last 100 plus years, it generated more wealth while lifting more people out of poverty than any other single model.
Alas, we are at the end of the game. Capitalism is about to die and be replaced.
No this is not an article about the merits of some other ideology. In fact, ideology, in this day and age, is stupid. It is time to cast off what you think you know because it is no longer relevant.
Capitalism is going to die because the Industrial Age is ending. It is going away and it will take our present economic system with it.
The challenge with capitalism is what it is basically concerned with. Two fundamental aspects of it are labor and capital. Now bear in mind capital is not financial although that plays a part. Capital is considered physical items such as plants and machinery which generate output. These are what feeds into the production process resulting in goods (which spawns an assortment of services). At the same time, capitalism handles the spreading of surplus throughout the economic system.
In the Digital Age, both capital and labor are reduced, if not outright eliminated. We already see some of the results of this when looking at the values of Google and Facebook compared to General Electric and IBM. The net worth of the former is much greater with a lot less employees. Also, the balance sheets are completely different. Technology companies are loaded with intellectual property while the later have the traditional assets.
Automation is eliminating jobs. We will see a path where both white and blue collars employees are laid off. Entire industries are going to disappear much in the same way as the video rental industry vanished.
Too many make the mistake of dealing with the shortcomings of capitalism by moving towards a redistribution system with government at the center of it. This is not the solution either. We are not looking at an either/or situation, Instead, it is one where neither is applicable.
We are moving into a world where there is zero marginal cost. The digital realm can reproduce things very quickly and with little to no cost. This is what killed some industries. We are going to see this expand into many different arenas.
Speaking of arenas, think about selling 20M seats to the Super Bowl. Do not think that possible? With Virtual Reality it is. One could get the rights to the game and sell the "seats" to as many people as want them. There is no limit. The physical suddenly became the digital.
The world we are entering is one where capital is no longer scare. With the population of the planet slowing, and digital technology advancing, we are only going to see "capital" become more abundant. This solves a lot of the present problems.
It does create one other that is vital to our future. Attention is something that is limited and will be scarce. The attention economy is going to still have scarcity in it since there are only so many places we can focus.
This means incentives have to be constructed in a manner that moves towards the outcome sought. We spend a lot of time focusing upon stuff that offers little payout. It is also a drawback to the present capitalistic society. Attention to one's family/children is important yet many fail to give it. It is not something that is rewarded in our present system. The environment often takes a beating because it is not something that most concern ourselves with until we have to breathe through a mask due to smog. Once again, there is no incentive in the present economic makeup to focus upon this.
The Crypto-Economic systems of tomorrow will tend to this. We are seeing the basics being laid right now. Over the next decade, we are going to see existing structures collapse under their own weight. Many will lament their loss but it is nothing more than a failure to adapt.
It can be difficult to see in the early days but what I am writing about here has been discussed for a number of years. Many are aware of the dangers being presented to the establishment by what we discuss here on a daily basis. The paradigm shift that is taking place cannot be stopped.
Of course, there will be many who go kicking and screaming, not wanting to give up on their old belief systems.
Much like Blockbuster, good luck with that.
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