Reblogged from two of Michel Bauwens articles on the P2P Foundation Blog:
In “What to think of Rifkins Post-Capitalist Approach” Bauwens describes and comments on the recent PhD thesis with about the same title of Michael J. C. McAllum, about Rifkin’s ideas expressed in his recent books “The Third Industrial Revolution” ((and I guess “The Zero Marginal Cost Society”, jvt)).
Because of the importance for the future of all of us of these idea’s and the discussions around them I copy both of Bauwens articles below in full. (including typo’s therein)
jaap van till, TheConnectivist
============Michel Bauwens on McAllum on Rifkin================
(1) The following is excerpted from a really interesting PhD thesis that interprets and critiques Rifkin with the assistance of other macro-historical thinkers:
* PhD Thesis: Making Sense of Rifkin’s Third Industrial Revolution: Towards a Collaborative Age. McAllum, Michael J C. Thesis submitted to The University of the Sunshine Coast. Under the supervision of Dr. Sohail Inayatullah & Dr. Marcus Bussey. Submitted: June 7, 2016
McAllum first distills the theoretical underpinnings of Jeremy Rifkin’s way of thinking:
“In summary these theories are:
1. A Theory of Limits.
An argument about the entropic effects of current socioeconomic arrangements.
2. A Theory of Discontinuous Change.
Causes of change based on the proposition that significant changes in energy form and use, together with different communication technologies, have disruptive and radical effects on the societies where such changes are realised and expressed.
3. A Theory of History.
The framing of the history of these discontinuities as a series of identifiable and sequential revolutions have culminated in the Third Industrial Revolution and thus might be described as ‘Stages of History’.
4. A Theory of Empathic Consciousness.
Advocacy of the view that humanity’s biophysically determined sense of empathic consciousness frames as our collective sense of time and space and is reframed by our individual metaphysical choices.
5. A Theory of Leadership.
The development of a number of concepts that interwoven create a ‘sinew of leadership’; a social code that enables networks to act appropriately and synergistically in ways that can be widely shared and accessed by many actors in multiple locations. These actors through choice, not positional power, embed this social code through agency in their activities, products and services across the civil and private spectrum. Over time those who understand the need for transformation become widely distributed within and beyond the established order. They include key policy makers required to create the frameworks for future infrastructure, scientists and technologists who are providing the enabling mechanisms, and finally, ‘prosumers’ who are taking advantage of emergent transformational effects.
6. A Theory of Post Capitalism.
This argues that the current system is at its limits. Further that discourses which privilege the Khunian view of mechanistic organisation and the US senses of individualism as the basic unit of society are both incompatible with, and insufficient for, the emerging collaborative society, as well as the perpetuation of the capitalist model, upon which the current system rests. If these discourses and the hegemony they have created (mythology) are prolonged, there is no exit from cumulative entropic effects. On the other hand the development of a new kind of infrastructure (the Internet of Things) together with a post capitalist collaborative economy provides the basis for escape.
7. A Theory of Transformation.
Only two possible future scenarios are available as future options. These are either Transform or Collapse, on the proviso that the former occurs in a timely manner.
However, a sense of coherence needs to go beyond a litany of applied or empirical explanations. It requires an understanding of the systemic changes that are either explicit or implicit in these theories; the worldviews that are privileged in those systems; and identification of the mythologies, metonymies and metaphors that underpin those worldviews. For instance, the central role of mythology and the use of the metonymic ‘hydraulic civilisation’ allusion is better understood if one accepts, as Rifkin believes, significant shifts in the mastery of energy and communication technology reframe our sense of space and time, and that they have been and are, as a consequence, transformative in nature.”
The author then introduces Jeremy Rifkin’s Theory of Post Capitalism:
“Two of Rifkin’s most important contentions—the effects of entropy on the global environmental system and the effect of energy efficiencies as drivers of growth—are largely neglected in conventional economic theory. While his early work, for the most part, sets out the logic and evidence for these propositions, his later works articulate potential responses to the challenges these contentions raise. The evolution of this ‘challenge and response’ process has lead him to a point where he has declared that the essence of the current economic system (capitalism) “is passing, not quickly but inevitably and that in its place a new economic paradigm, the Collaborative Commons is in the ascendant”.
Substantiation of this declaration requires Rifkin to: theorise about systemic limits and new options as alternatives to the current model; identify worldviews alternative to those that underpin the capitalist ethic; and at least proffer some possibilities for future metaphors and mythologies.
At the outset it should be noted that, while some would regard Rifkin’s views as ‘of the left’, he is not a Marxist economist, in the accepted sense of that term. For the Marxists, the question is not about whether or not to ‘exploit, grown and own,’ rather the issue is about who controls or has the right to ‘exploit, grow and own.’ In contrast, Rifkin questions the concept of production and its entropic effects per se. As such, he might be more accurately characterised as an ‘individualist’ in the European sensibility, where “the emphasis is on inclusivity, diversity, quality of life, sustainability, deep play, universal human rights and the rights of nature”393. It is within this context that, in the Zero Marginal Cost Economy, he notes mixed feelings about the passing of the capitalist era, and is somewhat surprised that an economic system organised around scarcity and profit could almost counter intuitively spawn a system of nearly free goods, services and abundance, that will see its demise. For Rifkin, the emergence of the Collaborative Era that in earlier works he has described as distributed capitalism and lateral power, provides the opportunity to reframe world views that if they were to continue would (and still do) provide the greatest challenge to “the survival of our species in recorded history”.
The strands of Rifkin’s Theory of Post Capitalism litany are several. Firstly, as was explained in an exploration of his Theory of Limits, he argues that Adam Smith’s economic model is flawed in two important ways. These include the Newtonian view on which it is based, and the lack of regard it has for the entropic effects that are consequential to the growth-and-accumulation imperative inherent in the model. Secondly, he argues that this same model has reached the outer limits of how far it can extend growth aspirations, within an economic system deeply dependent on oil and other fossil fuels. He then posits that the emergence of a new energy and communications infrastructure will reinvent the way the world does business. By design, in the manufacturing realm, it will shift the way of life from highly capitalised, giant, centralised factories, equipped with heavy machines, to economic models that are distributed, modular and personalised in their relationships between buyer and seller. Most importantly, through the way it is designed and constructed, this process must occur with fewer entropic effects.
This realignment of how economic activity occurs also alters the dynamics of relationships and the exercise of power. It favours lateral ventures both in the social commons and in the market place on the assumption that mutual interest pursued jointly is the best route to sustainable economic development. This is a different kind of capitalism; one that is distributed in its nature and which fundamentally reconfigures the temporal and spatial orientation of society. It changes the nature and cost of transactions and offers the possibility of new ways to organise and manage economic activity. As an economic model, it is systemically different in its modality and therefore, it requires a different kind of theorising. Moreover, it must be asked: can an economic system, which is systemically different, be understood through the same lens used to theorise the existing system?
If it is to be considered through the lens of the current system, then it differs in three important ways.
The first is that the logic of a system, contingent on substantive margins on both the supply and the demand sides—what we call profits or accumulations—cannot be sustained if those margins are almost zero.
The consequence in Rifkin’s view will be that:
…capitalist markets will continue to shrink into narrow niches where profit-making enterprises survive only at the edges of the economy…relying on very specialized products and services.
The second is that the nature of the market function, however that is expressed, changes from an opportunity for accumulation to an opportunity for exchange. In this model, capitalism is ‘distributed’, premised on the idea that everybody can trade and exchange, without the controls that exist in the current proprietary models. In this reformulated future, and given that markets are, at least in part, an extension of socio-economic identity, we can assume that an understanding of economic identity for both individuals and communities is reframed as well. In a real-time, near-term, future world existing market mechanisms are too slow and “a new economic system will be as different from market capitalism as the latter was from the feudal economy of an earlier era”.
Thirdly, with less opportunity for capital accumulation, the ability to ‘own’ property is less available; ‘mine versus thine’ becomes harder to sustain and the focus shifts to an interest in access to shareable goods and services.
In Rifkin’s later works, the shift from ‘property ownership’ to ‘access’ to goods and services is a tangible expression of the challenge the Third Industrial Revolution poses to a highly embedded pattern of economic thought: a worldview integral to the concepts of capitalism. Nothing, he argues, is more sacrosanct to an economist than property relations, for these are an explicit representation of a commitment to economic growth.
If the possibility is considered that the idea of property accumulation will be gradually set aside, this new Age will “bring with it very different conceptions of human drives and the assumptions that govern human economic activity”. These contemplations of what will constitute economy are deeply problematic in the current order, yet to limit their characterisation to being simply components of an economic revolution is too narrow a lens through which to understand what is, or what might, occur. This is because their impact is and will be a reflection of different motivations and constitutions of identity.
While having traced the rise and establishment of the private property rights, and the consequences of those rights, in some detail, in all his works since The European Dream (for it was not always that way), he contends that, in a collaborative future, social capital plays an increasingly important role. This is because the accumulation of social capital enables increased access, rather than ownership, to networks where the cost of participation is plummeting as communications technologies become cheaper. The consequence of this rebalancing of capital is “a shift in emphasis from the quantity and worth of one’s possessions to the quality of one’s relationships [and] requires both a change in spatial and temporal orientation”406. As such, it is likely to play a far more significant role in economic life that will increasingly take place in a Collaborative Commons.
From the systemic shift, and a worldview that reconstitutes property rights as a process of access not ownership, what emerges is a new series of case studies and metaphors about collaboration and commonality that reflect the swing from a scarcity to an abundance mentality. This new mentality is not the kind of abundance that, as Gandhi observed, provides for every human’s [sic] greed, rather it is an abundance that, anchored in our ecological footprint, provides enough to satisfy every human’s [sic] need.408 Therefore, it is a step away from a materialist ethos to one of sustainability and stewardship, where nature becomes a community to preserve, rather than a resource to exploit409. Rifkin contends that the absence of the fear of scarcity mitigates against the desire to over consume, hoard and over indulge, and while not quickly removing the dark side of human nature, encourages the development of a new cultural social code. This he sees emerging in at least a portion of younger generations who have “grown up in a new world mediated by distributed, collaborative, peer-to-peer networks”.
Rifkin therefore argues his Theory of Post Capitalism from three premises.
The first is that the system conditions that already exist in the present growth-focused construct make its continuation impossible. In this sense, these conditions are a reflection of Sorokin’s principle of immanent change. He also posits that the attributes and ubiquity of the new infrastructure, known as the Internet of Things (IoT), by design and structure undermines core principles on which the present capitalist model is based.
Secondly, he asserts that these networked, lateral and distributed arrangements privilege relationships over ownership, thereby creating conditions for economic activity and social arrangements that are systemically incompatible with the culture and ethos of the contemporary economy. In this way, the forces that have been unleashed are “both disruptive and liberating and are unlikely to be curtailed and reversed”.
Thirdly he submits that economic systems are situated within larger human systems and therefore, when an economic system changes, so do philosophies, institutions that exist within those systems, and ultimately social and cultural conventions. In this way Rifkin’s Theory of Post Capitalism steps beyond the disciplinary boundaries in which economic theory is normally considered and it links to the other transdiciplinary (and perhaps uni-disciplinary) theorising critical to the Third Industrial Revolution contention.
McAllum then offers Macro-historical Commentary:
The unsustainability of economic systems and their role in civilisational change have preoccupied all macrohistorians and many contemporary transformational theorists. Unlike Marx and Gramsci, who theorised over the ownership arrangements of the capitalist system, perhaps only Sarkar, among the macrohistorians, comes closest to offering an alternative economic model that is ‘distributed by design’. For Sarkar, like Rifkin, unabated accumulation and misuse of wealth is a central problem. The goal, in his narrative, is for a good society to provide all individuals with the basic requirements of life in the way that Ghandi’s ‘Swadeshi’ defines them, and to ensure that in the process, wealth is used for benefit and not hoarded. However, for Sarkar, economy and economic growth has a subordinated role as it only exists “to provide physical security such that women and men can pursue intellectual and spiritual development”. Spengler also rails against ‘money thought’: “the grand legacy of the Faustian Soul”. He maintains that little attention has been paid to the presumptions that underpin the thinking of Hume and Adam Smith: that its privileging of materialism ignores the soul that is at the heart of culture.
The consequence is that “the heroic and the saintly withdraw into narrower and narrower circles and the cool bourgeois take their place. [Thus] in the frictions of the city, the stream of being loses its rich form” and the culture inevitably declines. The only way out of this crisis is for “power to be overthrown by another power”. The question this assertion poses is: is a change in system conditions, as described by Rifkin, sufficiently powerful to effect the revolution Spengler prescribes, or will some other more explicit agency be required? The linkage or otherwise of economy to ‘soul’ also preoccupied Toynbee.
– Western humanity [sic] has bought themselves [sic] into danger of losing their souls through their concentration on a sensationally successful endeavor to increase material well being. If they [sic] were to find salvation they [sic] would only find it only in sharing the results of material achievement with the less materially successful majority of the Human Race.
This was not an argument by Toynbee for some kind of socialism; indeed to the contrary. Rather it is questioning ‘where to next?’ for the ‘psychic energy’ that has been capitalism’s driving force and which fashioned the industrial revolution, for as Schumpeter suggests “stabilized capitalism is a contradiction in terms”.
Similar themes to those expressed in Rifkin’s Theory of Post Capitalism are emerging among some modern transformational theorists. They have, of course, the advantage of contemplating the contemporary condition in ways that earlier macrohistorians could not. While their views, in relation to understanding Rifkin, will be explored in some detail later in this thesis, a number do contemplate the end of capitalism, the emergence of the distributed or collaborative economy and a future of access, not ownership. This suggests that Rifkin’s Theory of Post Capitalism has both intellectual precedent and contemporary support.”
(2) * Situating the Post Capitalist Proposition
Michael McAllum writes:
Rifkin, in his latest work The ((Zero Marginal Cost Society ? )), extends his earlier argument that capitalism will move from a vertical to lateral orientation to assert:
[T]he Capitalist era is passing and although the indicators are still soft and largely anecdotal, the Collaborative Commons is ascendant and by 2050 it will most likely settle in as the primary arbiter of economic life.
He contends there are essentially three reasons for this.
Firstly, with the use of network technologies the capitalist system is increasingly able to produce constructs of simplification and efficiency (competitive advantage) that enable near zero marginal cost and “if that were to happen the lifeblood of capitalism [margins] would dry up”6. This proposition suggests that this drive for competitive advantage is inherent in the system and, as each new advantage is obtained, the margins available reduce. Logically, this will reach a point when there is no margin left and the system is at its limits. When that occurs, then the only option is to expand the market into areas of what were considered societal responsibilities (e.g. prisons, health, security) 700 until the same point in the process occurs again.
Secondly, the entropic bill for industrial capitalism has arrived, because the economic model and its related energy system see environmental effects as unaccountable externalities. Consequently, the energy systems on which capitalism depends must rapidly change if Collapse is to be averted, thus “throwing the whole economic model into question”.
Thirdly, Rifkin proposes the emerging Collaborative economy is developing as a viable, perhaps even preferred, alternative to a capitalist model that is, by design, systemically inequitable.
While some of Rifkin’s propositions are still evolving, a prime concern of this thesis (as has been stated) is to determine if there is also a contemporary body of literature that supports his fundamental proposition that the system is at is limits. An exploration of Rifkin and Transformist contentions is important because an understanding of the outcomes (not proof!) to these propositions has implications for mentality, philosophy and narratives of engagement with a global community who currently do not see any viable alternative to a mythology that argues (in a rephrasing of a Churchillian quote on democracy) “as a system, capitalism is not perfect but it is far better than the alternatives”. However, it should be noted that, to date, the use of ‘alternative’ has always been contained within the boundaries of the contemporary discourse (capitalism v socialism). ‘Alternative’ as it is used here describes a transformational imperative, one that stands outside of contemporariness because either the system is at immanent limits, or a better option is in prospect.
* The Post Capitalist Option
As Rifkin’s articulation of his current (evolutionary) understanding of post capitalism architecture has been detailed earlier in this thesis, what remains unresolved is the support that it has. Two issues in particular serve as useful points of reference for considering this support: changes in the dynamics of economic and power relationships, and a repurposing of markets from accumulation to exchange.
Rifkin contends that a reconstitution of the relationships between the actors is central to the post capitalist proposition of how value is created and captured. In post capitalist literature there is explicit support for the proposition that in the current market accumulation model the emphasis is hierarchical, one of control of labour and capital, whereas in the post capitalist system the emphasis is on participation and sharing. This is what Rifkin terms privileging of collaboration over competition. Kostakis and Bauwens describe it as “a model where the relations of production will not be in contradiction with the evolution of the mode of production”. This is now possible because network technologies enable socio-technological arrangements that are not only able to compete (and often outperform), in terms of transaction costs with hierarchical entities, but by design they create a framework for social as well as personal benefit.
The explicit rejection of the mechanistic model permits the development of relationship webs that are unconstrained by previous modes of control as “there is a structural connection between the key defining properties of commons-based peer production and the possibility of engagement in creative, autonomous, benevolent and public spirited undertakings”. The viability of such networks also provides for the development of alternatives for those Dussel describes as they who are not.
…an internal exodus by which the autonomous production of social life is made increasingly possible (with non cooperation with the dominant capitalist model) and an outer movement that can muster resistance and strike at the heart of power.
This different arrangement also reconfigures the investor-producer-consumer relationship; what Rifkin terms prosumers. These are either citizens or consumers who have an active role in more than one aspect of the value creation process (hence prosumer) whereas typically, involvement has been only at the point of purchase. Depending on the nature of the value creation process this relationship may focus on how work is done (as exemplified in 3D printing), where and how consumers can give as well as receive (evident in smart grid power production), or in decision making (e.g. by investing and then buying particular types of music they like). It is also encouraging a radical rethink in how services like health are delivered. “The consequence is a new decentralisation of organisation whose base will, in chosen and spontaneous groups, fulfil certain functions and whose membership will be overlapping and not exclusive”. The attractiveness of the ‘prosumer’ archetype is near-zero information sharing costs; little fixed cost prior to production; the ability to customise rather than prototype; no waste, ‘just in time’ production; and the development of relationships that encourage innovation. In essence it is a disruptive logic that redefines value creation in ways that privilege economies of one over scale; can be conceptualised as a ‘space of flows’ across a multitude of public good and private interactions; and distributes control among the actors in a manner that encourages collaboration rather than advantage. Finally, the significance of this technology-relationship congruence in a post capitalist model is that it provides a platform, consistent with Rifkin’s theorising, through which critical environmental, social and economic issues might be addressed.
One of the dearly held mythologies of the capitalist model is that the market is a neutral, non-value driven ‘invisible hand.’ Proponents of markets for exchange, not accumulation, differ. They argue current markets are capricious, ownership-centric and exhibit all the system tensions described above. Instead they propose new models of cooperation (microfinance, co-operative infrastructure, decentralised energy) that operate in pseudomorphic-like arrangements within the existing system as prototypes of market commons. These Commons, manifestations of lateral power, are potentially spaces that “provide opportunities for virtuous behaviour, ones that are more relevant to virtuous individuals and (therefore) the practice of effective virtuous behaviour may lead to more people adopting these virtues as their own”. These are, as Wallenstein suggests, one of the alternatives for a world in a period of structural chaos. They point to a future where the rights of the group, as well as those of the individual, are a permanent feature of society. This evolution of post capitalism is not simply the adaptive evolution of capitalism as propounded by Kaletsky, Picketty and Bryjolfsson, and one that Rifkin in earlier works termed distributed capitalism. Rather, it represents a systemic break, an acceptance that the model has little adaptive capacity left. It makes available through access models what previously could only be owned, be that physical property or knowledge. What emerges, Mason describes as “new forms of society that (through networks) prefigure what comes next”, and Rifkin characterises as ‘ zero marginal cost society’ that can take the human race from an economy of scarcity to an economy of abundance over the course of the first half of the twenty-first century”.
* Conditions for success of a Post-Capitalist Transformation
However, using a macrohistorical framing, this thesis has deconstructed Rifkin’s narratives into seven theories using CLA as a framework for that deconstruction. It asserts that each of these theories, acting in ways that reinforce the others, provides a logical and coherent, but linear, narrative. It also suggests that these theories (of limits, discontinuous change, stages of history, empathic consciousness, leadership, post capitalism and transformation) explore layers of reality that, while concentrating the gaze on the near future, require consideration of reality that is ‘beyond the litany’ of that gaze. It is postulated that these considerations reveal a range of challenges and tensions that significantly impact both the transition and transformation Rifkin is proposing.
These include the following:
o The entropic effects (the environmental crisis) of the industrial economy cannot be resolved inside an economic system that privileges ‘growth’ and ‘quantity of life’ as prime drivers of society.
o New energy and communication technologies, acting as ‘infrastructure’, are nomothetic in their nature and influence. As such, they challenge the continuation of mechanism and vertical power, and they privilege post-carbon futures, ecological thinking and collaboration.
o At the core of the (theory of) revolution is a reconception of time, form and space that will have three effects. The first is a contest between competing senses of reality in the short term (mechanism v collaboration). The second is to actualise the design of transformed social, economic and institutional fabric so that it does not recreate the issues that created the ‘crisis of limits’ in the first place. The third will include in that design an accommodation and acceptance of multiple senses of time in a way that no one sense of time is more important than any other, but also in a way that any given sense of time does not imperialise itself at the expense of these others.
o If a shift in the nature of empathic consciousness is fundamental to the success of both transition and transformation—that is, from a psychological (individualistic) sense to a planetary level—then it needs to be complemented by philosophical approaches that are ‘beyond the horizon’ of modernity: a way of thinking that does not put the Western episteme, nor the role of humans as masters-of-nature, at the center of the discourse. This reconstitution of identity requires a rethinking of ‘presence’ or being-ness.
Given these challenges, the success of any transition and transformation will consequently be conditional on three dynamics: new kinds of leadership; a different economic model; and the speed of transition.
o As a result of the shift from vertical to lateral power, leadership will necessarily become distributed in scope, and both networked and collaborative in nature (a new cosmopolitanism that can be localised). By definition it will privilege partnership over dominator models, and because of the nature of partnership, it will have many forms.
o The future will require the development of ‘post-capitalist’ economic models that replace a contemporary system that cannot either confront the (unsustainable) limits it has created, nor the consequences of zero margins that many technologies now enable. This will see markets of accumulation replaced with ‘post-growth’ markets of exchange; self-reliant models developing in a revitalised civic sector; and ownership models giving way to ‘access and use’ models.
o The success, though, of this transition will be conditional on its speed. If it fails to occur in a timely fashion, the entropic effects will rapidly overwhelm whatever progress has been made towards a new Collaborative Age.
Rifkin’s Third Industrial Revolution is therefore conditional. It is an argument that, whilst focused on the near-term future, is binary in its options (Transform or Collapse). Consequently, one of the benefits of placing this narrative within the wider macrohistorical discourse has been to identify other possibilities that might be between, or even outside of, the spectrum Rifkin describes.”
More and fuller excerpts here.