Mini-review of The Zero Marginal Cost Society by Jeremy Rifkin

Capitalism is waning, Rifkin argues in The Zero Marginal Cost Society, and it will be replaced by a Digital Commons world in which nearly everything we need, including energy and physical goods, are so close to free as to be negligible. I read this book thoroughly after hearing an NPR interview with Rifkin, and in particular his claim that exponential speedups in technology are driving the cost of energy and goods towards zero.  This book is filled with naivete regarding technology and regarding the physical world. It feels to me as if someone who grew up inside the headspace of a computer- in the world of bits and bytes- came forth into the physical world, then assumed that everything they learned inside a single computer applies to our actual universe.  Let me be systematic below. Let’s write a quick primer for any digital progeny out there. Read this while still trapped in a computer universe:


1. Capitalism isn’t dying, it’s creating ever larger inequality.

Rifkin’s thesis that capitalism is dying thanks to exponentiality, free information access and massive sharing, fails to note the evidence that capitalism is not only surviving, but it is prospering by further concentrating wealth and fomenting inequality. We released a simple visual last week, the Explorable Inequality website, based on the World Top Incomes Database from the Paris School of Economics. Rifkin’s counter-argument is that car-share services demonstrate how people no longer feel the need to own a car, and thus the new innovation of car-sharing unlatches our materialism. While I agree that we can share information, and that networked shared cars are a wonderful innovation; the truth of the matter is that information has value and indeed generates wealth. Behavioral analytics, memberships and social media all become monetized today far more efficiently than ten years ago. The digital commons has been supplanted by the corporate on-line economy to a very large degree, and this, in turn, bleeds into the physical world thanks to robotic sensors and actuators. Drones will not free us from Capitalism and materiality; rather, they will present new avenues to companies around the world for monetization.

2. Renewable energy is not free energy.

Rifkin writes:

Renewable energy, like information, is nearly free after accounting for the fixed costs of research, development and deployment.

He goes on to quote Kurzweil, who predicts that free solar energy will provide all our energy needs by 2028; and Rifkin conservatively extends the estimate to 2040. While it is true that renewable processes can cost less through increased scaling in production, what is not true is that they are free in any sense of the concept. Maintenance on wind turbines and solar panels, as well as infrastructural costs, are high. These systems have moving parts, get hot, age ungracefully. The concept of free energy is something I have never heard from my Energy and Public Policy research friends- this is a new, alien concept with little basis in reality. 

The argument Rifkin uses has at its basis exponentiality. He suggests that innovation is inherently exponential, like computer speed. My counterargument would be to point out that nearly everything except clock speed is not at all exponential. Consider: battery innovation, drug research, fuel efficiency, material strength. None of these areas of innovation has anything to do with regular doublings. Rather, innovation moves in fits and starts, with hard work yielding important aha moments from time to time.  Solar panels, turbines, wave power– they all have massive maintenance headaches, just like coal plants and nuclear plants, and none of them are transformed by exponential computation.

3. 3D printing is not free.

Rifkin views 3D printing as harbinger of time when scarcity will go extinct. His view is that, since some 3D printers can print many of their own parts; and since some other printers can use relatively cheap materials like paper, therefore nearly all aspects of 3D printing, from the printers to the designs (on the digital commons) to the feedstock will eventually tend toward a cost of zero per printed artifact. This is where mechanical engineers and materials scientists come in, explaining that mass production is always cheaper than individual printing; that materials always cost money- especially the materials we need to build real things. Yes, you can 3D print a car, sort of. It’s not really a car, though. It cannot handle crashes, bumps, luggage, weight, potholes or fatigue. It’s more art than product. 3D printers are wonderful founts to new forms of creativity. But they do not replace the economies of scale on which our production systems are based.

You will ask, is there anything in Rifkin’s book with which I agree? Chapter 8, The Last Worker Standing, talks about automation and the patterns of job replacement by capital that are well-argued in many other texts. If you want more reading on this topic, I suggest The Second Machine Age, as it provides more detail and more source data so that you can draw your own conclusions regarding labor and automaton.

And yet even in Chapter 8, where Rifkin correctly points out that we have a dangerous dynamic enroute– massive decreases in job categories appropriate for us human being– even here, Rifkin goes optimistic at the end.  He suggests that the freeing of human labor in fact enables us to move beyond capitalism and to have truly outstanding quality of life. Let me quote:

A half century from now, our grandchildren are likely to look back at the era of mass employment in the market with the same sense of utter disbelief as we look up on slavery and serfdom in former times. The very idea that a human being’s worth was measured almost exclusively by his or her productive output of goods and services and material wealth will seem primitive, even barbaric, and be regarded as a terrible loss of human value to our progeny living in a highly automated world where much of life is lived on the Collaborative Commons.

This passage demonstrates his approach to futurism well– the future is different, and all our values and opinions will be born anew. But I simply don’t see it this way. If we are all absolved to do no labor, how will we provide for our families? And how will out sense of personal worth and identity be affected by that. Read some Kurt Vonnegut instead, and envision a possible future that Rifkin will not embrace. Fundamentally, Rifkin is confusing digital and physical realities- he is imagining us living in a digital playground, when the reality of life includes food, air, water, energy, sewage, disease. None of these are free, and none of these will become free anytime soon, not even in marginal cost.



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