How automation and technology may overcome the problems of capitalism, eventually.
Years ago I read an interesting book called the ‘Zero Marginal Cost Society’ by Jeremy Rifkin. The book outlines a future where ‘things’ will become so cheap through automation and technology such that the incremental cost of producing an additional unit of anything will be negligible. This, the author predicts, will usher in a new age where ‘things’ will be free and the need for money will cease to exist. Instead, people will become more valued for and fulfilled through their social and artistic pursuits.
It’s a very ‘out there’ concept.
An unrelated but recent topic in the news got me thinking about this concept again – unlimited bond buying. Stay with me. Unlimited bond buying is the process of central banks buying government bonds with cash which the government uses to stimulate an economy. We’re seeing this happen now at unprecedented levels to support humanity through the coronavirus crisis. The government needs cash, the Bank of England buys bonds, the government provides additional cash support through schemes such as the Job Retention Scheme and grants. This is a very simplistic summary of what is happening today.
The problem with unlimited bond buying is that, in my opinion, the debt will never fully be repaid sufficiently to stave off inflation in the very long term. Prices and inequality will continue to rise long term, though they didn’t have a choice given the grave consequences today.
So what’s the link?
Unlimited bond buying and stimulus is at odds with the utopian zero marginal cost society that Jeremy Rifkin predicts. Why if we are trending toward a future without a need for money do we appear to be dependent on an ever increasing supply? Paradoxically the acceleration towards a money-less world will require a lot more of it to get there – the capital intensive nature of technological disruption, population increase with wealth concentration and the threat of black swan events – until the basic needs for life are automated – shelter, food and health.
In a far-flung future where the incremental cost of basic needs are free, incentivisation through money will diminish. An accidental trajectory, but plausible end of, capitalism. We simply won’t need stimulus, more money, but you will need to live to 197,323, be a dancer and good at painting to be welcomed on board the driverless flight to utopia.
Thanks for reading.