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The end of capitalism has begun, but what will replace it?

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The end of capitalism has begun and we are entering the postcapitalist era. At the heart of this transition is information technology, reimagining working and the sharing economy. The 1% has gotten richer and the environment is in crisis. Capitalism has failed the world. Why not imagine a utopian society? Why not imagine an economic model based on abundance instead of scarcity?

Senior sociology scholar at Yale University, Immanuel Wallerstein, thinks capitalism is collapsing. “Modern capitalism has reached the end of its rope. It cannot survive as a system,” Wallerstein said. “And what we are seeing is the structural crisis of the system. The structural crisis goes on for a long time. It really started more or less in the 1970s and will go on for another 20, 30, 40 years. It is not a crisis of a year or of a short moment, it is the major structural unfolding of a system. And we are in transition to another system and, in fact, the real political struggle that is going on in the world that most people refuse to recognize is not about capitalism – should we have or should we not have it – but about what should replace it.”

Modern capitalism is dependent on what Ursula K. Le Guin calls the perpetual growth metaphor, “Capitalist growth, probably for at least a century and certainly from the turn of the millennium on, has been growth in the wrong sense. Not only endless but… Growth as in tumor. Growth as in cancer.” Our system is dependent on us believing that more capitalism is better. We spend so much time working for a living, that we don’t get to do too much living. Even when we are not engaged in selling our labor at a job, we are still sacrificing our own well-being for the sake of capitalist growth.”

In the past 25 years three major changes have taken place in information technology. First, it has reduced the need for work, blurred the edges between work and free time and weakened the relationship between work and wages. The coming wave of automation and robotics will hugely diminish the amount of work humans are needed for.

Second, information is destroying the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defense mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last.

Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organizations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.

One sign that post capitalism is being ushered in is the explosion of the new “sharing economy.”

While the world of monopolized information and surveillance created by corporations and governments still exists, a different dynamic around information is emerging alongside it: information as a social good, free at the point of use, incapable of being owned or exploited or priced.

In “Fragment on Machines” Marx imagines an economy in which the main role of machines is to produce, and the main role of people is to supervise them. He was clear that, in such an economy, the main productive force would be information. That is exactly what is going on right now in factories in China and hotels in Japan. There are only a few people in a robot-run factory in China right now, and they are only there to supervise the robots.

The question now is who controls what Marx called the “power of knowledge”. In an economy where machines do most of the work, the nature of the knowledge locked inside the machines must, he writes, be “social”.

In these musings, not published until the mid-20th century, Marx imagined information coming to be stored and shared in something called a “general intellect” – which was the mind of everybody on Earth connected by social knowledge, in which every upgrade benefits everybody. In short, he had imagined something close to the information economy in which we live. Further, he wrote, its existence would “blow capitalism sky high”.

Collaborative production, using network technology to produce goods and services that only work when they are free, or shared, defines the route beyond the market system. Info-capitalism has created a new agent of change in history: the educated and connected human being. Young people all over the world are breaking down 20th-century barriers around sexuality, work, creativity and the self. Post-capitalism will be shaped by the emergence of a new kind of human being.

The battle today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy. Economic freedom will be born out of abundant information, non-hierarchical work and the dissociation of work from wages.

A postcapitalist era will probably be slowly ushered in, but Karl Marx had a more dramatic view of capitalism’s demise. Karl Marx thought that capitalism created two competing classes of people. One, was the bourgeoisie who owned and controlled the means of production and hired wage laborers. The other was the proletariat, who were common workers who owned nothing but the right to sell their own labor. Capitalism’s very nature would ensure that eventually, these classes would struggle against one another to the point where the class of workers would get large enough and oppressed enough that it would overthrow the bourgeoisie, seize the means of production from it and end the economic system known as capitalism. The system of socialism would be ushered in and gradually evolve into pure communism.

Capitalism’s endless search for profit at the expense of both human and planetary well-being must be replaced with something better. Some people have said that if we don’t destroy capitalism, it will destroy us.

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“The end of capitalism has begun, but what will replace it?”