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The End of Capitalism

July 19, 2015

The other day, I ran across an article in The Guardian with the title The end of capitalism has begun.  It’s a long article, summarizing a book.  As I read it, I found I agreed with some statements, but disagreed with others.

The author’s conclusions about history seemed reasonable.  He states that the dream of the traditional socialists was to defeat capitalism, but instead the socialist movement collapsed.  The 2008 market collapse did deal a blow to capitalism.  Many economies are stagnating.  The solutions are not working.  Of course, any system based on continuous growth can’t be sustainable.  Austerity seems to be a cure that’s worse than the disease.

It’s true that traditional capitalism suppressed the working class.  After all, labour was a major cost for the company.  I did read someplace about the automobile industry.  Real wages have stayed the same over 30 years.  In spite of strong labour unions, wages for workers in this industry have barely kept ahead of inflation.  At the same time, productivity has greatly increased, with a corresponding decrease in the need for labour.  Labour is no longer a major cost.  Automation is responsible for this change.  Of course, unemployment also increased greatly.  Most jobs now seem to be low quality, with low wages, long hours, and no benefits.

The author also outlines in glowing terms a new way of living, and how we will achieve it with networks and information technology.  Everything will be free.  Don’t people still need food and housing?  Those can’t be free.

He also states that another crisis is coming, and this one will be different.  He’s predicting the future, at least in general terms.  Predictions have always been wrong, sometimes spectacularly wrong.  I have little confidence in predictions.

Information plays a big part in this article.  It can’t be valued in monetary terms.  Instead, its value resides in its usefulness.  However, the fact that companies hoard information means that it does have value.  If it’s useful, it will be useful to companies too.  They’ll use it to make money for themselves.

It’s true that invention creates intellectual property rights.  That’s why companies accumulate patents and copyrights.  They can become the most valuable asset of a company.  Governments aid in this endeavour by extending the monopoly period for both patents and copyrights, and by convincing other countries to do the same.

The idea that information is abundant and will be free seems to be a dream.  It will likely never be free like the air.  Software, even free and open software, always has a cost.  For commercial software, the vendor does the product support and supplies technical expertise and product development.  For free software, the purchaser has to provide all of those services.  “You get what you pay for” is still true, and you do have to pay for it.

The aim of this new world order seems to be zero costs for products and zero need for work.  Is this the bright future we must imagine?  I have some doubts.


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