One reason I'm interested in how we measure progress is that the economy is changing in ways that makes the concept of some economic statistics obsolete. James Heskett, Professor at Harvard Business School writes about this new economy, drawing on a book by Jeremy Rifkin, called The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. Heskett explains:
“An important driver is the Internet of Things that connects information about everything and everybody on a real-time basis, providing all of us with a wealth of information that will accelerate productivity gains and encourage collaboration and sharing on what Rifkin terms a “collaborative commons.” As marginal costs approach zero, the driving forces of capitalism—profit and investment—are neutered. As a result, a social sector that doesn’t rely on profit will play a larger role in the creation and distribution of goods and services, becoming a more significant employer in the process.
How about employment? Will a post-capitalist society create or destroy jobs? For example, Airbnb now lists on its site more than 600,000 accommodations, from rooms to sofas, with choice locations (even if on a sofa) going for as little as $25 per night. Nightly rentals are beginning to exceed the volumes of the largest hotel chains. What happens if the chains, with much higher marginal costs, are forced to cut back on employment? What are the implications for manufacturing if we are able to manufacture many of the things we need on our 3-D printers with recycled materials? Will the Internet of Things and “collaborative commons” enable even greater productivity and efficiency leading to fewer jobs? Or do these innovations foster self-employment in renting our rooms or printing our products? As marginal costs and prices approach zero, how much income are we going to need anyway? How will this affect the distribution of wealth?”
freeimages.com