Issue #230
The rise of anti-capitalism
We are beginning to witness a paradox at the heart of capitalism, one that has propelled it to greatness but is now threatening its future: The inherent dynamism of competitive markets is bringing costs so far down that many goods and services are becoming nearly free, abundant, and no longer subject to market forces. While economists have always welcomed a reduction in marginal cost, they never anticipated the possibility of a technological revolution that might bring those costs to near zero. Industry watchers acknowledge the creeping reality of a zero-marginal-cost economy, but argue that free products and services will entice a sufficient number of consumers to purchase higher-end goods and specialized services, ensuring large enough profit margins to allow the capitalist market to continue to grow. But the number of people willing to pay for additional premium goods and services is limited. Now the phenomenon is about to affect the whole economy. Jeremy Rifkin, New York Times, 3-15-14.