Tuesday, March 18, 2014

Technology will marginalize the market economy, invigorate the sharing economy and nonprofits will become the norm.

In The Rise of Anti-Capitalism, Jeremy Rifkin posits a fascinating world in which the "Internet of Things" renders private ownership -- and the capitalist marketplace reliant on private ownership -- obsolete.  The resulting void is instead occupied by the sharing economy, characterized by the social commons devoid of private ownership and moderated [regulated or maintained is not acccurate] by Civil Society.  He does not advocate as much as predict.  He seems to say that access to information will eventually and inevitably transform our world into a cost-free society where anything can be had for practically nothing.  At first blush it would seem that nonprofits too would be obsolete in a cost-free world.  Exactly the opposite, according to Rifkin.  But before I get to that, I have always thought of Civil Society as the vehicle by which morality is injected into the amorality of capitalism.  Which is to say that capitalism presumes winners and losers.  Many must be poor so that a few can be rich.  Some must have absolutely nothing so that fewer still can have absolutely everything.  In a perfect system, what is fair about that is that everybody has exactly the same chance to have everything, or at least something more than nothing.  Nonprofits help ameliorate our guilt at having set up an imperfect system by which we know somebody will have nothing so that somebody else can have everything and presumably more can have something.  Nevermind for the moment that nothing and something are relative rather than absolute.  To have nothing or something in America, for example, might mean having something or everything, respectively, someplace else.  Anyway, in Rifikin's zero cost world Civil Society would be indispensable, not obsolete.  It will be Civil Society, essentially, that facilitates the allocation of resources in the main;  for profits will be the exception, allocating resources only to the very conspicuous or peculiar  consumer:

THE unresolved question is, how will this economy of the future function when millions of people can make and share goods and services nearly free? The answer lies in the civil society, which consists of nonprofit organizations that attend to the things in life we make and share as a community. In dollar terms, the world of nonprofits is a powerful force. Nonprofit revenues grew at a robust rate of 41 percent — after adjusting for inflation — from 2000 to 2010, more than doubling the growth of gross domestic product, which increased by 16.4 percent during the same period. In 2012, the nonprofit sector in the United States accounted for 5.5 percent of G.D.P.

 

What makes the social commons more relevant today is that we are constructing an Internet of Things infrastructure that optimizes collaboration, universal access and inclusion, all of which are critical to the creation of social capital and the ushering in of a sharing economy. The Internet of Things is a game-changing platform that enables an emerging collaborative commons to flourish alongside the capitalist market.

 

This collaborative rather than capitalistic approach is about shared access rather than private ownership. For example, 1.7 million people globally are members of car-sharing services. A recent survey found that the number of vehicles owned by car-sharing participants decreased by half after joining the service, with members preferring access over ownership. Millions of people are using social media sites, redistribution networks, rentals and cooperatives to share not only cars but also homes, clothes, tools, toys and other items at low or near zero marginal cost. The sharing economy had projected revenues of $3.5 billion in 2013.

 

Nowhere is the zero marginal cost phenomenon having more impact than the labor market, where workerless factories and offices, virtual retailing and automated logistics and transport networks are becoming more prevalent. Not surprisingly, the new employment opportunities lie in the collaborative commons in fields that tend to be nonprofit and strengthen social infrastructure — education, health care, aiding the poor, environmental restoration, child care and care for the elderly, the promotion of the arts and recreation. In the United States, the number of nonprofit organizations grew by approximately 25 percent between 2001 and 2011, from 1.3 million to 1.6 million, compared with profit-making enterprises, which grew by a mere one-half of 1 percent. In the United States, Canadaand Britain, employment in the nonprofit sector currently exceeds 10 percent of the work force.

The implications are staggering, especially with regard to the laws we implement to moderate our individual relationships with Civil Society.  Currently, those laws are are patterned after laws by which we regulate private enterprise.  Those laws are altered, clumsily in most instances, to the extent public rather than private benefit is the intended goal.  In the sharing economy, the laws will need to have their own identity; they will need to be written first; law as the enforcer of private ownership second and as the exception to the norm.  I need to think about this a little longer to really understand the implications.  And by the way, I am not hawking Rifkin's book on which the essay is based.  He makes a compelling case that as things become "free" civil society will dominnate (think about the demise of print media and the copyrighted music industry).  I just wonder what this will really mean for how we write our laws. 

dkj

http://lawprofessors.typepad.com/nonprofit/2014/03/technology-will-marginalize-the-market-economy-invigorate-the-sharing-economy-and-nonprofits-will-be.html

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