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Jeremy Rifkin - The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism

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In The Zero Marginal Cost Society,New York Times bestselling author Jeremy Rifkin describes how the emerging Internet of Things is speeding us to an era of nearly free goods and services, precipitating the meteoric rise of a global Collaborative Commons and the eclipse of capitalism.

Rifkin uncovers a paradox at the heart of capitalism that has propelled it to greatness but is now taking it to its deaththe inherent entrepreneurial dynamism of competitive markets that drives productivity up and marginal costs down, enabling businesses to reduce the price of their goods and services in order to win over consumers and market share. (Marginal cost is the cost of producing additional units of a good or service, if fixed costs are not counted.) While economists have always welcomed a reduction in marginal cost, they never anticipated the possibility of a technological revolution that might bring marginal costs to near zero, making goods and services priceless, nearly free, and abundant, and no longer subject to market forces.

Now, a formidable new technology infrastructurethe Internet of things (IoT)is emerging with the potential of pushing large segments of economic life to near zero marginal cost in the years ahead. Rifkin describes how the Communication Internet is converging with a nascent Energy Internet and Logistics Internet to create a new technology platform that connects everything and everyone. Billions of sensors are being attached to natural resources, production lines, the electricity grid, logistics networks, recycling flows, and implanted in homes, offices, stores, vehicles, and even human beings, feeding Big Data into an IoT global neural network. Prosumers can connect to the network and use Big Data, analytics, and algorithms to accelerate efficiency, dramatically increase productivity, and lower the marginal cost of producing and sharing a wide range of products and services to near zero, just like they now do with information goods.

The plummeting of marginal costs is spawning a hybrid economypart capitalist market and part Collaborative Commonswith far reaching implications for society, according to Rifkin. Hundreds of millions of people are already transferring parts of their economic lives to the global Collaborative Commons. Prosumers are plugging into the fledgling IoT and making and sharing their own information, entertainment, green energy, and 3D-printed products at near zero marginal cost. They are also sharing cars, homes, clothes and other items via social media sites, rentals, redistribution clubs, and cooperatives at low or near zero marginal cost. Students are enrolling in free massive open online courses (MOOCs) that operate at near zero marginal cost. Social entrepreneurs are even bypassing the banking establishment and using crowdfunding to finance startup businesses as well as creating alternative currencies in the fledgling sharing economy. In this new world, social capital is as important as financial capital, access trumps ownership, sustainability supersedes consumerism, cooperation ousts competition, and exchange value in the capitalist marketplace is increasingly replaced by sharable value on the Collaborative Commons.

Rifkin concludes that capitalism will remain with us, albeit in an increasingly streamlined role, primarily as an aggregator of network services and solutions, allowing it to flourish as a powerful niche player in the coming era. We are, however, says Rifkin, entering a world beyond markets where we are learning how to live together in an increasingly interdependent global Collaborative Commons.

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Additional Praise for The Zero Marginal Cost Society An amazing work - photo 1

Additional Praise for The Zero Marginal Cost Society

An amazing work.... This insightful, surprising, and practical book helps us understand how the emerging Internet of Things is driving extreme productivity, the rush to a near zero marginal cost society, and the rise of a new economic paradigm. Rifkin solves the puzzle of what companies, nonprofit organizations, and governments need to do to reposition themselves on the new Collaborative Commons. The book is a must read for every citizen and decision maker.

Jerry Wind, the Wharton School

Free-market traditionalists have trouble recognizing that the future of governance and economics lies with the Commonsa world of collaboration, sharing, ecological concern and human connection. Jeremy Rifkin deftly describes the powerful forces that are driving this new paradigm and transforming our personal lives and the economy. A highly readable account of the next big turn of the wheel.

David Bollier, author of Think Like a Commoner:
A Short Introduction to the Life of the Commons

Brilliantly tackled.... Rifkin describes how the dramatic lowering of transaction, communication, and coordination costs allow the global scaling of small group dynamics, fundamentally changing the choices that humanity can make for its social organization. Read it, rejoice, and take action to build the new world in which the market and the state are not destroying the Commons, but aligned with it.

Michel Bauwens, founder of P2P Foundation

Jeremy Rifkin has always been ahead of the curve. In The Zero Marginal Cost Society, Rifkin takes us on a journey to the future, beyond consumerism to prosumers who produce what they consume and share what they have on a Collaborative Commons, a contemporary expression of Gandhis Swadeshi. His down to earth vision of democratizing innovation and creativity on a global scale, for the well-being of all, is inspiring and, equally important, doable.

Vandana Shiva, environmental activist and recipient of the Right Livelihood Award

If you want to understand why we are in the midst of a massive paradigm shift from an age of top-down, centralized institutions to a world of distributed and collaborative power, I would highly recommend reading Jeremy Rifkins new book. He clearly joins the dots on how the likes of 3D printing, crowdfunding, and online education platforms are all connected and describes the disruptions that lie just around the corner for most sectors.

Rachel Botsman, author of Whats Mine is Yours:
How Collaborative Consumption Is Changing The Way We Live

Jeremy Rifkin understands that its people and communities who are at the heart of the new economic paradigm. People all over the world are building the collaborative economy and Rifkins thoughtful analysis further illustrates that this is an idea whose time has come.

Natalie Foster, executive director of peers.org

The
Zero Marginal Cost Society

The
Zero Marginal Cost Society

The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism

Jeremy Rifkin

The Zero Marginal Cost Society The Internet of Things the Collaborative Commons and the Eclipse of Capitalism - image 2

The Zero Marginal Cost Society The Internet of Things the Collaborative Commons and the Eclipse of Capitalism - image 3

THE ZERO MARGINAL COST SOCIETY

Copyright Jeremy Rifkin

All rights reserved.

First published in 2014 by PALGRAVE MACMILLAN in the U.S.
a division of St. Martins Press LLC, 175 Fifth Avenue, New York, NY 10010.

Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS.

Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world.

Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries.

ISBN: 978-1-137-27846-3

Library of Congress Cataloging-in-Publication Data

Rifkin, Jeremy.

The zero marginal cost society : the internet of things, the collaborative commons, and the eclipse of capitalism / Jeremy Rifkin.

pages cm

ISBN 978-1-137-27846-3 (alk. paper)

1. Capitalism. 2. Cost. 3. Cooperation. I. Title.

HB501.R555 2014

330.126dc23

2013033940

A catalogue record of the book is available from the British Library.

Design by Letra Libre

First edition: April 2014

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

Contents

Part I

The Untold History of Capitalism

Part II

The Near Zero Marginal Cost Society

Part III

The Rise of the Collaborative Commons

Part IV

Social Capital and the Sharing Economy

Part V

The Economy of Abundance

Acknowledgments

I would like to thank Lisa Mankowsky and Shawn Moorhead for the extraordinary work they did in overseeing and editing The Zero Marginal Cost Society. Virtually every book is a collaborative effort. An authors effectiveness depends, to a great extent, on the individuals who work with him in the preparation of a manuscript. Mr. Moorhead and Ms. Mankowsky are a dream team. Mr. Moorhead paid particular attention to ensuring the proper integration of themes and conceptual details throughout the book. Ms. Mankowsky focused on ensuring a smooth editorial flow throughout the narrative and consistency in the presentation. Their dedication to the project, keen editorial advice, and wise counsel were instrumental in shaping the final content. Their contributions can be found on every page of the final book.

I would also like to thank Christian Pollard, who not only assisted in the editorial preparation of the book, but who also developed an elegant marketing and outreach campaign for its publication.

We had the opportunity of working with some very talented interns during the two-year preparation of The Zero Marginal Cost Society. Their contributions added significantly to the value of the final work. Thanks to Dan Michell, Alexandra Martin, Jared Madden, Elizabeth Ortega, James Partlow, Shuyang Cherry Yu, James Najarian, Daniel McGowan, Gannon McHenry, Kevin Gardner, Justin Green, and Stan Kozlowski.

Id also like to thank my editor, Emily Carleton, at Palgrave Macmillan, for her enthusiasm for the project and her many insightful editorial suggestions along the way that helped hone the manuscript. Thanks to my publisher, Karen Wolny, for her unflagging support throughout the process.

Finally, as always, Id like to thank my wife, Carol Grunewald, for the many fruitful conversations during the preparation of the book that helped shape my thinking and tighten the arguments in the text. Quite frankly, Carol is the best editor and wordsmith Ive ever known.

Writing this book was a pleasure and a true labor of love. I hope readers will enjoy the book as much as I enjoyed writing it.

Chapter One

The Great
Paradigm Shift from
Market Capitalism to the Collaborative Commons

T he capitalist era is passing... not quickly, but inevitably. A new economic paradigmthe Collaborative Commonsis rising in its wake that will transform our way of life. We are already witnessing the emergence of a hybrid economy, part capitalist market and part Collaborative Commons. The two economic systems often work in tandem and sometimes compete. They are finding synergies along each others perimeters, where they can add value to one another, while benefiting themselves. At other times, they are deeply adversarial, each attempting to absorb or replace the other.

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