Capitalism is dying

Thank you Domr for accepting the challenge. Within the last century, capitalism has transformed most of the world into an industrial economy and has indeed successfully increased our production and technological innovation. Though, capitalism, in the traditional sense, is now gradually withering to an end. To prove my argument, I will first walk through and explain the current events and trends.But first let me briefly identify what I mean by capitalism in the “traditional sense": 1. Top-down structure of corporations, institutions, and establishments2. Competition (me vs. them)3. Individualistic, autonomous, and self-interest driven4. Acquisition of property is the measuring stick of success5. Profit is priority In the past, every society and civilization’s economic success depended around three major components: a form of energy, communication, and mobility. These 3 major components ultimately determined the structure and complexity of a society. For instance, in the 1st Industrial Revolution (18th/19th century), coal and steam power were the form of energy, the printing press/telegraph were the form of communication, and locomotive was the form of mobility. During the 2nd Industrial Revolution (19th/20th century), oil and centralized electricity became the major the form of energy, radio and television were the form of communication, and the internal-combustion engine became the form of mobility.Fast forward to the 21st century, and we’re now at the onset of a “3rd Industrial Revolution” where a new shift in the 3 major economic components is occurring. In the last decade, the Internet has become the new way of communication. Millions of people are now communicating on their mobile devices through social network sites such as Skype, Twitter and Facebook. The form of energy is transitioning into renewable energy. Finally our mobility is transitioning into electric and fuel-celled cars, along with autonomous vehicles and drones for logistics. How are these new shifts in communication, energy, and mobility affecting capitalism?Simply put, the main disrupting force is technology. Let me explain.There is a great paradox embedded at the root of the capitalist system, which previously has been responsible for its remarkable success within the last century, is now leading itself to an end. This paradox is what’s called “marginal cost”. In capitalism, the goal of every business is to decrease their marginal cost so that they can maximize their profit, put out cheaper products for customers, and become more competitive against other businesses. With the advent of the Internet along with exponential growth of computing, marginal costs have been reduced to near zero. Since the Internet, people have started to share information with each other such as in Wikipedia, music/videos through Youtube and file sharing sites, ebooks, news through blogs and other social media sites nearly for free. This has caused many industries to go out of business such as newspapers, book publishing, music, etc. This phenomenon is what’s called ‘zero marginal cost’, a term coined by Jeremy Rifkin who is the author of the book “Zero Marginal Cost Society” among other several books.The Internet has allowed people to become prosumers instead of just consumers. They only have to pay for the initial fixed cost to put up a website, but the marginal cost thereafter is very small and sometimes zero. Additionally, because of the exponential growth of computers, fixed costs are also quickly decreasing. Information is essentially becoming free and anybody can learn almost anything online, which has also started to shake traditional educational institutions. It has been transforming what used to be a top-down structure of capitalism into a laterally-distributed, collaborative network platform. For the most part, the Internet has essentially become a shared-collaborative economy and is only growing. So how can businesses compete with all these free information goods? But it doesn’t stop there. EnergyMore people will be transitioning to renewable energy over the next decade. Renewable energy such as solar is following a similar exponential trend as the computer chips; it’s quickly becoming cheaper and more efficient. Additionally, renewable energy has zero marginal cost. After putting up the initial fixed cost of a solar panel, all of the energy it collects from the sun is 100% free. Every home and building will become a mini power plant producing its own green electricity and sharing the excess back into the grid. EU countries such as Germany and Denmark, as well as China have already been making a significant transition to clean renewable sources and laying out their infrastructure. Centralized power utility companies, especially in Germany are currently facing an existential threat and have been scrambling for new ways to keep profits alive. MobilityElectric and autonomous vehicles will soon become more common in the next decade. Currently, an electric car company called Tesla Motors has already begun leading the way with its Model S electric sedan, which has simply shocked the automobile industry. It has already gained many accolades such as the highest NHTSA safety rating of any car, as well as achieving a near perfect score in the Consumer Reports, claiming it’s the “best car we’ve ever tested”, and has become the best-selling luxury car in its first year. Yes they’re expensive for now, but in a few years a 3rd Gen model will be in the range of $35k USD which would completely change the game. Just as Apple’s iPhone revolutionized the mobile industry, Tesla is revolutionizing the automobile industry and is setting a whole new standard for other car companies to soon follow. This just shows the potential of electric cars and where transportation is ultimately heading. Internet of ThingsOver the next decade, this ‘zero marginal cost’ phenomenon will take over not just information goods, but soon physical goods and energy as well. The Internet is now expanding to what will soon become known as “the Internet of Things”, where almost every physical thing will be have a microchip and become connected to the network, feeding data. Again this is becoming possible with the exponential growth and price decline of computer chips. The Internet of Things is the hammer that will eventually nail capitalism to its coffin. It won’t happen overnight, but gradually over the next few decades. This Internet of things will ultimately converge the 3 major components altogether, the communication internet converging with the energy and transportation/logistics into one self-sustaining distributed interconnected platform. Our communication and transportation will be powered by the near-free energy from our renewable sources. Just as we are sharing information goods on the information Internet, we will be able to share our excess energy with each other through the energy Internet. Since the sun is not always shining and the wind is not always blowing, one part of the world where there’s plenty of sun during the day could share its excess energy to another part where it is night time and so on. Furthermore, an emerging technology called 3D printing is changing the manufacturing industry. In the near future, people will share and download the blueprint files of physical goods over the Internet, and “print” most of the items at home using their own 3D printer. 3D printers will allow the marginal cost of producing physical goods to drop to possibly near zero, especially now with 3D printers capable of using recycled materials. Automation and UnemploymentThe majority of jobs are going to be phased out in the next few decades due to automation. This trend has already been happening such as in car factories, self-checkouts in stores, etc. As technology progresses, eventually almost everything that can, will be automated by a machine or a computer software. So what does this mean for purchasing power???...Sorry, ran out of space...