First Things First: The Collapse of Capitalism

Capitalism cannot sustain its long-standing trajectory of gradual growth due to three significant disruptions arising from its inherent logic. These disruptions are:

1. Capitalism struggles to price free, abundant products and services.
2. It fails to generate demand among surplus workers.
3. It is incapable of accounting for externalities.

Let’s delve into the first disruption—abundance.

We are currently navigating a digital revolution that is giving rise to a digital economy. While this may seem innocuous, the first disruption is that markets cannot adequately manage digital products—and they never will. To illustrate this, we must briefly consider how markets determine prices under capitalism and why these mechanisms cannot function for digital goods.

How Prices Are Determined in Capitalism

Capitalist markets establish prices based on the law of supply and demand. This principle asserts that prices are dictated by the ratio of supply to demand. Thus, when supply surpasses demand, prices tend to drop. Conversely, when demand exceeds supply, prices rise. It is a simple concept.

While this pricing mechanism implies that prices fluctuate in response to supply and demand variations, there is one limitation: Prices cannot remain below production costs. Rational businesses will not operate at a loss, meaning that the cost of reproduction acts as a practical ceiling on how low market prices can fall. If prices dip too low, businesses may cease production, leading to supply shortages and subsequent price increases. For example, if producing a car costs $5,000, no manufacturer will produce it if the market price is only $4,000, as every sale would result in a loss.

Now, what happens to supply and demand in the market for digital products?

Digital products possess a unique characteristic—they incur no reproduction costs. Consider ebooks: once an ebook is uploaded to a server, it can be downloaded once or a million times without incurring additional costs for the producer. This presents challenges for markets in two significant ways. First, if reproduction costs are zero, there is no lower limit on prices; they can continue to decline until the product is offered for free. Second, supply becomes infinite. In other words, the scarcity that pricing relies on transforms into abundance. This means that under these conditions, the law of supply and demand can no longer accurately price products, leading prices to decrease until the products are free. Consequently, capitalism's foundational market function begins to unravel.

When ebooks first emerged, the publishing industry had to collude to establish minimum prices, which is not capitalism but rather a form of monopoly that faced legal repercussions.

This issue extends beyond ebooks and music; the entire economy is rapidly digitalizing and succumbing to the same abundance dynamics. All products are increasingly becoming digital. Robots provide labor at no incremental cost. 3D printers embed much of their value in digital plans. The same applies to artificial intelligence, solar panels, and other conversions from energy to matter, especially food. As products continue to incorporate more digital elements or become entirely digital (replacing traditional goods), markets for these products will collapse—similar to what occurred with ebooks.

The fallout is that when products are free, the entire rationale for capitalist investment disintegrates. Capitalists do not invest to sell free products, nor do they pay workers to produce goods that have no market price. Capitalism thrives on profit, but no profits can be realized in a market where pricing is nonexistent. Although the economy can tolerate a few categories of products collapsing in price, as digitalization permeates sectors like construction, automotive, clothing, and food production—capitalism ceases to function effectively.

Free labor from robots presents similar dynamics in the labor market, but instead of discouraging capitalists from producing, this dynamic disincentivizes workers from working. If work yields no income, the motivation to engage in it diminishes, leading people to exit the workforce.

Lastly, capitalism cannot account for externalities such as climate change, as it fails to allocate associated costs. Externalities manifest as pollution, systemic financial risks, social issues, disease, and wasted energy. Historically, capitalism has treated these externalities as unfortunate byproducts largely affecting others—downstream communities, governments, or marginalized populations. However, climate change represents a reckoning that mandates these externalities be addressed. No one can evade the repercussions—wealthy or poor, businesses, laborers, or consumers—everyone is affected. Capitalism's inability to allocate these costs means that when it does, the profitability of capitalist enterprises evaporates. Capitalists often socialize these costs through government taxation, but even with carbon taxes, this approach proves blunt and ineffective, leading to business failures. Capitalism was never designed to accommodate all these expenses.

The Inevitable Collapse of Capitalism

One might assume that, given these three realities—digitalization, automation, and climate change—capitalists would adjust their strategies. However, they face an inherent challenge: they cannot resist their impulses. The capitalist system compels all actors to constantly reduce production costs to enhance profit margins and maintain competitiveness. As a result, they will digitalize everything, automate labor as much as possible, and externalize all costs they can. The pressure to digitalize is relentless; businesses that don’t adapt risk obsolescence. The same applies to robotic production—any enterprise that fails to adopt robotics will struggle to compete. For businesses, incurring costs to address climate change renders them uncompetitive. Capitalism's laws compel actors to fuel its relentless momentum or perish. The drive to cut costs, eliminate labor, and externalize expenses renders collapse inevitable. Digitalization, robotic production, and the confrontation with externalities will perpetuate these three disruptions, ensuring that capitalism cannot halt its decline.

Transformation Opportunities: The Path to Postcapitalism

The potential for transformation lies in the swift adoption of postcapitalist principles. We must articulate, celebrate, and advance these ideals. While these transformations are inevitable, the well-being of humanity during this transition is not guaranteed. To summarize, the four transformations are:

1. Postcapitalist egalitarian networks replace capitalist hierarchical structures.
2. Postcapitalist voluntary participation replaces capitalist coercion.
3. Postcapitalist conversion replaces capitalist extraction.
4. Postcapitalist abundance replaces capitalist scarcity.

By supplanting outdated capitalist principles, new postcapitalist ideals offer the chance for a fundamentally different societal organization. While words can only convey so much, what do these concepts signify? How will they reshape our society?

Due to time constraints, I will focus on the new networked world as an example of how these changes will deeply impact culture.

Transformation 1: Embracing the Networked World

Capitalism has been characterized by the mechanistic worldview and hierarchical structures of office environments. These two metaphors shaped how humanity perceives the world. Nature was viewed as hierarchical, with humanity placed atop the pyramid. Corporations established offices to embody this hierarchy, independent of individual occupants. Society itself has been organized along hierarchical lines, as detailed in Isabel Wilkerson's book Caste. Hierarchy, it seems, pervades everything.

Accompanying hierarchy was the metaphor of the machine, which evolved into systems thinking. This perspective informed how inputs could be transformed into outputs, leading to the industrial frameworks that underpin capitalism today. Even holistic concepts, such as ecology and alternative healing, still cling to mechanistic notions.

Thus, mechanistic hierarchy dictated our worldview, forming capitalism's foundation. Modern corporations could not exist without the hierarchical office framework that arose from this mindset. Our exploitation of nature has been facilitated by viewing it as a soulless machine. As money became synonymous with hierarchy and mechanization, its accumulation epitomized our contemporary capitalist existence.

However, a new metaphor is emerging: the network.

Networks stand in stark contrast to hierarchy. Rather than dominance, networks emphasize connection. Rather than hierarchical offices that persist beyond individual occupants, networks consist of relationships and interactions among real people. In a hierarchy, the structure holds primacy; in networks, individuals matter most. When a person disconnects from a network, all their relationships dissolve.

As networks become the predominant means of societal organization, our entire perspective on the world will shift. In a hierarchy, power becomes the social currency, manifested through the authority of the office. In a network, influence becomes the currency, reflected in one's ability to shape opinions, ideas, and individuals. While hierarchy breeds competition for limited power positions, networks foster boundless connections and diverse influences. People will aspire to forge meaningful connections rather than seeking power over others.

Today's networks exemplify humanity's collaborative spirit in creating value. Consider open-source software, where global networks unite to develop valuable digital programs that are collectively owned and freely accessible. Yet, this represents just the nascent phase of potential.

In this light, networks cultivate an entirely different mental model of the world—one where power dynamics become nearly incomprehensible without a hierarchical framework. When the privilege of office dissipates, the notion of racial or ethnic supremacy loses its significance. In networks, influence is generated through connection, not dominance or coercion.

I do not suggest that the advent of networks will resolve all social issues—far from it. However, if networks replace hierarchy as our primary lens, we will witness significant shifts in social dynamics, organizational structures, political influences, and even our understanding of the environment.

What Does This All Mean?

Postcapitalism embodies a profound challenge within social theory today. It influences every facet of society—religion, social structures, politics, economics, social safety nets, military motivations, and business practices. Careers will transform. Cities will evolve. New lifestyles will emerge, making our present-day existence seem quaint in comparison to the past.

A new world will inevitably arise; the question remains whether it trends toward dystopia or offers opportunities for improvement. To steer this transition toward a better future, we must recognize and explore the exciting opportunities and innovative possibilities that abound.

The End of Systemic Fear

Consider the four principles underpinning capitalism: hierarchy, violence, extraction, and scarcity. How can one view the world through any lens other than fear? Some individuals manage to rise above this reality, reflecting their resilience and fortunate circumstances, but the pervasive atmosphere is one of anxiety—fear of inadequacy, fear of losing what one has, and fear of missed opportunities.

This fear is crucial to understand, as it fuels sexism, racism, homophobia, and xenophobia. It underlies conflict and competition, leading us to neglect our fellow humans, the natural world, and even our own lives in pursuit of unattainable security. Fear breeds anxiety, perpetuated by capitalism's hierarchical worldview, competition arising from scarcity, and the systemic violence inherent in the system.

What role does fear play in egalitarian networks, voluntary collaborations, conversion, and abundance? How can oppression persist without fear, scarcity, or competition for survival? Postcapitalism will fundamentally alter society's core principles, providing relief from fear. As fear diminishes, the machinery of systemic oppression can disintegrate.

Beyond eradicating fear, what will this new world resemble?

Let me offer a few examples before we transition to questions.

First, most of us currently rely on cars for transportation. Whether shopping, working, or socializing, car ownership is ubiquitous, necessitating parking, maintenance, and insurance. In a fully digitalized postcapitalist world, this paradigm will shift. Instead of owning cars, we will summon driverless vehicles at will. A simple text or app will summon a ride within moments, negating the need for parking lots, service stations, and insurance.

Second, nearly everything will be manufactured through 3D printing from digital blueprints. Presently, entire developments of 3D-printed homes are being constructed, cutting construction time by 90% at minimal costs. These homes require no lumber, utilizing poured concrete instead. While traditional elements like roofs, windows, and plumbing remain unchanged, these too will evolve. Adidas has pioneered factories that produce 500,000 pairs of shoes annually with minimal human oversight—only a handful of workers maintain the robots and 3D printers. The wave of automation is sweeping through fast food, automotive manufacturing, wind turbine construction, and various other sectors because labor is virtually free. Costs plummet, and competition necessitates adaptation.

Third, skeptics often ask, "What about food? You can’t consume digits!" While true, innovations like Solar Foods in Finland are changing the narrative. They are cultivating edible protein from carbon, electricity, and water—no plants or animals involved. By adding nutrients to feed microbes through fermentation, the result is Solein, an edible protein. The process resembles winemaking, where microbes are nourished with carbon and water instead of sugar. It takes merely three days to produce a batch of Solein, far more efficient than raising livestock. Solar Foods is a pioneering company aiming to market Solein by 2023.

Solein serves as a glimpse into the future of food production. We are learning to cultivate meat without livestock, and I anticipate seeing tomatoes and oranges grown without vines or trees. Meanwhile, indoor farming techniques are yielding greens like spinach and lettuce, monitored by AI and tended to by robots, leading to unprecedented productivity per acre. Eventually, these resources will be available on our kitchen counters, rendering traditional farms unnecessary.

Fourth, labor and income will lose their significance. When food production, energy generation, and essential goods can be produced from free digital blueprints using home-based 3D printers, what value does money hold? Why would anyone work? Instead of seeking employment, individuals will find meaning in pursuing endeavors that contribute positively to society.

The transformation extends beyond production methods and resource accessibility; society itself will be reshaped as hierarchy gives way to networks, coercion yields to collaboration, and scarcity is replaced by abundance.

For example, social theorists have long argued for systemic changes. Well, here it is—the system is evolving. When hierarchical relations dissolve in favor of networks, how will this impact issues like racism and sexism? Why perpetuate racism in a world devoid of competition for dominance? When abundance and home production of essentials become digitally feasible, how will poverty, class, and inequality be affected? I would argue that the potential exists to fundamentally reshape societal structures, and the possibilities are vast. We can envision solutions and influence our outcomes; if we do not, we may leave our future to chance.

In capitalist democracies, the power of voting every few years serves as the primary means of citizen engagement. Individuals take their votes seriously, contemplating their choices and grappling with compromises. It is rare for any single individual to align completely with another on every issue, leading to a struggle over what to prioritize in their voting decisions. This often results in one-third to one-half of people abstaining from voting, feeling unrepresented regardless of their choice.

However, in a postcapitalist political landscape, individuals may become more engaged in self-governance as they spend less time working. Representatives could become obsolete, with citizens voting more frequently. As voting becomes digital and electronic, there is little reason not to present every issue or proposal directly to the public. The concept of large bills laden with irrelevant provisions may become obsolete, allowing for direct votes on granular matters. Should representatives exist, their role would shift to developing proposals for public consideration rather than making decisions on behalf of the people. Representative democracy could become a relic, paving the way for genuine self-governance.

As societal institutions transform, religion will also feel the impact on its most cherished beliefs. For instance, the Protestant work ethic—a cornerstone of capitalist ideology—becomes untenable in a world devoid of jobs. Catholic doctrines emphasizing good works lose relevance in a context of true abundance. New interpretations will arise, fundamentally shaping the development of our postcapitalist future.

Among all these impending changes, perhaps the most significant is that postcapitalism offers a solution to climate change. It is likely the only viable resolution. The rationale is straightforward: the emergence of a postcapitalist system constitutes a comprehensive, involuntary climate solution. Many advocate for other approaches—degrowth, carbon taxes, reduced consumption, veganism, and more. However, the common thread is that all these require individuals to act against their preferences and necessitate leaders to rise above the system for the greater good. Postcapitalism, in contrast, establishes a new system in which everyone must exist, inherently addressing climate change.

How does this occur? First, the economic foundation of society is shifting. Abundant, free energy—especially solar, wind, and geothermal—is becoming increasingly accessible. Initial investments are necessary, but the incremental costs of these energy sources approach zero. Solar systems, once paid off, maintain 80% of their original capacity after 40 years. Capitalists will inevitably migrate toward these energy sources, as they make economic sense. The future will be dominated by electricity and digital systems, leading to the phasing out of combustion-based energy sources. No burning translates to no carbon emissions. No carbon emissions means no climate change.

Similarly, the digitalization of products will replace many manufactured goods until they can be 3D printed at home. Home production will dramatically reduce the need for transporting goods, with remaining transport handled by electric, driverless vehicles. Consumers will be unaware that these trucks are electric and autonomous; it will simply be the norm.

Postcapitalist digital networks will not only facilitate collaboration on global challenges, particularly climate change, but also enable political shifts like the direct democracy previously discussed. This would liberate political decision-making from concentrated party control. Surveys have long indicated that Americans desire a clean environment and proactive measures against climate change, yet representative democracy has failed to deliver. Direct democracy, facilitated through digital networks and blockchain technology, can fulfill this need.

You see, postcapitalism is systemic. Our lives will be as intertwined with it as they currently are with capitalism. Digitalization and automation are as unavoidable as capitalism itself. Postcapitalism provides a resolution to climate change without necessitating persuasion. There will be no need for individuals to alter their lifestyles against their will, no forced dietary changes, and no sacrifices of current comfort for a hypothetical future. Instead, we will adapt to the system in which we find ourselves.

In conclusion, our collective task as a human community is to nurture these changes. We must observe, guide, and shape them. Many forces may resist the societal transformations enabled by postcapitalism, potentially delaying its benefits—socially, economically, politically, and environmentally. Our responsibility is to remain vigilant, recognize the unfolding changes, and advocate for the future we desire to avoid the pitfalls of capitalism's decline. Just as capitalism emerged from the metaphors of an objective, mechanistic universe, the new logic of postcapitalism will arise from the metaphors of digitalism. We must comprehend both the risks and opportunities to better shape outcomes in alignment with our human values.

After all, as Antonio Machado poignantly inquires:

What have you done with the garden that was entrusted to you?

— Anthony Signorelli

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Anthony Signorelli

Offering insights and imagination to enhance life in challenging times. Topics include Men, #MeToo and Masculinity; Postcapitalism; Climate Change; Digitalization and Cryptocurrency; Green Energy; Retirement and Financial Planning—essentially everything that aims to improve life in this complex historical moment.

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