Will Capitalism and Democracy Soon Be Passé?

by Andrew McAfee on July 6, 2012

I spent the better part of the day yesterday at Singularity University, teaching and talking with the students after a kind invitation from Brad Templeton. Our session went for two and a half lively hours, which astonished me. I can talk about the ideas in Race Against the Machine forever, but I didn’t think anyone else would care to. But the SU students were engaged throughout, asked probing questions, and hung around to talk even more over lunch. Clearly, the concepts of exponential technological progress and its implications for work, the economy, and society touched a nerve with them.


Some questioned whether tech progress really would lead to serious levels of unemployment and under-employment in the future, but many seemed willing to concede that this would in fact be the case. They then pretty quickly turned to the question ‘what do we do about it?,’ which is where things got really interesting for me.

More than a few of the SU students advocated doing away with our current practices of using currency as a medium of exchange,  and of having prices for things. Their reasoning was that as exponential, technology-enabled progress increases abundance and makes scarcity itself scarce, there will be so much stuff available that we should just stop charging for it.

This is an appealing notion in many ways, but it’s hard to me to see, even in the long-ish term, how food, clothing, housing, and health care (to name just a few) are ever going to be so cheap as to be essentially free. In addition, a big part of the motivation to produce stuff is the promise of being able to make money from it.

There are, of course, exceptions to this. Volunteerism and altruism are powerful forces, and people produce plenty of Wikipedia articles, blog posts, and restaurant reviews without a profit motive, but I’m cautious about reading too much into these phenomena. It’s hard for me to see how enough people are going to be willing to plant and harvest a crop (or buy and maintain the robots that do the harvesting) without the allure of revenue and profit.

One could argue that the government, in this future scenario of abundance, can and should do the producing so that we can all do the consuming. Well, we tried that last century. It was called communism, and it was an abject failure. Some places, like North Korea and Cuba, are still trying it. And they’re both places that people are frequently willing to risk their lives to escape. I think that should tell us something. And I don’t think that anything about technological progress will change the fact that massive state-owned enterprise is a bad idea.

Some of the SU students were pessimistic about the ability of the our elected leaders to intelligently and successfully manage the transition to a post-work / post-labor economy. Given the levels of bluster and polarization in political discourse these days I deeply sympathize with their frustration. But I don’t have much sympathy for their fixes, which largely consisted of departures from democracy — from the ground rule of ‘one person, one vote.’

A lot of the proposals I heard were about appointing or finding an elite – a group of smart and enlightened philosopher kings – to guide their societies through the transitions that lie ahead. Such proposals are. by definition, anti-democratic, and as such they scare the hell out of me. I opened my book Enterprise 2.0 with this quote from Jefferson, which I still believe:

I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them but to inform their discretion by education.

I think that as technologies continue to race ahead they’ll put capitalism and democracy to some tests — quite possibly significant ones — but I still think they’re our best hope for meeting future challenges. To embrace and extend a great Winston Churchill quote, they’re the worst possible forms, except all the others that have been tried.

What do you think? How ready, willing, and eager are you to move away from democracy and capitalism (which is quite distinct from corporatism, mind)? Leave a comment, please, and let us know.



Anonymous July 6, 2012 at 10:38 am

The spirit of this societal  shift is decentralization. Societies that will survive and flourish will rely not on central power but individual strength.  Jefferson was correct – the uplifting of the individual is the only way for society to survive.

Espen Andersen July 6, 2012 at 11:16 pm

P. J. O’Rourke said something along the lines of not putting intellectuals in power – they tend to create principled governments built on theories, such as communism. The delaying effect of the intellectually inadequate (but diverse) politician might just be the thing needed to rescue society from its own belief in simple causes and effects.

Alberto Ramacciotti July 9, 2012 at 12:40 pm

We could put a completely different system at work side-by-side and then see if it works better:
http://wp.me/p1i0Ii-2d  . Zero risks and a chance to get out of this actual dead end.

Vlad H July 9, 2012 at 5:36 pm

The bottom line is that we as a society will navigate this successfully only if we manage to create some quasi-socialistic downward income redistribution system, compensating for the current huge up-flows of wealth to cognitive elites, and do it without completely destroying massive advantages built into capitalist economic setup. Of course, we would need to do this faster than IT revolution reaching its logical conclusion. With out political system set up in a way where no change almost always win, it is a truly scary proposition.

Here’s the premise chewed over a little more:

I agree that abundance created by few highly productive people, to the point of everything being virtually free, although theoretically possible, in practice would require society not breaking down during the very disruptive transition from labor-based valuation of human existence to some other new kind. This transition attempt is very likely to be unsuccessful or to be a major reset: as formerly middle class folks gets poor and radicalized, radical politicians will get elected, undoubtedly leading to the downward spiral where problems caused by too much of technological advancement is not a concern anymore. 

Only if net winners of the IT revolutions agree to massive downward redistribution of wealth before it’s too late, then current relatively prosperous society will survive in the US in some form. Otherwise, if feels like we look like a rocket with shut of engine – still climbing with declining rate, i.e. burning through stored wealth of the middle class, when former middle class is about to show up with pitchforks at the gate of proud and perplexed self-made IT millionaires’. 

I liked “rage against machine” quite a bit, but its prescriptions feel lightweight and just a lip service to probably editor-requests solutions/glass-half-full chapter. Yet, while IT revolution leading to the huge upward wealth redistribution is an obvious trend, especially to some of us, who are part of the problem, effective what-if/”war” game could clarify how different actors within this system would behave. The answer is likely to be that our political system will need a major upgrade to handle this gargantuan challenge. That’s what we’ll ultimately need. 

Andrew McAfee July 10, 2012 at 10:48 am

Pilar, I don’t censor non-spam comments. I just didn’t approve your earlier one (and some others) very quickly.

Charlie Bess July 11, 2012 at 11:15 am

The whole thought process that scarcity will be scarce and that everything should be free is foreign to me. I may be like the old lady in the cosmology lecture who states: It’s turtles all the way down.

I have a hard time imagining an “economy” that is based on something other than value of items that are scarce. I don’t see a scarcity of scarcity.

I do agree that some of the things we think of as scarce today will be abundant, but we’re human and our needs shift. Things that we couldn’t imagine “needing” just a short time ago become very desirable. There are whole sections of the economy focused on making this true (marketing).

I see the race against the machine as freeing us up to focus our attention (an example of a scarce resource) on other things that will consume attention just as effectively as what we spend it on today. Is the focus of attention still considered work? That is a question for the individual, not the group.

Vlad H July 11, 2012 at 3:26 pm

True, but the problem is that remaining scarcity will be filled by the labor of increasingly small percentage of the population. Without a disruption to this process, very few people will add huge value, while majority of the population will add close to zero. Hence some kind of new redistribution schema will need to created, because labor as a main measure of humans’ contribution value, is rapidly degrading. I am saying “new” because inefficient humans doing poor job (compared to machines) is just a form of wealth redistribution from high-value-adding people to low-value-adding folks. So the process of hollowing out is somewhat “fair”, because, to paraphrase my former congressman Bob Barr, “Good Americans will feel good, and bad Americans will feel bad”, but becoming “Good American” will be possible to virtual super-humans – maybe 5% of the population, who are talented, driven, healthy and lucky.

dagblakstad July 27, 2012 at 8:37 am

Collectivism is not the answer to our challenges, but could be possible because of the economic crisis and technology. Philosopher kings is what Ellsworth Toohey proscribes in The Fountainhead, and what Hagel calls push-oriented societies in is book The Power of Pull. This a recipe for mediocrity and unhappiness where everybody should be done what are told to.

What the Internet can enable is tools for the quite opposite: pull of knowledge, where value is measured in knowledge. This is a much better platform for leveraging human capabilities, and in a democratic way and much more fruitful for everybody, Power could be, not automatically (it depends on a range of factors) more evenly. 

If it is going to to be pull or push depends heavily on having a free Internet and net neutrality. 

Ted Howard NZ July 27, 2012 at 3:36 pm

When considering individualism vs collectivism it seems to me we live in a reality that has two equally important aspects to us.

We are each individuals, and we each have the power of choice, which we seem to be able to exercise at a potentially infinite series of transcendent levels of awareness.  Having the freedom to make those choices and mistakes is critically important to personal development.

We are also each born into, and are part of, and owe our beginnings to, a society of individuals with a culture (or depending on definitions a vast set of cultures).   Having the most powerful start we can from our culture is also critically important to our individual development.

It seems to me that we need to acknowledge and respect both realities.

It seems to me that the cultural reality demands levels of cooperation, and that the greatest degrees of individual freedom can be gained through engagement in the greatest levels of societal cooperation.

It seems to me that this does not require coercion, but rather results from a combination of culture and awareness.

It seems to me that our current Western fixation on, and worship of, money and markets has come very close to the end of its societal utility, and has got to the point (as happens with all technologies) of posing more dangers than it delivers benefits.

It seems to me that we are now technically capable of creating systems that deliver abundance of all key human necessities to all individuals at no cost; yet our fixation on money and markets prevents us from doing so.   The result is massive human misery, and massive loss of potential of individual self actualisation.

It seems to me that all great developments in life on this planet are characterised at the systemic level by the development and stabilisation of new levels of cooperation.   It seems to me that we either do this, or perish – there do not appear to be too many intermediate strategies available to us in the longer term.

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Laban September 24, 2012 at 8:16 am

There ain’t no such thing as a free lunch. If you insinuate that technology and communism is the answer then I will remind you that in Cuba they drive old chevys 😉

David S Foreman October 4, 2012 at 2:02 am

Don’t need to talk theoretically. Just observe what is happening. While governments worldwide are plunging into debt and have overcommitted themselves to social programs of every kind, corporations are loaded with cash and are steadily casting off long term liabilities like pension plans, lifetime fulltime employees and debt. Governments are a relic of the past, democratic or otherwise. Its not that they are not a good idea its just that they have evolved to be grossly inefficient and tend to attract the worst kind of leaders. What’s left of democracy is a monstrosity that does little more than perpetuate war, impossible promises, lies and protects a vested class of unproductive billionaires. The sooner governments melt away the better. I have much more faith in the benevolence of corporate CEOs then “elected” politicians. The simple fact is that the nation state system and democracy are in rapid decline everywhere. With the internet the people are gaining the power to instantly communicate with each other and with their corporate overlords. Any good corporate CEO lives in fear of his customers and would much prefer to answer to a captive government that is deeply in debt, morally bankrupt and disfunctional. Politicians have no fear of their constituents and as a result they do nothing to look after the interests of the people. While a sloppy mapping program evokes a quick and sincere apology from Tim Cook of Apple — I have yet to see a politician apologize for their massive ongoing failures. If you want to find leaders who not only respond to the needs of the people but anticipate those needs, just talk to any successful tech company CEO talk about their customers.

Moraq Abra Gessler January 14, 2013 at 2:08 pm

It is fine to intellectulazie about scarcity, but it has always existed even when the world was inhabited by 100s of thousands of individu

Sandy Sanders January 29, 2013 at 12:01 am

There never has been communism in the modern world. Cuba comes close but has been embargoed to a successful but self contained poverty. Chile was coup d’ etat’ed by the US as they and the rest of the Earth’s capitalists cannot allow a successful model society sans it. The countries cited were authoritarian capitalist/socialist states that never allowed self organization of their people just as modern representative democracies serve to placate and control their working classes.

Virtual things should be absolutely free. Physical reality must have value based upon cost of maintaining a sustainable environment. All should be shared and worked for by all. Capitalism is a pyramid scheme and cannot function in a resource limited environment, has failed because of this and will be transformed into a direct democracy system of a shared commons. Population will decrease as poverty does and if we can get to a stable population around 2 billion, we can maintain an Ecotopia. We might even evolve into an adult human culture.

The article’s discussion is stuck in obsolete capitalist fantasy that takes no accounting for climate change, loss of life support from it, toxicity and the fact that current political organization is as catastrophically dysfunctional and incapable of sustainable management as is capitalism. The real question is can we manage ourselves to change before capitalism has burned all the oxygen in the room and snuffed out a habitable Earth?

If you want a sustainable high tech future vision that maintains a sustainable Earth people should open back up Bucky Fuller’s Critical Path and some of his other works.

Anonymous January 4, 2014 at 5:13 pm

“…much more faith in the benevolence of corporate CEOs then “elected” politicians.”
I don’t. I think the reason that governments have become so dysfuncional is that they’ve become an extension of corporations, captured as you say, so they serve their interests, not that of society anymore.

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