This post was originally posted 3 of August, 2015 on Linkedin. Revised
At last, we have foresighted discussions about the end of capitalism in leading economic magazines! This is so exciting.
Paul Mason published an article, on the 17th of July, 2015, with exactly the title The end of capitalism has begun. Do read it! According to Guardian the article “has been viewed over 2 million times in less than a week, and shared over 317,000 times on social media” (data from 2015). This definitely states that the time has finally come to discuss the topic in respected media.
In response to Paul Mason´s article, Steve Denning wrote “Is Capitalism Ending?” in Forbes, the 20th of July, 2015. Steve Denning argues with some of Paul Mason´s statements. I would like to elaborate on the critic that Steve Denning is presenting. In my opinion, Paul Mason has done a bold and brave statement, although I agree with Denning that some of Mason´s arguments are not well supported.
Now, let us take a look at Steve Denning´s article and go directly to his arguments and go through them one by one. The first one:
The “sharing economy” is not a business?
I do agree with Steve Denning that “sharing economy” is a business. The question here is rather, how do we define business, read transactions, in the post-capitalist era. Denning quotes Mason: “Goods, services, and organizations are appearing that no longer respond to the dictates of the market.” Denning´s reply is: “Not so. Airbnb and Zipcar are still market-driven phenomena.”
Mason should have defined what he means with “the market”. Goods, services, and organizations will definitely continue to respond to the market. If we with market mean customers. Mason writes “Capitalism was structured by something purely economic: the market. We can predict, from this, that postcapitalism — whose precondition is abundance — will not simply be a modified form of a complex market society. But we can only begin to grasp at a positive vision of what it will be like.”
I do not agree with Mason here. Capitalism was built on scarcity and above all on profitability. The post-capitalism era will be built on abundance and on contribution. This makes a world of difference. With contribution in mind, you lead your company from a totally different perspective. (I wrote more about it here: The Fastest Way to Prosperity. )
“We have less need to work?”
“Information technology has not, as Mason suggests, “reduced the need for work.” Work is needed for a variety of reasons beyond putting food on the table — human dignity, community, reciprocity and the creation of meaning in people’s lives. Unemployment is ultimately degrading and soul-destroying.” (This is just an extract if you want to read more see Denning´s article.)
I would recommend Mason to rephrase it to “We have less need to work on our existing jobs.” Thanks to robotics, AI, 3D printers and copy machines, we will not have to work to do the same jobs as today. Instead, the new technology will take care of that.
I see that we will need to redefine the word “job” and we will need to liberalize our job system. 9–5 jobs, year after year, with the same employer, will be history.
We are rising on Maslow´s hierarchy of needs, but needs we will have, although on a higher level. With that, comes new “jobs” or put in other words, new ways of contributing.
“Google prevents access to public information?”
Steve Denning brings up one of the most common argument towards the statement that “all information should be free”, even when it comes to what we nowadays call private: “What Google is capturing in private is private information about the users, which is, and should remain, private.”
This might feel right from our perspective today. Only that, what we feel is private is changing. Just remember 10 years ago, how many of us would have accepted to have their CV public? .. and now we have Linkedin.
Information will be free and we are moving into a world of transparency. In the end, nothing will be private and no one will have anything against it. The question is whether this will happen in 10 or 100 years. Until then, companies must handle private issues accordingly to the corresponding acceptance of society. It is probably totally right of Google to keep the private information about their users private — today, but may not be so tomorrow.
“Is Wikipedia displacing firms like Apple?”
Paul Mason writes that: “The biggest information product in the world — Wikipedia — is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3 billion a year in revenue.” Benning comments it with: “This is true, but so what? Mason implies that cooperatives like Wikipedia will displace existing private sector firms. This is improbable.”
Steve Denning — this is actually not improbable. I would rather say this is most probable. The ones that have the toughest job to do ahead are traditional firms with their legacy and structure. Just take a look at the bank sector — who was first out with an innovative way of handling payments? Not actors in the traditional bank sector.
It is easier to jump to the latest technology or the latest way of thinking if you do not have any legacy to consider. As we have seen in history, the ones on top fall deepest. They simply do not see the change coming before it is too late (or they see it coming, but they still keep the focus on their “main”, current cash cow). Even though it must be stressed that the change is not impossible for the established companies, but it takes an insightful and very courageous team of people for it.
“Global firms are doomed?”
Denning states that: “While it is true that mainstream economics has paid scant attention to the Creative Economy, it is unrealistic to think that niche products and services will put Google out of business. The niche products are sometimes valuable but so is Google.” I guess Denning´s reaction is because Mason did not describe this ongoing motion sufficiently. The evolving economy, or as Mason defines it as post-capitalism, has nothing directly to do with it being a niche or a global organization. What matters here, is the driving force behind the organization, or company — is the organization driven by profit or contribution? Although, new movements of doing “transactions” usually start as local or as niche activities, before they grow.
I would also like to broaden the base of organizations and companies that pave the way for the post-economy. Mason writes: “New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the “sharing economy”. Buzzwords such as the “commons” and “peer-production” are thrown around, but few have bothered to ask what this development means for capitalism itself.”
Although the “sharing economy” is the one that is most notable and reveals some mechanism of the post-capitalist era (such as the liberation of work and services). I would actually argue that the “pay-what-you-want” (PWYW) pricing model reveals even more of the structures behind post-capitalism.
PWYW is nothing new. The Christian churches have used collection boxes, ever since we can remember. The use of the PWYW model has been very limited but has started quite recently slowly to grow. Nowadays there are several companies and organizations in different fields, that apply this model. Just to mention a few: 8k, an interactive agency in Poland, Panera Cares Cafes in the US (they apply the model in some restaurants), Metropolitan in NYC (selected days), HumbleBundle (mainly digital games), and many more.
So what in the PWYW model makes it of interest for this discussion?
The main thing here is that the very foundation of this model is based on trust. The seller accepts that the purchaser pays as much as he/she is willing for in relation to how much he/she values the seller´s offer. The purchaser, on the other hand, takes into consideration, not only how much he/she values the offer, but also the seller´s needs (to continue for instance his business).
This is the desired outcome of a balanced relation between the purchaser and the buyer.
We are not really there yet. Our awareness is still quite limited. We seldom take into consideration the other part´s needs. The prerequisites for this model to be widespread are not yet in place. There are surely strong winds of change. What we need is not new technology alone, what we need is an evolved human being.
“A new kind of human being?”
Denning writes that: “The emergence of the new economy is not, as Martin suggests, being shaped by “the emergence of a new kind of human being.” The Creative Economy is emerging because of economics: it makes more money than the Traditional Economy. Certainly, new mindsets and new ways of understanding and interacting with the world are required to successfully manage it. But “a new kind of human being”? That is neither realistic nor necessary.”
Denning´s reaction is understandable since Mason does not really define what he means with “a new kind of human being”. He writes that: “…so we too cannot imagine the kind of human beings society will produce once economics is no longer central to life. But we can see their prefigurative forms in the lives of young people all over the world breaking down 20th-century barriers around sexuality, work, creativity, and the self.”
We definitely need a new kind of mindset to act differently. Our mindset reflects our outer world. But is a new mindset enough to call for “a new kind of human being”? Maybe. I prefer to talk about an evolved human being. Some major shifts are going on. I wrote a little about it in “The Path to the New Business Model.”
The single most important aspect is that we are evolving our consciousness as humans. This is not limited to “young people”, even though many young people are born with a more evolved consciousness than elder generations.
Several attributes come with higher consciousness, but there are especially two attributes that stand out in this context. Namely the shift from an egoistic perspective to an altruistic.
The other attribute is femininity. This will imply that we will have a balanced society, where the masculine and the feminine essence will be of equal worth. Note, this does not just refer to equal rights and possibilities for men and women. This goes far beyond that, the feminine essence will affect the very way we act, the way we think, the way we respond to each other. (You can read more about it here.)
Steve Denning ends his article with: “The Creative Economy is indeed potentially better — better for those doing the work, better for those for whom the work is done, better for the organizations orchestrating the work and ultimately better for society as a whole. It has no need for fake PR.”
I believe it is a bit too harsh to accuse Mason of promoting fake PR. I would rather applaud Mason for opening up the discussion in respected media! None of us have true answers about how the post-capitalist era will progress and grow. What is important though, is to inspire our society with new possibilities and new positive hopes, to speed up the shift to our next phase, to a better world.