tv After Words CSPAN June 8, 2014 9:00pm-9:57pm EDT
with guest host and author of the googlization of everything. this week jeremy rifkin end of a zero marginal cost to society. the advisor argues capitalism is on its way out. the combined communications, logistics and internet will lead to its demise by increasing production and effectively eliminating the corporate profits. the program is about an hour.
>> host: jeremy rifkin is with us today. i'm from the university of virginia and we are going to discuss his newest book the zero marginal cost to society. it is the 20th book which is quite a feat in and of itself. this book takes the entire world as its subject that has a tremendous amount of focus on the current state and perhaps the immediate future state of the u.s. economy as well so it ranges across so many topics i'm sure we will have a set of rich discussions. if you could explain the title that is a good way to start the zero marginal cost to society. what do you mean? >> guest: i think what's happening is we are just
beginning to glimpse the outline of the new economic system and turning onto the world stage, the collaborative comment. this isn't the first economic system to emerge since capitalism and socialism in the early 19th century so it is a remarkable event with long-term applications for all of us around the world. the agent for the great economic transformation is something called zero marginal costs. with me explain there is a paradox in the capitalist market that has been responsible for the great success over two centuries. the irony is that is now leading to the ultimate trial for capitalism but that is going to lead to its demise as the primary economic system in the world. at the capitalist market they are looking for new technologies that can increase the productivity and the marginal cost so they can put a cheaper products and went over the
consumers in the market share and bring back profits to their investors. marginal costs are the costs of producing an additional unit of the good or service after the fixed costs are covered. business people always want to reduce the cost for marginal reasons. they never anticipated the technology revolution whose productivity was so extreme that it could actually reduce the marginal costs o cost of producd distributing goods into services making the goods and services essentially or nearly free, abundant and no longer subject to the market forces. that is happening across the global economy. even though in the medi know ine zero marginal cost phenomena affect the information industries over the last ten years devastating entire businesses. first we saw master and young people begin to find ways to create software to create music
files bypassing the recording industry and didn't pay any royalties and they brought the recording industry to its knees. then the marginal cost phenomena started to affect the newspaper magazine for publishing industry and millions of consumers became pro- sooners and they began to produce and share their own information with the media, news blogs, people share news together and then of course people started putting out their own books for free and this meant the newspapers went out of business and magazines bellied up, the book publishing industry has been devastated and most recently and of course you can speak to this from the university point of view to open online courses. we now have six or 7 million students that are taking these online courses that operated near the zero marginal cost of the best professors in the world as a receiving credit this is enforcing the universities to rethink the business model.
so it this phenomena has not been academic. it's devastated the industry. economists thought there would be a firewall. they thought okay is the zero marginal cost would affect the information goods, but they wouldn't move over from the virtual world as to the physical world, the brick and mortar in effect turning products and so the firewall wouldn't be breached. it's now being preached because the internet is now expanding to an internet of things. the more expensive internet that's now going to allow us to produce around energy is zero marginal cost. >> host: that soun sounds in itself. oxford: to many people. the internet to our general way of thinking is about the flow of information and the flow of data. the distributed and done on the control flow of data seems to touch him new and interesting
ways. how would this apply to the cars come airplanes, collections of everyday materials that you would buy in wal-mart? >> guest: it's just beginning to converge with the nascent moment in china and now also beginning to converge in the automated transfer logistics and turn it so they are expanding to the free internet committee energy internet, the automated logistics contract created a super internet called the internet of things and these are then placing sensors across the entire economic system to monitor the flow of data so we have the sense is now conducting the resource flows feeding the data from the production lines, warehouses by distribution centers have the sensors on the smart roads that are conducting
the grid. we have sensors connecting vehicles and offices. that data coming in across the economies of these internet communications, energy, internet and logistics internet is providing a wealth of data about what goes on at any given moment across the economy. by 2030 perhaps 112 yen sensors and i know later on we will talk about the questions of privacy and data security so it is exhilarating and frightening at the same time. there's a lot of possibilities enabled of challenges that what is interesting in the opportunity perspective, millions of the consumers can now do what they did with information goods. they can go up on this expanded internet of things ahead and buying the data coming through
on their own and with that coming through the system they can create their own algorithms like google and facebook's today and dramatically increase their own productivity and reduce marginal costs and producing their own energy and three d. printer products. it's only the first few years to determine this shift in the economy. >> can you explain what the word prosumer is? >> guest: it was 25 or 30 years ago it's coming to practice. that is consumers become prosumer and they produce and consume and are shared in their own goods and services. let me give you an example of how this affects the physical world and turns us from consumers to prosumer. renewable energy, three d.
products. we now have millions of early adopters in europe who are actually producing their own electricity with solar panels on the roof or wind turbines on the property. the technology for harvesting solar and wind into turning it into electricity is still privacy but it's not an exponential trend and just like we saw with computer chips in the computer industry we had a twenty-year exponential curve with solar and wind. a solar water costs 1 dollar to produce in 1970. 66 and continues to go down. but even before the fixed costs are paid back in the harvesting technologies, the marginal costs are producing a unit of solar electricity or wind is near zero because it's free you just have to capture it. the wind coming up the side of the building is free just have to capture it.
there are millions of people that are producing their own electricity they are sharing it with each other and to show you how fast this is moving, china has taken up the plan that i outlined in my last book and i visited the chinese leadership last year and after my visit today announced that $80,000,000,000.80 billion began to lay out the energy of things so millions of chinese people could produce their own solar and wind electricity and distribute across china. the u.s. is putting up 3.5 billion which is centralized, not distributed over a twenty-year period so europe and china are a head. >> host: so people are making their own stuff and expressions into their own energy apparent apparently. how are they able to find
markets? how are they able to find consumers for their products and how are they able to work together collaboratively to forge the new works. >> guest: this has hit us as a storm and we have hundreds of thousands of small and medium-sized social enterprises that are printing out their own physical products like we used printers fotheseprinters for sog our information bills. so if you are a small three d. printer, you can go up on the expanded internet of things and download the software to print your product, then you can use the cheap recycled material as your feedstock using the recycled plastic that you can find account of the neighborhood, recycled paper, sand and gravel was being melted
down for feedstock and then the -- you can power your three d. printer with your own energy from the emerging energy internet at least in europe. and then you can take your product and transport it in the future on the logistics internet with electric and fuel vehicles that operate near the zero marginal cost and soon the driver list of vehicles operate at the remote marginal cost. they not only consume their own goods that the surpluses with each other over an emerging and collaborative comment. what has happened here is we are starting to see a debate unfold. and that is it's obvious that the zero marginal cost effective pretty significant. the question is what kind of economic system -- and this is what i think you're getting at is what do we need to envision a
world where hundreds of millions of people can produce not only their own information goods but their own energy and the zero marginal cost and manufacturing products that would allow them to bypass the markets because he would be beyond profit. but, what kind of system would you need quick study, missed some somewhat befuddled because they believe there's only two ways to organize the economy either private enterprise or the government or some combination in between. capitalism, socialism, were in europe the social market economy. but economists forget if there is a third institution that we rely on audience of people around the world every day to provide an entire array of goods and services that are provided by the market and are not provided by the government and are beyond the profit motive. and we call this the social comment, the civil society, the not-for-profit sector. millions of organizations involved in education, healthcare services, assisted
living for the elderly, day care centers, sports on the environmental groups, and the economists don't pay much attention to this sector but it's a huge sector in terms of revenue. it accounts for 2.2 trillion in the countries surveyed and it's growing faster in the private marketplace. it's growing at a very fast grip, and in the u.s., canada and the uk is already over 5.5% of the gdp. it's growing while the traditional market is struggling because it is quite interesting. so what i think we are seeing is the emergence of a collaborative comment in the social economy and the marginal cost infrastructure for people who want to share things in a community because it is designed to be distributed, collaborative and it's a production that is scalable so it encourages millions of people to bypass the global companies, come together
directly and produce and share with each other and the women made all of the middlemen of these big global companies that mark up the profit margin. so, you mentioned sharing. we are seeing millions of people now moving up. they aren't just sharing information goods and renewable energy and products. they are sharing cars and homes "-end-quoteclose. we now have millions of people that are sharing their apartments and their homes on this collaborative comment. now is the zero marginal cost. they've really gone and done to the hotel industry with a data to the recording industry. once you have the fixed cost in place and you have setup your website, the marginal cost of putting an additional home who wants to lease their property is near zero and if you have a home
or apartment and want to rent it out for a short term rental you've already covered the fixed cost and that is your mortgage is being paid, property taxes being paid for the marginal cost of renting out your home to travelers is near zero. so in new york alone last year, they were responsible for eliminating 1 million hotels, because millions of travelers rented out the spaces put up by small apartment owners and homeowners. we now have 800,000 people in the united states sharing cars rather than buying the cars and they would rather have access not ownership so what is happening now is for every car that you share that's 15 cars off the road. imagine the long-term impact. one of the biggest industries in the world. when the millennial generation comes of age that means 14 out
of 15. >> host: but are you sure they are attracted for every car shared and are you sure that is an alien hotel rooms that didn't get occupied and were taken off of the grid rather than merely an expansion of the supplies? >> guest: that is an interesting point. much of the supply is when the gdp is growing very slowly we are seeing a shrinking and the growth around the world, so you could take a little bit off the edges of gdp is growing but it's a slower and slower rate. in fact what it's doing is taking the traditional extremes economy and its moving to the shared economy so it needs with business. it throws off the way that we measure prosperity. we measured gdp as the amount of output of goods and services. and you are building prisons where you are involved in building aircraft for the
military or cleaning up the toxic waste in the gdp. when people move to the collaborative process it's not gdp whereas if you are sharing a car or a home and there is a zero marginal cost of that is a reduction of gdp. so, it is a completely different measure of economic wealth, so part of the reason that gdp is going down in small part is a collaborative comment that is coming out and people are moving beyond the market economy. it's not measured in gdp. >> host: you bring us the zero marginal cost and the collaborative comment. if yois your book the zero margl cost to society a prediction or an exercise in advocacy?
>> guest: the financial times did a review and they said that the difference between this is what i do is i take a look at the existing trend lines of what is happening now in its trajectory rather than going into the future and coming back. so i think we see this trend line very clearly. we've experienced in the last ten years the devastation of the newspapers, magazines, but publishing ipublishing at a lote entertainment industry from the marginal cost. we are now seeing it clearly in the renewable energy in europe and germany where it is 25% and most of the players are consumers and small businesses are producing the green electricity near zero marginal cost and are just beginning to see the product. let me say the wild-card is food
and water because the price is not going down so even if we are able to reduce and have a potential sustainable abundance of climate change is the elephant in the room. it's affecting the water cycle of the planet and we are getting more of the blockbusters prolonged and the more dramatic drop in the summer because of the climate change seeing a drop in at the decline in the water availability. so if we cannot tackle the climate change and the price of the food and water becomes prohibitive, this ship to the comments would be irrelevant. the bad news is if the internet of things create the industrial revolution and allows us to use less resources more efficiently and move to the renewable energies and greatly mitigates the climate change if we get there quick enough i just don't know if we will get there quick
enough. >> host: you mentioned in the book a couple of times john maynard keynes and the prediction in the 1920s of automation and technological advances would of course create fictional job loss and perhaps suffering. but over the long term, we would be so liberated from the drudgery of labor that we would have our creative processes free and live in the world of cultural abundance. say probably no way of imagining all of the variety of abundance that you've outlined here. and he seemed to say at the end that he was early. early. >> he wrote that essay to his grandchildren. everyone was pretty depressed about the depression and thought that there was a plunge to the bottom happening and he said i know everyone is depressed. and he said you are going to hear a new term called technology displacement, technological unemployment.
he said this sounds like bad news but in the long-run it is good news because it is going to liberate the race. he said i can imagine in my grandchildren's generation people being able to be liberated from the toils in the jobs in blue-collar and white-collar jobs and the technology will create our traditional goods and services and most of us will be engaged in work on the social commons with the more meaningful aspects of the community and using the more explicit way. what's interesting about this is this phenomena is affecting labor. the marginal cost of labor is going towards zero cause we are introducing advanced analytics and algorithms, artificial intelligence across the system,
and we are just eliminating the labor. i predicted that would have been in the book in 1995. controversial at the time but now i noted the economist and they got it spot on in the trendlines. it just needed to be said. we haven't worked on those factories. we are eliminating a lot of the sales force in the retail. we have white-collar industries being wiped out by the technology displacement and now the knowledge workers are at risk. we don't need all of the accountants and radiologists. we are at analytics that can do the job much cheaper. so we are headed towards the near zero marginal cost of labor and have driverless vehicles within five to ten years that's going to replace hundreds of thousands of truck drivers and bus drivers etc.. it's not 20 years, five to ten years and we are testing them on the road. if we are headed towards the zero marginal labor does it say
about the prediction, what do we do? how do we define the journey and how are people employed in this collaborative zero marginal cost to society? in the short run i think is the silver lining. i think that we have a 30 year where we have to build out the internet of things, the platform for the third industrial revolution that is going to be labor intensive. we have to convert the entire use of fossil fuels and nuclear to the renewable energy that requires millions of jobs and thousands of new businesses. we have to transfer them all of the businesses in the world to the power plants that you can generate green electricity and they become your power plants doing that now in europe and beginning in china. we have to store all of that so we can use it when we need it and that requires millions of jobs. we have to transform the entire electricity grid of the world. imagine that to a distributed energy internet we have the two
generations that are involved in the semi skille semiskilled proo layout the internet of things. we have to ask what can we do then? much of the employment already is now quickly migrated from the marketplace to the collaborative commons in the social economy. that's because of the social economy it is social capital that requires humans to engage with humans and not machines and in the last 15 years employment on the social, and that's not the proper sector has gone up and employment in the traditional marketplace down, down, down. it's the way that it's outlined. so more people are migrated to these more expansive types of
jobs creating the social capital that is a higher calling than simply attending to the machines. my suspicion to round this out is that by 2050 if this isn't the raiisn'tderailed, and anytht this development towards the zero marginal cost in the world in 2050 our grandchildren might attack it might be repulsed with the idea that their grandparents play old in the dead-end jobs producing goods and services producing as they are going to be living in a more automated world where the machines do that and they are going to see that both of the human value. they say what a terrible loss of human value because these young people will be growing up in 2050 in an automated world where they can get on with the more transcendent aspects of life with social capital. i'm glad you pointed out things and it is a most poignant
forecast. it was the least thought of at the time. >> host: on the other hand you could be describing the world that we are being asked to build our own coffins in the grave is in the process of being too waste the very sort of activities from which we be right fodear ihave the social ca sense of accomplishment and a sense of value in the world and being able to care for the progeny. there are so many positive values embodied in the hard work and of the ethical working as part of the team and being part of the building something and anyone that isn't an accountant or voyeur for has been rendered in this production, you know, why should we invite this? after all, we can choose our policies and our leaders and the products that we buy. why shouldn't we put the brakes on? >> economists have always believed the most efficient
economy is where you sell your product at marginal cost. you would have the goods and services, so i'm saying this iss too sweet studio for the human race to be turned down. it's the most sustainable economy. they came out with their fifth assessment and it's a very grim story. it's the most efficient and sustainable framework that you can have for the economy because it means we are producing with a minimum input of the materials, energy and labor so we can produce with minimum use of our stuff.
social capital are becoming as creative anthat are becomingas e saw in the marketplace look at how many people have really created software that forms of entertainment videos on youtube and news blogs that goes on and on. >> host: it sounds like the winners in this society are technologically adept, highly educated, cosmopolitan and outlook as they have the ability to cause greater distances and languages. >> guest: at the exact opposite the reason the global
companies are a little bit worried to say the least this is a democratization it allows millions of us to democratize communication. if i said in 1899 the 24 years later this is before the world wide web 40% of the human race with cell phones and desktop computers would be producing their own news making it available to each other and the marginal cost at the speed of light with what you have said that's the democratization and communications of the elite of centralized institutions in newspapers and magazines and book publishing that i'm involved in have to suffer the consequences of the democratization and communications. as we move from the internet to the expansive internet of things we have millions of people producing and sharing their own clean and renewable energy on the micro- grid.
they have their own three d. printed products bypassing the companies. the real losers here are the vertically integrated global corporations of the 20th century. and i say in the zero marginal society they are the best that we could do given the circumstances of the 1,920th century. now the internet of things allows millions of smaller players, social entrepreneurs and consumers to come together correctltogetherdirectly and eaf the middlemen of the vertical companies and democratize the rest. so it's going to have its biggest impact in the developing world and we are already starting to see that in india and parts of africa and china and asia. >> host: over the same 24 years we've also seen a remarkable increase in the income inequality especially in
this country, but also to a degree in western europe and we could say if we look ahead three or four years that's why old west democratization experiment that we've seen in the internet could be over the next neutrality is for the most part over which means they're no longer is a level playing field for the communication in the united states although europe decided to adopt it and we certainly don't have anything like the open internet in turkey or india or china or any other places in the world so one could say we just experimented in the democratization and nonetheless as we have seen a shift in the resources to the financial sector it is more and more of our productive resources are now in a financial gain and much more of it is invested in a variety of information activities. we've also seen the robust middle class and why should we
get better anytime soon? >> guest: you have done a lot of work in this area. there is no guarantee. what i've outlined is the possibility of the new economic system, the collaborative comment operating at a near zero cost. it could democratize life around the world and create a sustainable planet we use the resources in a much more just and humane way and hopefully we forage. that is what we could go towards. on the other hand i think that you have the problem and that is that we have an interest in the second industrial revolution in the 20th century the telecom and cable companies. the whole framework was based on the next neutrality. when we created the world wide web it was designed to be neutral so anybody could pay a service provider a small amount of money to go on the internet
and be treated like everyone else. you were not at the beginning of the line you were not discriminated. a lot of the traditional brick and mortar scenes moving from the communication internet to the expansive internet of things, communication, energy and logistics they are starting to say wait a minute, we are not sure about the network neutrality because if it is near zero marginal cost and there is no more profit we are out of business. in january, the u.s. court of appeals, the second highest court as you know issued a judgment saying the federal communications commission did a protocol in the network neutrality that was small and void to cause it wasn't in the mandate. but now they are stuck without a mandate on the neutrality. they are saying look we created the pipes.
so, we want to charge different prices. we want to meet evil back some customers at the front of the line if we have special business relationships and we may want to control some of the data that we can use with third party advertising etc.. and it's not just of the cable and telecom companies. now we have to be concerned about the companies we love our favorites, google, facebook, twitter and amazon. i use all of them. i'm a big fan of google. it's the magic box that gives me the knowledge of the world that we are beginning to see that these internet companies that help create this social comment that can get us to the zero cost are starting to look int in some ways like the new global monopoly and search all utilities meaning if you have to go to google for all of your knowledge that is a monopoly. google controls about two thirds of the research in the u.s. and maybe 90% of the research work at in europe and the 6 billion
is on google today. they've got 50 billion in revenue. facebook, one out of almost every six human beings on the planet is on facebook and if they control a lot of the social media. what are we at 650 million people. so, what i'm suggesting is we are going to have to have a collegial but robust global conversation between the investor capitalists and of the collaborative commons on how we can have the best of the social utilities but understand that they need some form of global government, and the stakeholders need to be the civil society and by the private sector and private enterprise in the government. and we have to find a way that we can get the best out of these internet companies but make sure that it allows us to democratize the economy and headed to the zero cost. it's going to be a big struggle. >> host: the one that we are familiar with we had a pretty
good ride with it. as we discussed it may be over for that. it's a concentration of power were involved in the internet answer to my network neutrality seems here in the united states and in the world. >> guest: europe is dealing with it aggressively. >> host: that is one of the more interesting takeaways is the extent to which europe is making policy decisions and the united states is not. china has a different set and each of these is informed by politics and can yield very different results in terms of the issues that you described. for the other thing is how do we know the internet of things and that the u. described? and we see the early sprouts of these gardens coming how can we know that those two won't be
privatized and radically controlled either by the oligarchic commercial interest or the oppressive state because we have seen both of those happen in the first internet. we have some history in europe. i advise and have for a long time and i was the principal architect in the revolution plan which moved to the internet of things foreword. it was endorsed by the parliament and the commission and member states and i advised the chancellor in germany where they are pushing this forward. in germany the companies are huge power and they were decimated in less than six yea years. there's over 25% of the electricity now in germany as solar and wind and that is in seven years if we are having the
electricity by 2020 and guess who is producing it? the big power companies are producing less than 7% of the transition to the new energy and just last week the board of directors said we can't compete with the marginal cost. once the small players come together to produce their own energy it wipes out the centralized power so we have that history. however there may be countries that try to thwart this because they want to keep the control over energy that europe at least which is the largest economy in the world in terms of gdp is setting up the framework and now i am reasonably hopeful about china. the new premier read the third industrial revolution and struck the federal government. if they want to produce their
own there are some waves of hope. the u.s. and canada are the outliers right now stuck in the 20th century with the shale gas in the u.s. and woefully behind this transition to a collaborative marginal cost society. >> host: we also have in the united states pushing the wall in the states to put fees and taxes on solar panels. in addition, in virginia where i live, the previous governor and previous legislature introduced a special excise tasks on fuel vehicles. if you are not being gasoline taxes in virginia you are free riding on the highways.
it's so much of what you outlined here. they've hooked up to an internet and it is her cell phone it turns out was being monitored by the u.s. intelligence for many years. so under that condition isn't that significant challenge in terms of the values that we choose and the policies we choose to create a set of systems that can fulfill our hopes. i've outlined is the possibilities. we see the trend and the projection. we are seeing it however it can
be stalled and it can be derailed and there are so many entrenched interests that wouldn't see the democratizati democratization. i taught at the wharton school for a long time. it would be the partner. but it's not going to be the primary it would be the collaborative commons. it is shifted to the zero marginal cost society. the big energy companies and other corporate special interests can help finance the elections.
they have to vie with other groups. the regions, national governments, etc.. so until we have built with this whole question of the companies buying the elections in the u.s. isn't going to continue to fall further behind. it may come up with ideas but if you were in an old energy system and the old centralized economy based on the vertically integrated companies, it's possible that the u.s. and canada will be second-tier countries in 30 years from now. we told th pulled the power utiy companies they have to uncouple. in europe we are having a huge discussion about data security. we want to make sure the data isn't use used enough interest e begin to develop a very detailed article that makes sure the privacy of secure.
>> host: this country and many countries around the world invested a tremendous amount in nuclear energy. the idea being into the rhetoric at the time sounds very familiar to what you are outlining the idea being that by the year 2,000 that electricity would be the free to become our jolly free and we would sink many millions of dollars to the plans. we would solve the problems along the way. but ultimately it would be able to flow into peoples houses throughout the world including the developing world at the marginal cost of zero. it's the green revolution of the 1960s. it is of the various swords and new ways of cultivating that the price of corn and wheat and soybeans actually has dropped to
something close to zero and has been propped up by the massive government subsidies and create a tremendous dislocation of farmers in developing nations. because it takes a lot less labor on the phone in mexico to make a bushel of corn. and so, how do you look at those two examples and to say that we are not about to invite sandy for dreams? >> guest: they said it would be too cheap to meter but we know it is near the zero marginal cost but in other words it's an academic in the future this will happen as the nuclear power shift we now know in europe there are millions and millions of players and home owners, rural electricity cooperatives, small businesses, large businesses that are actuallbut areactually producine electricity near zero marginal cost. they promised sometimes in the future they are for millions of
billions of people right now near the zero marginal cost electricity. the third issue is addressing it and into bi big life-size compas around intellectual property controlling the fees we now have a generation of genetically modified seed and ended the life cycle company is into the venture radically increased and. they have other types and they cannot afford to lease out the intellectual property by the life-size companies so there is an example where in the agriculture we have to turn it around and move towards a more organic culture or sustainable agriculture in the land reform and allow people to begin to
shift. in europe we are doing it and we are beginning to move towards a more agriculturally sustainable system. >> host: one of the sections of the book makes a concession to the near zero marginal cost. and i was struck by this when i think about my internet use, i never believed what i used is free. i paid a comcast hundred of billions of dollars per month and at&t hundreds of dollars per month and any number of other companies for the devices into software. nothing about it is free. >> guest: every time a mention in the book it is near zero marginal cost and i spend a lot of the early sections of the zero cost in the sight of the
book on the cost we still have to pay for the internet communications by the energy costs are the excess cost, the infrastructure cost. but what i am seeing as we are headed towards mere zero marginal costs and we know in certain areas we've done that. we are going to have more towards the zero marginal cost. however what's happened now is the reason the prices are still high is on these vertically integrated corporations. we are paying more than we should do the actual production of the distribution. that's why the zero marginal cost is the ultimate test.
it's how you deal to the cost and not gdp and at the cost of the production that should head towards zero. people have also said to me if you have abundance when does create even more use of resources and be used for the planet. so much overconsumption is the fear and a scarcity. the market capitalism is based on a scarcity. we all have to get on and make sure that the other doesn't get theirs. and we are constantly in the struggle against a rainy day. but in the society that most people's basic energy and basic goods and services are provided, not all of them, but the basic goods and services there would be less fear and a scarcity if things are available in a
sustainable way and they have some control as a consumer. also, the status differentiation in the world that many things are free there isn't much status lifted and having to have and have-nots because everything is readily available. periods i it's a standard debate could sustainable abundance that gives us the idea that we have what we needed we don't need to do more than that. in the near future it is subject to scarcity is real estate and if you look at silicon valley where many of these ideas flow freely. there is a high cost of a basic apartment in the area, so in that situation, you have people getting richer on the information economy.
they would feed into the marginal cost to society and then the people that work in the deli and liquor store and hotel are unable to rent a decent place anywhere near the work. how do we deal with that. without a profit incentive how can you move the economy. it's called cooperatives. we don't tend to recognize it in the u.s. but literally billions of people are involved in food cooperatives coming electricity cooperatives, banking cooperatives, housing and all
sorts of cooperatives that are not based on the proper motive. they come together, pull the capital. when you go to the grocery store a lot of the food that you get is coming from agricultural cooperatives. that electricity comes from the rural electricity cooperatives and provide 17% of electricity in half of the transmission it's not a profit-based system. it's wildly successful. in new york we have the housing cooperatives and europe and asia and around the world more people banged in the banking cooperatives than in the commercial banks and they are big players. again we are so blinded to the idea there is only the capitalist market that we don't even see around us this other reality of the cooperatives and nonprofit organizations. let me say one other thing. economists will say this social comment is a parasite that relies on the government grants
and entitlements and private philanthropy in order to sustain itself. wrong. the study was done by johns hopkins university's civil society center and what they found is over half of the revenue bond for profit organizations are fees for the services rendered. only 34, 35% comes from the government just less than the government gives the industry and only 12% is philanthropy. so we have a collaborative comment that is now going to move from the shadows to the centerstage because of the internet of things is going to allow millions of people to bypass part of the capitalist market and become prosumers and share their own goods and services committee eliminated middlemen and indeed with each other and create institutions that are by far and away beyond the traditional capitalist profit-making institution. they are going to be two syste systems. i suspect by e