tv After Words CSPAN August 20, 2014 9:19pm-10:16pm EDT
wonder at what point there would be satisfied, happy. >> host: you have a subchapter in here called the problem with life. what is the problem? >> guest: well, one thing is there is really not a dislike. so all the time even if you have bad moods to it share people's only option is to like it. yes, i agree you lost your job. wait. i'm not supposed to like that. what do i do? it forces you to make all of your news positive. even if it is something bad you have to frame it in a way where people will say, oh, i'd like that. i think that is a little bit of a problem when you sort of limit human emotion and possibility in a certain kind of way. much like the power that allows us to, you know, a comment on this thing that might be bad and to sort of, you know, play with that a little bit.
it is interesting. the software forces you to be positive and share something that deserves a thumbs-up, a like. >> host: as a college professor here at pepperdine, is technology interfering with teaching? >> guest: every teacher, i think, wrestles with what to do with technology in the classrooms. i mean, the students, if they are taking notes on their laptops they are also getting updates, that twitter feed, you know, so you are constantly competing for their attention. even in an exam situation, the possibility of students, you know, accessing information via their cell phone underneath a desk is high. and the temptation to cheat his ever-present. so one way i have dealt with it, i am teaching media. yet i allow no media in the classroom. you know, no laptops, no cell phones. they have to be fully present to
the discussion and to each other. i might use media on screen. i might have a laptop bringing up our points and slides and showing videos, but i do not want them out there. when it comes time for exams there are allowed to have all media access possible. >> host: why? >> guest: because there will never be a time in their workplace where they are cut off from those resources. set to test them by saying what can you remember from your head or memorize is not actually a real test. the moment that the kids are in they have access to all information. how can we sort through too many options in a limited time frame, isn't that the challenge of the workplace now? right, given all the options saudis see through things, read carefully, analyze, make wise decisions given too many options >> host: the you close "igods"
with the question, is technology is leading us. what is the answer? >> guest: i guess we will come to see technology like smartphones as something every day, already moving into glass like google glass. i think we will come to see it like a fork. it's so captivating and magical. he can give ourselves to it a little too boldly and uncritically. kelli distance. make sure that the tools designed to serve us are not in slavered and. >> host: the book is kind of a warning shot across the belt. >> guest: a deep appreciation for the people who created this
technology. i appreciate how they help us manage abundance and too much. is a chance tsa be careful. you have not place too much faith in technology. too much magic to something that is really meant to service. >> host: "igods" is the name of the book about technology shapes our spiritual and social lives. craig detweiler of pepperdine is the author. >> up next on book tv after words with guest host. this week best-selling author jeremy rifkin and his latest book is zero marginal cost society. in it, the european union adviser argues that capitalism is on its way out. combined communications manager command logistic internet will lead to its demise by increasing production and distribution and effectively eliminating
corporate profit. this program is about an hour. >> host: hello. jeremy rifkin is with me today. i am siva vaidhyanathan from the university of virginia, and we're going to discuss his newest book. it is also his 20th book which is quite a feat in an of itself. this book takes the entire world's has is subject but has a tremendous amount of focus on the current state and immediate future state of the u.s. economy as well. and so it ranges across so many topics. i am sure we will have a very rich set of discussion that will link together quite nicely. something that you could explain, the title, that is a good way to start, "the zero marginal cost society." what do you mean? >> guest: let me put it in context. i think what is happening is we are just beginning to glimpse
the outline of a new economic system entering on to the world stage, the collaborative common. this is the first economic system to immersed in the advent of capitalism and socialism. so it is a remarkable historical event with long-term implications for all of us around the world. triggering agent for this great economic transformation is something called zero marginal cost. let me explain. they're is a paradox that is deeply embedded in the heart of the capitalist market which has actually been responsible for the great success of the invisible hand over two centuries. the irony is this paradox is now leading to the ultimate triumph of capitalism, but that will lead to its demise as the primary economic system in the world. here is the paradigm. in a capitalist market sellers are continually probing for new technologies that can increase the productivity, reduced the marginal costs to put out cheaper products, whenever
consumers and market share and bring back profit to investors. marginal costs of the costs of producing an additional unit have a greater service after year fixed cost is covered. business people of always wanted to reduce marginal cost for obvious reasons. they simply never anticipated the technology revolution his productivity was so extreme that it could actually reduce those marginal costs of producing and distributing goods and services to near zero making goods and services essentially or nearly free, abundant, and no longer subject to market forces. that is beginning to happen in a major way across the global economy. you know because i love what you teach. we saw the zero marginal cost phenomenon. first yen people began to find ways to create software to share music files, bypassing the
capitalist market and the recording industry. and it brought the recording industry to its knees. then the zero marginal cost phenomenon started to infect the newspaper and book publishing industry. millions of consumers began to produce and share their own knowledge and animation, expedia, knowledge together, news blocks, ms. together. the newspapers went out of business, the book publishing industry has been devastated we now have six or 7 million students a better taking these free online courses that operate near zero marginal costs and are receiving credit. this is now forcing the universities to rethink their
business model. so over the last ten years this zero marginal cost phenomenon has not been academic. but economists thought there would be a fire wall here. they thought, okay, the zero marginal cost would affect information goods, but it would not move over from the virtual world to the physical world, the brick and mortar world, synergy in manufacturing products and so it would not be breached. it is now being breached because the internet is now expanding into an internet of things. the expansive internet that will not allow us to produce energy and products at zero marginal cost. >> host: the idea of the internet of things sounds in itself paradoxical to many people. the internet to to our general way of thinking is about the flow of information, data. a distributive not a controlled flow of data that seems to touch
everybody in interesting ways every day stretches the world. how would this apply to cars, airplanes, collections of everyday materials that you would buy and walmart? >> guest: the information internet is just now beginning to converge but the nation's energy internet in europe and now china. and also beginning to converge with a fledgling an automated logistics' the internet. it is expanding into three, information, energy, automated transport or logistics' and creating one super internet of the internet of things. and these three internet seven placing sensors across the system to monitor the flow of data. we have sensors now connecting three source close, sensors feeding data in from production lines, warehouses, distribution centers, sensors on smart roads,
sensors that are connecting the electricity grid so that we know what the appliances are doing at any moment, since disconnecting vehicles and offices and stores. that big a data coming in across the economy to these three internets, communications, energy, and logistics' is providing a wealth of data about what goes on at any given moment across the economy. and what this is -- we now have 13 billion censors out there. ibm says in 2020 there will be 50 billion. and by 2013 perhaps 100 trillion sensors connecting everything or anyone. later on we will talk about the questions of privacy and data security, but it is exhilarating and frightening at the same time. a lot of possibilities and challenges, but what is interesting from the upper edge into perspective, millions can now do what they did that information goods, go up on this expanded internet inline data
coming through on their own novels with their own applications taken create analytics and dramatically increase there on productivity, and produce their own energy just like they now have reduced their marginal cost on the information goes on the traditional engine at. it has just begun. it is a tremendous shift in the economy. >> host: can you explain what a pro sumer is? >> host: -- >> guest: it is now really coming into practice. that is consumers. they produce. let me give you two examples of how this internet of things affect the physical world and turns all of us from consumers to prosumers. renewable energy, a 3d printed
products. we now have millions and millions of early adopters in europe who are actually producing their own greedy electricity would solar panels on the roof, wind turbines on their property, and they are producing at near zero marginal cost. the technology is still a little pricey, but it is on an exponential curve. it's just like we saw with computer chips and the computer industry, we have had a 20-year exponential curve with solar and wind. a solar block costs $60 to produce in 1970. it is $0.66 today and has continued to go down. but even before the fixed cost is paid back in the marginal cost of producing a unit of some of electricity or wind is free. you just have to capture it. the wind is free. you just have to capture it.
we have millions of people who are now producing their own electricity, sharing it with each other on the emerging energy internet in europe. to show you how fast this is moving, china has taken up the plan that i have outlined in my last book. and i visited the chinese leaders last year. and after my visit they announced an 80000000000.4-year commitment, $80 billion in four years to begin to lay out the energy internet of this continent of thing so that millions of people can produce their own electricity and distributed across china. putting up three nap billion for its energy internet. >> far end on this. >> host: people are making their own stuff, expressions and energy apparently how are they
able to find markets, consumers for their products and able to work together collaborative lee to forge new works? wikipedia comes to mind, for instance. as of speech to a good example of the 3-d printed products. this has hit us as a storm in the last three years. we now have hundreds of thousands of hobbyists and thousands of small and medium-size social enterprises that are actually printing out there on physical product just like we'd use printers for software and producing information goods. so if you are a small 3-d printer you can go up on the expanded internet of things and download free software to printer product. and then even can use cheaply recycled material as your feedstock, recycled paper.
even sand and gravel is being melted down. and then the -- you can power your three the printer with your on renewable energy from the merging it energy internet, at least in europe. and then you can take your product and transfer it into the future of the logistics' internet, the electric and fuel cell vehicles that operate at near zero marginal cost. and soon driverless vehicles that operate at very low marginal cost everyone can become a prosumers and not only consume their own goods but share their surplus with each other over an emerging collaborative common. what has happened here is they are starting to see a debate unfolds. and that is, it is obvious that this near zero margin cost effect is pretty significant damage the question is, what kind of near -- of what kind of economic system would we need to
envision in an order to have a world where millions and hundreds of millions of people could create their own energy, their own manufacturing products which would allow them to bypass the market because he would be beyond profits. only two ways to organize the economy. private enterprise or the government or some combination in between what the economists were given, an institution that we rely on, list of millions of people every day in the entire array of goods and services that are not provided by the government and are beyond the profit motive. we call this the social comment on the civil society. involved in education, health
care services, assisted living for the elderly, day care centers and the economists don't pay much attention to this sector, but it is a huge sector 2 trillion in revenue in 40 countries surveyed. it is growing faster than the private marketplace. and then the u.s., canada, and the u.k., already over five and a half% of the gdp. it is growing while the traditional private enterprise market is shriveling. it is quite interesting. what i think we are seeing is the emergence of a collaborative , and in the social economy. the trigger for that is as zero marginal cost infrastructure because it is like a soul mate. this is designed to be distributed to, collaborative, pier production and naturally scaled. millions of people come together
directly and produce and share with each other. you eliminate all of the middlemen of these big, huge global companies you mentioned sharing. we are seeing millions of people moving out. there are not just sharing information. renewable energy, a 3d printed products, cars, homes, closed. we have been hearing about couch surfing. we now have many as a people that are sharing their apartments and homes on this collaborative common. now, zero marginal costs that has done to the hotel industry what file sharing of music to the recording industry. your fixed costs in place. the marginal cost, and additional apartment or home on
there. if you have a home or apartment and want to lease it out for short term rental you have already covered your fixed cost. that is your mortgage is being paid, your property taxes are being paid. the marginal cost of running out the travel is near zero. so in new york alone last year responsible for eliminating 1 million hotel nights from the hotels. they rented out spaces put up by a small apartment and homeowners . we now have 800,000 people in the united states sharing cars rather than buying cars. they ran out access to the car, not ownership. what is happening is every car that you share takes 15 of the road. imagine a long-term impact for the auto industry, one of the biggest in the world when the millennial generation comes of age and they are sharing cars. that means reducing 14 out
of 15 cars on the road which has an impact. >> host: are you sure it is zero some? are you sure that there is a car subtractive or 15 cards subtracted for every car share? are you sure that that is a million hotel rooms that did not get occupied undertaken of the grid rather than merely an expansion of the supply? >> guest: that is an interesting point. a small expansion of supply, but that gdp is growing slowly so you can take little bit off the edges because the gdp is growing. in fact, what it is doing is taking the traditional exchange economy and moving to their share bubble economy. interesting enough it throws off the whole measure of economic prosperity. we measure gdp as the amount of output of goods and services, and it does not differentiate between negative or positive. building prisons are
involved in building aircraft for the military or cleaning up toxic waste. that augusta's gdp. hear when people move to a collaborative, and the economic well-being of -- is increasing but it does not count to the gdp. zero marginal cost, that is a reduction in gdp. so it is a completely different measure of economic wealth. so part of the reason gdp is going down, a small part is the collaborative, and is coming up and people moving beyond the market economy. it is not measured in gdp. >> guest: you bring us all these get ideas. in a general sense of abundance, an economy driven by an abundance. is your book, "the zero
marginal cost society," a prediction for an exercise in advocacy? >> guest: i think it is looking at the trend line. the financial times debt and nice, long review of the book, a thought for review and said the difference between this and future is gross is that what i do is take a look at the existing trend line and what is actually happening now and it's trajectory rather than going into the future and coming back. i think that we see this trend line as clear. we see what has happened. we have experienced in the last ten years the devastation of newspapers, magazines, but publishing, the entertainment industry from near zero marginal cost not academic. we're now seeing it to the renewal energy in europe. it -- most of the players are consumers and small businesses we're just beginning to see it in 3d printed products the wild card here is food
and water. that price is not going down. even if we are able to reduce our margin of cost and have the potential sustainable abundant economy climate changes the elephant in the room because with climate change you have a dramatic effect, more blockbuster winter snow, long spring floods, more dramatic drops in the summer and leon now because of climate change seeing a drop in decline of food production and water availability so if we cannot tackle climate change and the price of food and water becomes prohibited this ship to a near zero marginal cost in society and the collaborative, and will be rather irrelevant. the good news is the internet as things create a third industrial revolution and allows us to use less resources more efficiently is to move to renewable energy and really mitigate climate change if we can get there quick enough. i just don't know if we
will. >> host: this reminds me of three previous predicted moments. you mentioned in the bucket couple of times the prediction made in the 1920's that automation and technological advances would, of course, create fictional job loss and, perhaps, suffering but over the long term we would be celebrated from the drudgery of labor that we would have our creative process he's freed and live in a world of at least cultural abundance. you probably have no way of imagining the varieties of abundance. and you seem to say at the end that he was not wrong. he was just early. >> guest: he wrote that as it to his grandchildren. everyone was pretty depressed about the depression and that there was a plunge to the bottom happening. he said, look, i know everyone is impressed. you will hear a new term called technology displacement.
it means that the machines are replacing human beings and they are more efficient and cheaper. this sounds like bad news but in the long run is good news because you say it will liberate the human race. i can imagine my grandchildren's generation, people being able to be liberated from toyo and jobs , blue-collar and white-collar jobs. the technology will create traditional goods and services, and most of us will be engaged in work on the social common with a more meaningful aspects of life creating community and using the mind in a more explicit way. what is interesting about this is this zero marginal cost phenomenon is really affecting labor. the marginal cost of labor is going towards zero because we're introducing now advanced analytics, algorithms, artificial intelligence, robotics
across the system, and we are just eliminating. i predicted that would happen in a book called the end of work in '95, controversial at the time but i notice they say he got that spot on in terms of the trend line. so obvious. it just needed to be said. we have now virtual retail eliminating a lot of the sales force. we have white-collar and service industry being wiped out by technology displacement is played now than knowledge workers are at risk. we don't need the lawyers, accountants, radiologists. we have analytics that can do the job quicker and cheaper. we are headed toward near zero marginal cost marginal cost labor. driverless vehicles will be on the road which will replace hundreds of thousands of truck drivers and bus drivers. it is not 20 years away. 5-10 years. already being tested in california. the question is, if we are headed toward near zero
marginal cost labor what does it say about the prediction? what do we do? how do we define the human journey? our people employed in this collaborative, and, in a zero marginal cost society? in the short run i think there is a silver lining. i think that we have a 30-year and tear -- interim where we will have to a bill that the internet of things. that is going to be labor-intensive. we have to convert our entire energy use from fossil fuel and nuclear to renewable energy. that will require millions of jobs, thousands of new businesses. we have to transform the buildings in the world to your power plant said they can generate screen actors in the near building and it becomes our power plants. we're doing that now. we have to store all of that energy. that requires millions of jobs. we have to put in an energy internet, transform the entire electricity grid of the world. imagine that.
it distributive energy internet. a 30-year billed out, a lot of jobs. finally we have to put in an automated transport and logistics great. over the next 40 years we have two generations who can build the environment to lay out. but as of this comes in, it is smart, intelligent, can program itself with the small supervisory work force. we have to ask, what do we do that? much of the employment already is now quickly migrating from the marketplace to the collaborative commons, the social economy. and that is because in the social economy it is social requires humans to engage with humans and machines. the last 15 years, the employment of the social commons, the not-for-profit sector has gone up. employment in the traditional marketplace down as technology has displaced workers. this is the way it was outlined. more people are migrating to these expensive types of
jobs creating social capital which is a much higher calling than simply attending to a machine. my suspicion, to around this off, is that by 2015 if this is not derailed -- van de think it up set this whole development, in 2015 our grandchildren might look back and be repulsed by the idea that their grandparents 1248, nine, ten hours a day producing goods and services because they're going to be living in a more automated world where the machines do that work, and they will see that loss of human value in the 20th century, mass labor with the same repulse and we see slavery and serfdom before the industrialization. these and people will be growing up in an automated world where they can get on with the more transcendent aspect of life creating social capital and the collaborative common.
maybe the most poignant forecast even though it is the least thought of at the time. >> host: on the other hand you could be describing a world in which there are all being asked to build our own coffins and dig around graves in the process of laying to waste the very sorts of activities from which we derive social cohesion, a sense of accomplishment, a sense of value in the world and a sense of being able to care for our progeny. so many positive values embodied in the ethic of hard work and the ethic of working as part of the team in the ethic of being part of building something. a great whether commercial or non-commercial. to anyone who is watching who has just been rendered unemployed by this prediction, you know, why should we invite this? after all, we can choose our policies, leaders, and the products that we buy. why should we put the brakes on? >> the economists have
always believed that the most efficient economy is where you sell your product at marginal cost. they just never thought marginal cost would be zero and therefore no more profit so what i am saying, this is too sweet a deal for the human race to turn down. if we can produce sustainable abundance at near zero marginal cost, not for everyone, but our wide range of information grid, energy, product, why not? it is the most sustainable economy. right now we are addressing climate change. the u.n. panel came out with a grim story. they don't want to put benchmarks to move to renewable energy economy, and we are stalled. what we need to realize -- and this is what i said in the book, zero marginal cost is the most efficient, sustainable framework that you can have for an economy because it means that we are producing the minimum input of materials, energy, labor, that we can produce with the minimum use of our stuff.
for example, if you are taking 15 cars off the road that is a reduction in co2 emissions and a huge amount of material. millions of people are sharing that means instead of buying more close which emits a lot of global warming gases more people are sharing a few were close or of people are out here sharing they're existing domiciles rather than building new hotels, that is that reduction in the emission of co2 and less resources. the perfectly sustainable economy is a zero marshalled cost society. in terms of incentive the economists have argued up until now that you will lose incentives. they're is a generation that does not believe that. they're calling themselves social launched a nurse. business schools around the world of producing new generations to use their creativity camacho barrell skills to advance collaborative networks because the primary goal is
not market capital but social capital. and they are actually becoming as creative and entrepreneurial as we saw in the marketplace in the 20th century. look at how many people have really created software, new forms of entertainment, videos on youtube, new kinds of news blocks. goes on and on, and they have done it with a creative thrust as significant as we saw in the marketplace but it is no social entrepreneurs on a collaborative, and through non-profit. it does not end. it just changes the economic framework in which incentive is created. >> host: it sounds like the winners under the society are those who are technologically adept, highly educated, cosmopolitan and outlook because they have the ability to collaborate across great distances and perhaps even across languages. is this a recipe for further concentration of wealth and power and income inequality over time? >> you just threw me a soft ball. >> good. >> actually, it is the exact
opposite. the reason a lot of traditional global companies are little bit worried to say the least, this is the democratization of economy. this allows millions of us to democratize communication, which we have. if i said to you in 1989 at 24 years later before the world wide web 40% would be producing their own news, making it available to each other at near zero marginal cost at the speed of light, what would you have said? that is the democratization of communication. they have to suffer the consequences of the democratization of communication. what i am saying is if remove from the internet to the more expensive internet of things we have millions of people producing and sharing their own claim renewable energy on micrograms by passing the big power and utility
companies. hundreds of thousands of young people producing their own 3-d printed products by passing big companies. the real losers here are the vertically integrated global corporations of the 20th century. and i say in "the zero marginal cost society," the best that we could do given the circumstances. centralized energy, communications, forcing us to create a vertically integrated corporation is that put everything under one roof, supply and distribution to create cheaper product. now the internet assam's because it is lateral that allows millions of smaller players, social entrepreneurs and prosumers to come together directly and eliminate the middleman of the big vertical company and democratize. it will have its biggest impact on the developing world. we are starting to see that in india and parts of africa and china and asia. >> host: over the san 24 years we have seen a remarkable increase in income inequality,
especially in this country, most acutely in this country but also to a degree in western europe. and we have seen that we could say that if we look ahead three or four years that wild west democratization experiment that we have seen with the internet could very well be over, neutrality is for the most part over which means they're no longer is a level playing field for communication in the united states, although europe just cited to adopted, and we certainly have nothing like an open internet in turkey or india or china or many other places in the world. so one could say that we just experimented with that democratization. nonetheless, over this time as we have seen their shift in resources to the financial sector, more and more of our potentially productive resources are now in financial games and much more of it is invested in upper information activities we have also seen an evacuation of robust middle-class.
why should we believe it would get better anytime soon? >> i'm familiar with your work. you have done a lot in this area. there is no guarantee here. i have outlined the possibility of a new economic system operating years zero marginal cost that could democratize life around the burro and create a more sustainable planet where we use resources and a much more just and humane white. that is what we could go to. on the other hand, i think we have a problem, entrenched interest from that industrial revolution of the 20th century, telecom, a cable company, power and utility company trying to force this process network fidelity is critical. you know, the whole framework for the internet is based on network neutrality. they created the world wide web to be network neutral so that anyone could pay a service provider a small
amount of money and be treated like anyone else. you were not put at the indoor beginning of the line not discriminated in terms of price, data not used against your interest, networked neutrality. that is what made it successful. now that a lot of the traditional brick and mortar industries are seeing that we are moving from the communication internet to the more expensive internet of things communication antennas, energy internet, logistics' internet they're starting to say, wait a minute, we are not sure about network into reality because if our industry ghost town near zero marginal cost at cost and there is no more profit we are out of business. in january the court of appeals issued judgments in the federal communications commission, their protocol on a number of the trolley was null and void because it was not under mandate. now the federal communication commission is stuck with how to mandate on network into reality.
the telekom and cable companies are saying, we created the pipes. we are using our pipes. if we want to charge different prices, hold back some customers, but some at the front of the line if we have special business relationships we may want to control some of the data to use with third parties, advertising, and it is not just the table -- cable and telecom. now we have to be concerned about and tennant. our favorites. google, facebook, twitter, amazon. i use all of them. i am a big fan of google. abcaeight to every day. it gives me the knowledge of the world, but we are beginning to see that the internet companies which helped create the social, that potentially can get as in to the zero marginal cost, they are now starting to look at ways like the new global monopoly. starting to look like social utilities. meaning, if you have to go to google for all of your knowledge, that is like a monopoly. google controls about two-thirds of the research engine market in the u.s.
and maybe 90 percent engine traffic in europe. and 6 billion a day. we have 50 billion in revenue last year. facebook, one out of -- almost one out of every 61 beings on this planet is on facebook. .. we are going to have to find a way that we can get the best out of these internet companies that make sure it allows us to democratize the economy head to near zero marginal cost. it's going to be a big struggle.
>> host: you describe three internets. we have had a really good ride with it. and as we have discussed it may be over for that. there's a concentration of power involved with the internet and certainly network neutrality seems dead in the water in the united states and much of the world anyway. >> i should say europe is dealing with it aggressively. >> that's 11 of the more adjusting takeaways from the book is the extent to which europe is making policy decisions in the united states is not. china is making a different set of policy decisions in each of these informed by politics can yield very different results in terms of various issues you describe. the other two internet of things, how do we know, the internet of things and energy internet that you have described and you see the early stirrings that may be the sprouts of these gardens coming. how can we know that those two
won't be corrupted, privatize, leveraged and radically controlled either by oligarchic commercial interests or oppressive states because we have seen both of those things happen with the first internet. >> guest: we have history and i advise the european union and have for a long time. i was privileged to be a principle architect of their industrial revolution plan which moves the things forward. it's endorsed by the european parliament and member states and i have also advised chancellor merkel in germany where they are pushing this forward. we have some history in germany. in germany the big power utility companies like eon and emb w. global companies huge power they were decimated in less than six years when millions of small players that produce their own solar and wind energy. over 25% of electricity now in
germany is solar and wind and that's in seven years and we are heading to 35% clean electricity by 2020 and guess who's producing a? it's millions of small players. the big power companies are producing less than 7% to the new energies and last week more directors at eon said we can't compete with a zero marginal cost. what happened is once millions of small players come together to produce their own energy it wipes out centralized power so we have that history. however as you said there may be countries that may try to thwart this because they want to keep an oligarchic control over energy but europe at least which is the largest economy in terms of gdp and still larger than the u.s. and lisa's setting a framework and now i am reasonably hopeful about china. premier, a new premier read my last book and instruct the federal government to move on energy internet and that 80 billion dollar four year commitment means billions of
chinese people will produce electricity at zero marginal cost. the u.s. and canada are the outliers on that. they are stuck in the 20 century with tar sands in canada showed us in the u.s. and woefully behind is the transition to a collaborative commons in the zero marginal cost society. >> host: you also said the united states right now the koch brothers pushing lawson states to put fees and taxes on solar panels. in addition in virginia where i live the previous governor in the previous legislature introduced a special excise tax on alternative fuel and hybrid vehicles using the argument above cases using the argument that people who answer to these other energy forms in their lives are free riding on the system. if you are not paying gasoline taxes in virginia you are free riding on the highways was argument behind it. the current legislature has
repeal that tax on hybrids but you have in this country tremendous political opposition to so much of what you have outlined here and in europe it fascinates me that you raise the influence of president merkel in germany. she is hooked up to the internet and it turns out her cell phone was being monitored by u.s. intelligence for many years. under that condition isn't there significant, a significant challenge in terms of the values we choose and the policies we choose to create a set of systems that can fulfill our hopes? in other words, your predictions might not be so simply achieved given us. >> guest: i agree with you. look what i've outlined here is the possibilities we see a
trend, we see the projections. it's not epidemic. however it could be stalled, it could be derailed. there are so many that would not like to see the democratization of the economy. let me also say the capital system isn't going to disappear. you know i taught the advanced management program at the wharton school for a long time and i'm a believer in the market that the market will play a streamlined role. it will become more aggregated. it will be a partner of this but it won't be the primary partner within a collaborative commons. but there are a lot of interests of foot. you mentioned the u.s.. people ask me me why zizo behind this third industrial revolution and the shift to the zero margin shifts society. while the big energy companies and other special interest can help finance the elections. they provide the money to the candidates. in europe we have public
financing of elections so while the companies at the in brussels they can't write the legislation because they have to divide with other groups. the region's national governments and ngos etc. so until we have dealt that though this whole question of companies buying electricity in the u.s. the u.s. is going to continue to fall further behind. may come up with new ideas but if you are in an old energy system and an old centralized economy based on a vertically integrated companies as possible the u.s. and canada will be second-tier countries 20 or 30 years from now. in europe we are wrestling with these issues on power. we told the power utility companies they have to uncouple. they camped on the distribution because it has to act like an internet allowing everybody equal access. in europe we are now having a huge discussion about data security and protecting people's privacy. we all want this internet of things that we created more collaborative world but we want to make sure data isn't used by third parties against our interests so we are beginning to
develop detailed protocols to make sure that privacy is secure. that's not happening here. >> host: so there are two previous predictions that i would like to ask you about. one from the 1950s and one from the 1960s. in the 1950s this country and many other countries around the world invested a tremendous amount of money and nuclear energy. the idea being in the rhetoric at the time sounds very familiar to what you are outlining in the idea being by the year 2000 electricity would be effectively free, marginally free. we would sink millions or billions of dollars into these plans. we would solve the technological problems along the way and solve the political problems because we had a few decades to do that but ultimately energy would be able to flow into peoples houses throughout the world including the developing world and a marginal cost of zero. the second one is the green revolution of the 1960s. this one we actually found through biotechnology of various sorts and new ways of
cultivating that the price of corn and wheat and soybeans actually has dropped to something close to zero, propped up by massive government subsidies in creating tremendous dislocation of farmers so people flooding northward from mexico because it takes a lot less labor on a farm in mexico to make a bushel of corn. so how do you look at those two examples and say we are not about to invite the same deferred dreams? >> guest: in terms of nuclear power they said it would be power too cheap to meter but we now know renewable energy is near zero marginal cost. in other words we now know in europe there are millions and millions of players, homeowners consumer cooperatives rural electricity cooperative small businesses and large businesses that are producing green electricity at near zero marginal cost.
they are already there so that issues off the table. we knew it was delivered to millions and billions of people right now. near zero marginal cost of electricity. the food issue is interesting you might know that i fought monsanto and the life science companies around intellectual property controlling seeds. we now have a generation of genetically modified seeds in the actual seeds are patented so they are controlled and owned by a handful of large life science companies and we have no record to show the yields have been dramatically increase. on the contrary we have every evidence of small farmers now have available other types of seeds and they can afford to lease out the seeds that are owned as intellectual property by the life science companies. there is an example where an agriculture we have to turn it around. we need to move toward more organic and ecologically
sustained agriculture land reform and allow people to begin to shift their food production from fertilizers and pesticides to more organic treatment. it's a big jump. in europe we are doing it and in parts of asia they are moving towards a more agriculturally sustainable system. we are not doing it in the u.s. in any major way. >> host: one of the sections of this book makes a small concession to the idea of near zero marginal cost. i was struck by it because when i think about my internet use i never believe that what i use is free. i've pay, hundreds of dollars per month and i've pay at&t hundreds of dollars per month and i pay any number of other companies for the devices in the software to interact with this flow of data. nothing about the internet is free. now some of those are subject to cause that every month i write a check to comcast. >> guest: as you know over time i mention in the book i say near zero.
i spent a lot of the early sections of the "the zero marginal cost society" the book on the causes us to pay, internet communication, the energy cost the access cost the infrastructure cost but what i'm saying is we are heading towards near zero marginal cost. we already know in certain areas we have done that. what is the cost to you and i to put an idea up on the internet and make it available to 40% of the human race. not much. service provider and cell phone fixed costs and that's about it. assessing the book we will head toward more near zero marginal cost. what has happened now is the reason prices are still high on these vertically integrated corporations there are so many middlemen in the process they keep marking up the transaction cost and by the time he gets to the final end user we are paying more than we should more than the production and distribution of product would warrant. that's why zero marginal cost is the ultimate test of the decent
sustainable just society. if people want a metric to measure how you created just and sustainable world is how you head towards near zero marginal cost and not gdp. that allows us to share goods and services at the cost of production which should head toward zero. people have also said to me if you have abundance will that create even more use of resources and the worse for the planet? probably not. the reason we have so much overconsumption and overindulgence is because of fear and scarcity. market capitalism is based on scarcity so we all have to get hours and make sure the other doesn't get theirs, mine versus pine and we are always in the struggle toward against a rainy day because tomorrow may bring bad news. in a society where most people's basic energy, basic goods and services are provided, not all of them but the basic goods and services there will be less fear
of scarcity, less need to hoard of things available in a sustainable way and they do have some control over the process. also the status differentiations in a world where many things are free there's not much that is left between having the haves and the have-nots because everything is readily available. i suspect it changes the psyche from scarcity which creates the idea of overconsumption to a sustainable abundance which gives us the idea that we have what we need and we don't need to do more than that. >> host: one area that is consistently a release in the near future up to scarcity is real estate. if you look at silicon valley where many of these ideas flow freely and you look at san francisco where many examples flow freely there is a massive civil war breaking out over the high cost of the basic apartment in the area. so in that situation you have rich people getting richer on
the information economy, rich people getting richer, educated people getting richer on the various elements that would feed into the zero marginal cost society and then the people who work in the delis and the liquor stores and at the hotels are unable to rent a decent place anywhere near their work. police officers, firefighters and teachers as well. so at that point there are certain things that cannot be zero marginal cost. how do we deal with that? >> guest: we always assume there's no way to move an economy unless there's a profit incentive. without a profit incentive how can you move the economy therefore the collaborative economy doesn't make sense. how would people produce and share things for free? wake-up call. billions of people are doing it today. it's called cooperatives. we don't tend to recognize this in the u.s. but literally billions of people