Economic Development

No Value

A "big think" look at the future of capitalism fails to reckon with the factors that make capitalism so resilient.

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism

Jeremy Rifkin

356 pages, Palgrave MacMillan, 2014

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Worried that capital accumulation is driving ever-greater wealth inequality? Concerned that we have already lost the climate change battle? I have good news. According to Jeremy Rifkin, author of The End of Work and The Third Industrial Revolution, you can rest easy. In his new book, The Zero Marginal Cost Society, Rifkin argues that we are about to enter an era when the Internet of Things, “free” energy, and what he calls “the collaborative commons” will make anything and everything available for practically nothing. Together, he contends, those developments will overthrow capitalism as the world’s dominant economic model.

If you think that idea sounds silly, well, you’re right. And Rifkin expounding on it for 300-plus pages of 10-point text—all of it buttressed by 770 endnotes—doesn’t make it any less so. To be fair, those 770 source notes offer a comprehensive tour of trends that will definitely shape the near future. But Rifkin’s assembly of this information into a narrative hits all the low notes that are common to “big think” books:

  • Attacking nebulous concepts that you don’t define? Check.
  • Name-dropping your consulting company, which just happens to specialize in charging people to solve problems that you’ve invented? Check.
  • Writing jargon-filled sentences that might mean anything (or nothing)? Check.
  • Invoking historical inevitability to mask poorly supported premises? Check.
  • Ignoring issues of political power and economic incentive that shape our daily lives and our future? Check.

I found Zero Marginal Cost Society to be so utterly unconvincing that I have to take seriously the possibility that I simply don’t get it. I kept going back to the book, looking for an insight that would make everything click. I never found it.

Central to the book is the idea that developments such as the emergent “sharing economy” will overthrow capitalism. “The Collaborative Commons is ascendant,” Rifkin writes, “and, by 2050, it will likely settle in as the primary arbiter of economic life in most of the world.” By his reckoning, we’re moving into a post-consumption society in which the ownership of stuff no longer matters. Who needs to own a chainsaw, or even a car, when you can share one? As Catherine Rampell pointed out recently in The Washington Post, even preschoolers recognize that companies like Uber and Airbnb have nothing to do with sharing as most of us understand it. Someone who owns capital charges others for temporary access to it. How others pay that charge—through barter, with currency, or by some other means—is not particularly relevant. The so-called sharing economy is still capitalism.

What is relevant is how people accumulate value that they can exchange for what they need and want. Rifkin believes that large, centralized organizations will crumble as customers and employees realize that those organizations no longer serve a purpose. “What if,” he asks, consumers “began to use the distributed, collaborative nature of the Internet to create lateral economies of scale”? What if they could “[skip] all the middle men, markups, and margins on the traditional capitalist value chain”?

“What if,” indeed. A future in which most people are micro-entrepreneurs (to borrow a term from the international development sphere) is not likely to be a bright one. That, as Rifkin notes, is what the world looked like before the Industrial Revolution. There’s a reason that people desperately tried to escape that world—and that people in developing countries are still trying to escape it. In developing economies, micro-entrepreneurship (farming, petty trading, cottage manufacturing) accounts for a large part of many families’ income, and most people in that situation report that what they want is not to expand their microenterprise, but to land a secure, decent-paying job.

In developed countries, meanwhile, micro-entrepreneurship has returned in the form of uncertain jobs and lingering unemployment. Those who have been able to use Etsy, Uber, or TaskRabbit to find a happy replacement for a traditional job are few and far between. As other writers have noted, hustling to survive in the sharing economy that Rifkin lionizes is as likely to be soul-crushing as not.

Still, Rifkin argues, perhaps it won’t be so hard to scramble for what you need once everything has become practically free. He cites John Maynard Keynes’s vision of a future in which little labor will be required to meet everyone’s basic needs and people will spend much of their time in leisure—and he says that this vision will soon be realized. Yet the Keynesian utopia has failed to materialize for a very simple reason: There is always something more to desire.

Barter and sharing economies are tremendously inefficient; that’s why they have only a niche presence today. Technology reduces some of those inefficiencies, but not by any means all of them. Rifkin suggests that cooperative associations will soon overthrow corporations as the dominant way to organize activities that require large amounts of capital and coordination. The reason that corporations are so prevalent is that they provide the cheapest way to align the competing interests of multiple stakeholders—from investors to managers to employees. Nothing about the Internet, solar power, or 3D printing will change the fact that individuals have conflicting needs and desires.

In fact, there is a remarkable technology for turning competing interests into the common good, but it isn’t new: markets. Markets are imperfect, but they work better for this purpose than most alternatives in most situations. Even for Rifkin, the future consists of people trading in markets. After all, people still need a venue in which they can “share,” barter, and trade. In other words: Meet the new boss, same as the old boss.

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  • Casey Czarnomski's avatar

    BY Casey Czarnomski

    ON February 18, 2015 02:46 AM

    Corporations will no longer be prevalent when they are no longer cost effective. When things cost nearly nothing to manufacture, and people do it at home, there is no need for the business to supply it. Who will buy a car, when it runs off nearly free electricity? Why buy a prefab car, when you can have a custom designed one with everything you need? Why own a car when you can have access to one anytime you need it, for much less cost? Why buy a house for hundreds of thousands of dollars, when you can have one custom printed for 95% less? Just because you can’t wrap your mind around it, doesn’t mean it won’t happen. The second industrial revolution is played out. Get used to a world that moves ahead, and doesn’t kill itself standing still.

  • Casey Czarnomski's avatar

    BY Casey Czarnomski

    ON February 18, 2015 03:10 AM

    In your final paragraph you mention how “...for Rifkin, the future still consists of people trading in markets.” Maybe if you consider free access to all a market. You seem to fail to understand that the digitization of the goods and services provided removes the market from the equation. There is no longer profit to be made. You can currently download a .stl file and print any object at cost of materials. When those materials are reused, or recycled there is no added cost. What Rifkin does state, is that capitalism will only hold a niche market. An important niche that will profit almost entirely off of bringing new technologies to bare. The world is doing this. The EU is doing this, The UN is doing this. China is doing this. The world has noticed. Time for the US to wake up, and clear our heads from the fog of the second industrial revolution. If we try to ride the wave to the end, well be stuck on the beach and die. Do you want our nation, to be the last to change? Going from the best standard of living to the worst in the matter of a decade? Refusing these truths will lead to ruin.

  • Dimitrios Papafotis's avatar

    BY Dimitrios Papafotis

    ON November 24, 2015 11:16 AM

    Thank you. THANK YOU!!!!! I have been trying for a whole 8 months to end this book which was so full of nonsense that it seemed endless. I am greatful to read your review, the book was so acredited that I also thought I was missing the whole essence. Thanks again!

  • alan2102's avatar

    BY alan2102

    ON April 11, 2016 11:56 AM

    Unconvincing review. For just one thing: what do airbnb and uber have to do with the sharing economy? Answer: nothing, even though the author assumes them to be well nigh synonymous.

  • JNDillard's avatar

    BY JNDillard

    ON April 26, 2016 02:22 AM

    It is easy to erect straw men arguments and triumphantly knock them down as this author has done. Offering no alternatives but the status quo, he confuses his inability to grasp a new emerging model with the delusion that his dogmatic commitment to a clearly dying status quo is better. Amazing what passes for education and intelligence these days.

  • fostertom's avatar

    BY fostertom

    ON May 3, 2016 11:07 AM

    Each generation finds a way to distance itself from its ancestors by some unbridgeable attitude change. Usually it’s a gesture that does move history along but only in much diluted form. My generation, the free-love hippies of 65-75, dropped their ideals and became the captains of current industry, banking, politics etc (just recently superceded by the get-rich-quick yuppiesof 75-85). This reviewer sounds like one of the above. But the present generation - the Millienials - is different because they have not just an attitude but are the first inheritors of the new world/humanity brain - the internet, social media, big data, all-by-all surveillance etc. The inventors of the new tools - the Microsofts, Apples, Facebooks - only knew how to do it by means of traditional centralised corporations - but the new world brain implies totally otherwise - and the Milllenials are the first to take possession. For them it’s not just another attitude - they are already living the communal new brain, within the dying shell of the individualistic old. They can’t join the latter world of private possessions even if they wanted to - for the first time the bottom rung of the housing ladder is out of reach for Generation Rent, as starter-incomes are driven down and privatised costs spiral. For the Millenials there’s no going back and by their self-created sharing/access response have already for example ruined the traditional music publishing industry - and others - and more to come.

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