Excerpt from a piece by Jeremy Rifkin in The New York Times, March 16
We are beginning to witness a paradox at the heart of capitalism, one that has propelled it to greatness but is now threatening its future: the inherent dynamism of competitive markets is bringing costs so far down that many goods and services are becoming nearly free, abundant, and no longer subject to market forces. While economists have always welcomed a reduction in marginal cost, they never anticipated the possibility of a technological revolution that might bring those costs to near zero.
The first inkling of the paradox came in 1999 when Napster, the music service, developed a network enabling millions of people to share music without paying the producers and artists, wreaking havoc on the music industry. Similar phenomena went on to severely disrupt the newspaper and book publishing industries. Consumers began sharing their own information and entertainment, via videos, audio and text, nearly free, bypassing the traditional markets altogether.
The huge reduction in marginal cost shook those industries and is now beginning to reshape energy, manufacturing and education. Although the fixed costs of solar and wind technology are somewhat pricey, the cost of capturing each unit of energy beyond that is low. This phenomenon has even penetrated the manufacturing sector. Thousands of hobbyists are already making their own products using 3-D printers, open-source software and recycled plastic as feedstock, at near zero marginal cost. Meanwhile, more than six million students are enrolled in free massive open online courses, the content of which is distributed at near zero marginal cost.
Industry watchers acknowledge the creeping reality of a zero-marginal-cost economy, but argue that free products and services will entice a sufficient number of consumers to purchase higher-end goods and specialized services, ensuring large enough profit margins to allow the capitalist market to continue to grow. But the number of people willing to pay for additional premium goods and services is limited.
Now the phenomenon is about to affect the whole economy. A formidable new technology infrastructure – the Internet of Things – is emerging with the potential to push much of economic life to near zero marginal cost over the course of the next two decades. This new technology platform is beginning to connect everything and everyone. Today, more than 11 billion sensors are attached to natural resources, production lines, the electricity grid, logistics networks and recycling flows, and implanted in homes, offices, stores and vehicles, feeding big data into the Internet of Things. By 2020, it is projected that at least 50 billion sensors will connect to it.
People can connect to the network and use big data, analytics and algorithms to accelerate efficiency and lower the marginal cost of producing and sharing a wide range of products and services to near zero, just as they now do with information goods. For example, 37 million buildings in the United States have been equipped with meters and sensors connected to the Internet of Things, providing real-time information on the usage and changing price of electricity on the transmission grid. This will eventually allow households and businesses that are generating and storing green electricity on-site from their solar and wind installations to program software to take them off the electricity grid when the price spikes so they can power their facilities with their own green electricity and share surplus with neighbors at near zero marginal cost.
As for the capitalist system, it is likely to remain with us far into the future, albeit in a more streamlined role, primarily as an aggregator of network services and solutions, allowing it to thrive as a powerful niche player in the coming era. We are, however, entering a world partly beyond markets, where we are learning how to live together in an increasingly interdependent, collaborative, global commons.
Eric Koch’s new book, New Beginnings, was launched on September 20. The book is available from 
This essay is a confusion regarding innovation, disruptive technologies and capitalism. Perhaps the author could star by defining these terms.
Isn’t this how an anthill functions?
As background information, may I present Jeremy Rufkin’s Wilipedia credientials. He was a speaker at the Couchiching Conference some years ago.
Jeremy Rifkin (born January 26, 2026) is an economic and social theorist, writer, public speaker, political advisor and activist. He is president of the Foundation on Economic Trends and the bestselling author of nineteen books on the impact of scientific and technological changes on the economy, the workforce, society, and the environment. His books have been translated into more than thirty-five languages and are used in hundreds of universities, corporations and government agencies around the world. His most recent books include the New York Times Best Seller The Third Industrial Revolution (2011), The Empathic Civilization (2010), The European Dream (2004), The Hydrogen Economy (2002), The Age of Access (2000), The Biotech Century (1998), and The End of Work (1995).
Rifkin is the President of the TIR Consulting Group LLC which advises national governments, regions, and municipalities on developing Third Industrial Revolution Master Plans. He is also the founder and chairperson of the Third Industrial Revolution Global CEO Business Round Table, composed of the world’s leading renewable energy companies, construction companies, architectural firms, real estate companies, IT companies, power and utility companies, and transport and logistics companies. Rifkin’s global economic development team is the largest of its kind in the world and is working with cities, regions, and national governments to develop master plans to transition their economies into post-carbon Third Industrial Revolution infrastructures.
Since 1994, Jeremy Rifkin has been a senior lecturer at the Wharton School’s Executive Education Program at the University of Pennsylvania, where he instructs CEOs and senior management on transitioning their business operations into sustainable Third Industrial Revolution economies.
Rifkin’s monthly column on global issues has appeared over the years in many of the world’s leading newspapers and magazines, including The Los Angeles Times in the United States, The Guardian in the U.K., Die Süddeutsche Zeitung and Handelsblatt in Germany, Le Soir and Knack in Belgium, L’Espresso in Italy, El Mundo and El País in Spain, Kathimerini in Greece, Informatíon in Denmark, De Volkskrant in the Netherlands, Hospodárské Noviny in the Czech Republic, Wort in Luxembourg, Eesti Päevaleht in Estonia and Trud in Bulgaria.
Brave New World!
Stop the bus, please, I want to get off.
If the prophesied scenario of Jeremy Rifkin’s End of Work: the decline of
the global labor force and the dawn of the post-market era (1995) gets ever fully realized (thus fulfilling Marx’s wishfully ‘scientific’ prognosis) it is bound to effectively put an end to ‘capitalism’ along with its ‘anti-‘. What a relief.