What Is Postcapitalism?
A glimpse into our future
Note: This piece is a speech delivered to Pilgrim House UU church October 24, 2022
Before I get started today, I had the honor and privilege of attending a memorial service for the great Minnesota poet Robert Bly yesterday. Many of you may know of him. He was a friend and a mentor who died almost a year ago, and the memorial was delayed due to COVID. Yesterday, we got to give our respects and remember his many contributions.
One poem that was read was his translation of a poem by Antonio Machado which I want to share with you because it asks a question relevant to climate change, which is part of what we will be talking about today. Here it is.
The Wind, One Brilliant Day
The wind, one brilliant day, called
to my soul with an odor of jasmine.
“In return for the odor of my jasmine,
I’d like all the odor of your roses.”
“I have no roses; all the flowers
in my garden are dead.”
“Well then, I’ll take the withered petals
and the yellow leaves and the waters of the fountain.”
the wind left. And I wept. And I said to myself:
“What have you done with the garden that was entrusted to you?”
— Translated by Robert Bly
I want to thank you for inviting me to speak with you today about the new postcapitalist world that is coming. As I prepared for this talk, I sat with some friends up in Cable, Wisconsin where I live, and told them what I was working on. One friend asked the key question: Give me the short version — What is postcapitalism?
The short version is super easy. Postcapitalism is the economic system that will replace capitalism. It’s not socialism, and it’s not that hyper-capitalistic libertarian system Ayn Rand promoted. Postcapitalism is something qualitatively different. It is a new and different way. A radical shift. A new system altogether.
But that answer is a cop-out. It says: There is something new and delicious under this veil, but I won’t show it to you! You asked me here today to show it to you, and my promise to you is that I will do so.
So let me put it this way: The new postcapitalist world is a radically different world based on principles and ideas that are not capitalist, not socialist, and not communist. The basic ideas of all those systems are fundamentally industrialist in nature.
Postcapitalism is none of that.
Postcapitalism replaces the fundamental principles, ideas, and metaphors of global capitalism with those of a digitalized, automated, networked world of postcapitalism. The qualitative differences are clear.
Where capitalism is built on hierarchy, the postcapitalist world is built on egalitarian networks.
Where capitalism is built on violence and coercion, the postcapitalist world is built on voluntary collaboration.
Where capitalism is built on extraction, the postcapitalist world will be built on conversion.
Where capitalism is built on scarcity, the postcapitalist world is truly abundant because it provides infinite supply at no cost.
Do you see the difference?
The next thing my friend asked was this: Will we see it in our lifetime? The answer is probably not. It is going to take decades to unfold. And yet, it can be speeded up with care and attention from all of us, and because a postcapitalist society is the ultimate answer to climate change, it is in all of our interests to participate and help it speed up.
So what might this new world look like?
Imagine a world in which… No one owns a car. Instead, we simply summon a driverless vehicle that reliably appears in less than one minute to take us wherever we want to go.
Imagine a world in which… Everything you need or want is abundantly available at no cost.
Imagine a world in which… No one is hungry. Food is produced at home on an as-desired basis — there is no need for grocery stores, warehouses, or even farms.
Imagine a world in which… Energy is free.
Imagine a world in which… No one has a boss because no one needs a job and income is irrelevant.
Imagine a world in which… All work is performed for the joy of doing it, or it is handled by robots and artificial intelligence.
Nervous yet?
These are just a few aspects of the postcapitalist world that is coming our way.
I know this sounds pie-in-the-sky, but over the next 30 minutes or so, I promise to show you two things. First, it is not idealistic or aspirational, but rather inevitable. Second, it is essential because postcapitalism is the only truly viable solution to the world’s greatest challenge — climate change.
First Things First: Why Capitalism Will Collapse
Capitalism will not be able to continue on its centuries-long path of gradual, continuous growth because of three discontinuities emanating from its intrinsic logic. Those discontinuities are:
First, capitalism cannot price free, abundant products and services
Second, it cannot create demand among superfluous workers
Third, it cannot account for externalities
Let’s take abundance first.
We are in the midst of a digital revolution that is creating a digitalized economy. While this may seem innocuous, the first discontinuity is that markets cannot figure out how to handle digital products — and they never will. To understand what I mean, I need to take a brief detour into how markets set prices under capitalism and show you how those same mechanisms do not, and indeed cannot, work for digital products.
How Prices Are Determined in Capitalism
Capitalist markets set prices using the law of supply and demand. This law states that prices are determined by the ratio of supply to demand. Hence, the higher supply is in relation to demand, the lower prices will go. The more demand increases over supply, the higher prices will go. It is a simple concept.
While the pricing mechanism of supply and demand suggests that prices fluctuate as supply and demand change, there is one limit: Prices below the cost of production cannot be sustained. Rational businesses will not produce at a loss, so the cost of reproduction functions as a real-world limit on how far market prices can decline. When businesses opt out because prices go too low, production stops, supply goes down, and that makes prices rise again. In other words, if the cost of reproducing a car is $5,000, no one will produce that car if the market will only pay $4,000 because every car produced loses money.
Now, What Happens to Supply and Demand in a Market for Digital Products?
Digital products have a unique feature — they have no cost of reproduction. Think of ebooks, for example. Once an ebook is on a server, it can be downloaded one time or a million times at no difference in cost to the producer. This fact creates a problem for markets in two ways. First, if the cost of reproduction is zero, then there is no downward limit to prices until the product is free. Second, supply is infinite. In other words, the limited supply (or scarcity) on which pricing depends has turned into abundance. There is an infinite supply. Under these conditions, the law of supply and demand can no longer accurately price products in the marketplace, and prices fall until the products are free. In other words, the market function on which capitalism depends no longer works. This problem was so acute when ebooks first came out that the publishers had to collude to establish minimum prices. Such collusion is not capitalism, it is a monopoly and the players were sued and punished.
It is one thing to think of ebooks and music, but the reality is that the entire economy is increasingly digitalized and susceptible to the same dynamic of abundance. All products are increasingly digital. Robots provide labor with no incremental cost. 3D printers have most of their value locked up in their digital plans. Same with artificial intelligence, solar panels, and other conversions from energy to matter, especially food. As products continue to take on more and more digital components, or as they become completely digitalized (thereby replacing traditional products), markets in those products will break down — just like they did with ebooks.
Here is the problem: When products are free, the entire rationale for capitalist investment fails. Capitalists don’t invest to sell free products, and they don’t pay workers to produce free products. Capitalism requires the capability of a profit, but no profit is available when the market cannot create a price. The economy can handle a few product categories collapsing in price, but as digitalization spreads to construction, cars, clothing, and even food production — all of which are currently happening — capitalism ceases to function in any meaningful way.
Free labor in the form of robots presents the same dynamics in the labor market, except that rather than disincentivizing capitalists to produce, this dynamic disincentivizes workers to work. Why work for free? In capitalism, you need money and so you work, but if work won’t produce income, there is no reason to do it. People leave the workforce.
Finally, capitalism cannot account for externalities like climate change because it cannot allocate the costs. Externalities come in the form of pollution, systemic financial risk, social problems, disease and debilitation, and wasted energy. For all of capitalism’s history, these externalities were treated as unfortunate byproducts which were largely someone else’s problem — the people downstream, the government, the poor and poverty-stricken, or the indigenous inhabitants. As it turns out, it is easy to build wealth when you don’t have to pay all the costs.
Climate change is a final reckoning. It demonstrates that the externalities must be accounted for. There is no escape — not for the wealthy, not for the poor, not for business, labor, or consumers, and not for anyone in any given country. It cannot be made into someone else’s problem anymore, but capitalism cannot allocate the costs. If and when it does, the capitalistic enterprise will no longer be profitable and it will fail because the new expenses wipe out the profits. Because it cannot allocate the costs, capitalism socializes them through government taxation. But even with carbon taxes, this is a blunt and ineffective tool, and even if it worked, the businesses would fail. Capitalism cannot work if it counts all these expenses. It was designed that way.
The Inevitable Collapse of Capitalism
One would think that, given these three realities (digitalization, automation, and climate change), the capitalists would change course. Maybe, but here is the problem — they cannot help themselves. The capitalist system intrinsically requires all actors to consistently drive costs of production down to increase profit margins and stay competitive. Hence, they will digitalize everything, automate as much labor as possible, and externalize all costs that they can. As digitalization happens, they all have to digitalize to keep up. The same is true of robotic production — anyone producing without robots will not be able to compete. For businesses, incurring the expense of unilateral action on climate change makes it impossible to compete. Capitalism cannot stop its relentless juggernaut because its laws of motion require actors to push the juggernaut or die. Cut costs, eliminate labor, externalize expenses. This is what makes the collapse inevitable. Digitalization, robotic production, and confrontation with externalities will continue to feed the three discontinuities, and there is no way for capitalism to stop it.
The Four Transformations in Detail: Our Postcapitalist Opportunity
The opportunity for transformation lies in the earliest possible move to postcapitalist principles. We need to articulate, celebrate, and advance these ideals, and while they are inevitable, it is not inevitable that humanity will be in good shape when it does. To review, the four transformations are as follows:
Capitalist mechanistic hierarchy is replaced by postcapitalist egalitarian networks.
Capitalist violent coercion is replaced by postcapitalist voluntary participation.
Capitalist extraction is replaced by postcapitalist conversion.
Capitalist scarcity is replaced by postcapitalist abundance.
By replacing the old capitalist principles, the new postcapitalist principles offer the possibility of a completely new way of organizing society. Words are one thing, but what do these ideas mean? And how will they change our society?
I don’t have time today to discuss all four of these, so let’s take the new networked world as an illustration of how these changes will affect culture to its core.
Transformation 1: The New Networked World
Capitalism was built on the imagination of the machine and the hierarchical structure of the office. These two metaphors became the lenses through which humanity saw the world. Nature became hierarchical and we put ourselves on top of the hierarchy. Corporations developed offices to hold the places of the hierarchy regardless of who filled those offices. We even structured society along hierarchical lines, many of which as best outlined by Isabel Wilkerson’s book Caste. Hierarchy, it seems, was everywhere.
Along with hierarchy, we had the metaphor of the machine, which eventually developed into systems thinking. We learned how inputs could be processed into outputs, and we built those ideas into the industrial systems that underly capitalism today. Even our most holistic ideas like ecology and today’s alternative healing modalities still cling to an underlying mechanistic notion. The only difference is that they favor inputs that are not conventional.
Thus, mechanistic hierarchy shaped how we perceive the world, and they colluded together to form the foundation of capitalistic thinking. Modern corporations could never have been possible without the hierarchical office structure that rose from this imagination. We could not have exploited nature as we have without the notion of a mechanistic world — a dead world devoid of spirit. And as money rose to become the expression of hierarchy and machine, its mechanistic accumulation became the essence of our modern, capitalist world.
Here’s the thing: A new metaphor is coming and it is called the network.
Networks are the opposite of hierarchy. Rather than dominance, networks feature connection. Rather than hierarchical offices, which outlast the individuals who occupy them, networks are made up of relationships and connections between real people. In a hierarchy, the structure is the key thing; in networks, the person is the key thing. In a network, when the person disconnects, all their relationships do as well.
When networks become the dominant mode of organizing society, thereby replacing hierarchy, our whole way of thinking about the world will change with it. In a hierarchy, the predominant social currency is power as expressed in the exercise of the power of the office. In a network, the predominant social currency is influence, as expressed in one’s ability to influence opinions, ideas, and people. Whereas hierarchy spurs competition for the limited number of positions of power, networks open the possibility of unlimited connections and an abundance of influences from many different sources. People do not dream of attaining power over others anymore, but rather of connecting to more people in meaningful ways.
Today’s networks illustrate the human will to work together to create something valuable. Think of open source software in which networks connected around the world create digital programs of great value, which no one owns, and anyone can use. But that is only a nascent beginning. Other possibilities are huge.
Thus, networks create a completely different mental model of the world — one in which power dynamics are almost incomprehensible because there is no hierarchical mental model to support it. Without any sense of the privilege of office, what is the value of creating an imagined office of racial or ethnic supremacy? In networks, the projection of influence occurs through connection, not through domination or the projection of power.
I am not saying that the rise of the network will solve all social problems — not at all. But if it replaces the hierarchy as the primary lens through which we understand the world, very different social dynamics, enterprise structures, political influences, and even environmental understandings will be supported.
What It Means
Postcapitalism represents the most challenging notion in social theory today. It affects every aspect of society — religion, social structures, politics, economics, safety nets, military motivations, and business. Careers will be affected. Cities will change. New methods of living will make our present look as quaint to the future as the peasantry of old looks to us today. A new world is going to emerge no matter what; the question is whether it tips into dystopic possibilities or turns toward opportunities for a better world. To shape it into a better world, we need to understand the most exciting opportunities and most innovative possibilities that are emerging — and they are all over the place! We just need to know, explore, read, and think for ourselves about what could be.
The End of Systemic Fear
Consider the four principles that underlie capitalism: hierarchy, violence, extraction, and scarcity. How can one view the world through anything other than a lens of fear? That some people do is a testament to their strength, their good fortune in life, and the good work they have done to achieve success. But it doesn’t change the reality that the main tone of life in such a world is fear — fear that I won’t get my share, fear that someone will take mine from me, fear that my opportunity will disappear.
This fear is critical to understand because it is the emotional source feeding sexism, racism, homophobia, and xenophobia. It underlies war and competition. It makes us forsake our fellow human beings, forsake the natural world, and even forsake our own lives in an endless pursuit of an unachievable level of security. Fear drives anxiety. Fear is sustained by capitalism’s hierarchical worldview, the competition resulting from scarcity, and of course, the violence endemic to the system.
Where is the fear in egalitarian networks, voluntary collaborative networks, conversion, and abundance? How does oppression sustain itself without fear? Without scarcity? Without competition for survival? Postcapitalism will transform the core principles of society and it will be experienced as a relief from fear. When fear dissipates, the whole apparatus of systemic oppression can fall away.
Besides the elimination of fear, what will this world look like?
Let me give you a few examples before we take questions.
First, today most of us drive everywhere we go. Whether we go somewhere to procure goods, go to work, or go meet people, most people drive. That means we own a car. It means there must be a place to park that car, service that car, fix that car, repair it and insure it. In a fully digitalized world of postcapitalism, none of that will be true. We won’t own cars, we will beckon a driverless vehicle to give us a ride. Everyone will do this. Just send a text or use an app, and the car shows up in under one minute (because they are so ubiquitous). You go where you want to go until you beckon your next ride. No one will own a car because there will be no need for it. And hence, no parking lots, no service stations, and no insurance.
Second, nearly everything will be manufactured through 3D printing from digital plans. Right now today, entire home developments of 3D-printed houses are being built. The wall construction is done in 90% less time at a fraction of the cost. They use no lumber as they are made of poured concrete. Foundation, roofs, windows, and electric wiring and plumbing are still traditional, but it won’t be long before those change too. Adidas has created shoe factories that can produce 500,000 pairs of shoes a year with no shoemakers whatsoever. Instead, a few dozen people maintain the robots and 3D printers that produce the shoes. Indeed, robots are coming to fast food, car manufacturing, wind turbine construction, and nearly every manufacturing area you can think of. Why? The labor is free. Costs go down. You have to compete.
Third, people love to challenge me with this comment: What about food? You can’t eat digits! Well, true… almost. A company in Finland called Solar Foods is growing edible protein from carbon in the air, electricity, and water. No plants. No animals. Just microbes. They add nutrients and vitamins to feed the microbes in a fermentation process, and the result is Solein, an edible protein. One report described the process as similar to wine-making wherein the microbes are fed with carbon and water rather than sugar. It takes almost three days to complete a batch of Solein, far less than it takes to grow a chicken (six weeks) or a cow (1.5 to 2 years). By all accounts, Solar Foods is an early-stage company, but it is building its first factory and expects to market Solein as early as 2023.
I use Solein as an example of where food production is going. We are learning to grow meat without the cow and soon I expect to see tomatoes without the vine and oranges without the tree. In the meantime fully grown spinach, lettuce, and other greens are being grown indoors with controlled light, robots tending the crops, and AI reporting the status and needs of particular plants. Production is astronomically higher on a per-acre basis. Eventually, all this will be available on your countertop at home, and farms will be unnecessary.
Fourth, labor and the income it produces will cease to have meaning. When we can run a food producer or two on our kitchen counter to produce food, obtain energy free from the sun, and produce goods we need from free digital plans in our 3D printing machines, what meaning can money have? Why would anyone work? Instead of labor, we will acquire meaning in our lives by working toward things that are valuable for humanity.
How we make things and meet our needs are not the only things that will change. Society itself will undergo a transformation as the old assumptions all fall away, and as hierarchy gives way to networks, coercion gives way to collaboration, and scarcity loses out to abundance.
For example, social theorists and commentators have argued for decades that the system needs to be changed. Well, here it is — the system is going to change. When hierarchical relationships give way to networked relationships, what will be the impact on racism and sexism, for example? Why have racism when there is no need to be one-up on other people? When abundance and home production of the basic means of life becomes digitally possible, what will be the impact on poverty? On class? On inequality? I would submit that they have the potential to completely reshape how society is structured, and we have no idea what the opportunities might be. We can create images of solutions and shape our ideas and outcomes. If we don’t, we leave it all to fate.
In capitalist democracies, the power of the vote every few years is the primary franchise of the citizen. People take their vote rather seriously. They think about it and trouble over it because they are voting for a representative, and for most people that means the person they are voting for is a compromise. It is rare, indeed, that any one person agrees with any other person on all issues. The troubling over who to vote for is mostly about what to compromise — what positions with which you disagree are you willing to ignore and which positions are pre-eminent? These judgments tend to drive our voting decision, and normally one-third to one-half of the people don’t vote at all, apparently feeling that they won’t be represented no matter what.
But in postcapitalist politics, one possibility is that because people spend less time at work, they are more involved in self-government. Representatives become obsolete. Instead, people may vote far more regularly. As voting becomes electronic and digital, there is little reason why every issue, bill, or proposal can’t be put directly to the people. The whole idea of huge bills with stupid, irrelevant riders and hidden additions will become an anachronism — instead, we can vote on each granular issue. If there are government representatives, they will be charged with developing proposals to put to the people, not with making the decisions. Representative democracy could become obsolete, and self-government might become an actual reality.
As other social institutions change, so religion will be affected in its most cherished doctrines. The Protestant work ethic, for example, is an unsustainable theology in a world where no one can get a job. The Catholic doctrine of good works is senseless in a world of true abundance. New imagination will be applied to religious doctrines and the change will be decisive in how this new postcapitalist world develops.
With all these changes coming, perhaps the single most important is the last one I want to mention. Postcapitalism solves climate change. It is likely the only solution that solves the problem. The reason for that is simple… the rise of a postcapitalist system is the only completely involuntary climate solution out there. Many people advocate other solutions — degrowth, carbon taxes, reduced consumption, veganism, cessation of burning stuff, Transition, simplicity, population reduction, and much more. The problem with all of them is that they require people to choose against their desires and they require leaders to rise above the system to make changes that are good for the planet. Postcapitalism does not do this. Rather, postcapitalism creates a new system in which everyone must live, and which intrinsically solves climate change.
How does it do this? First, it is changing the economic basis of society. Abundant, free energy is coming, especially in the form of solar, wind, and geothermal. Initial investments are needed at this time, but the incremental cost of energy from these systems is near zero. In the case of solar, a paid-off system can be generating at 80% of its original capacity in 40 years. Capitalists will take us into these energy sources because they make economic sense. Electricity and digits will rule the future, and the need to burn stuff will cease. No burning, no carbon, No carbon, no climate change.
Likewise, the digitalization of products will replace many manufactured goods until the time when they can be 3D printed at home. Home production will radically reduce the need for the transportation of goods, and what will be transported will be handled through electricity-driven, driverless trucks. Again, no burning fuel. As consumers we won’t know that trucks are electric and driverless… it will just be happening.
Postcapitalist digital networks will continue to open the way for collaboration on global problems, especially climate change. But they will also enable political changes such as the direct democracy I already discussed, thereby freeing the political decisions of self-government from the hands of concentrated party control. Polls have shown for decades that Americans want a clean environment and action on climate change, but representative democracy could not deliver it. Direct democracy, delivered through digital networks with blockchain technology, can.
You see, postcapitalism is systemic. Our lives will be as ensconced in it as we are today in capitalism. Digitalization and roboticization cannot be avoided any more than capitalism can be avoided today. Postcapitalism solves climate change without having to convince anyone of anything. No changing your life against your wishes. No forced changes in your diet. No doing without or deciding to live worse than you are today for the promise of some better future. Instead, we have to do what human beings have always done — adapt to the system in which we find ourselves.
In closing, what we can do as a human community is tend to these changes. Watch them, shepherd them, and guide them. Many forces will array against the social changes postcapitalism enables, and they can successfully delay its promise — socially, economically, politically, and in the natural world. I believe the job of humanity is to open our eyes, see what is happening, and push the future we want to replace the abyss that opens in capitalism’s disruption. Just as the logic of capitalism developed from the metaphors of the objective, mechanistic universe, the new logic of postcapitalism will develop from the metaphors of digitalism. Both the perils and the opportunities must be understood so that we may shape the outcomes more to our human liking.
After all, Antonio Machado has asked us all a haunting question:
What have you done with the garden that was entrusted to you?
— Anthony Signorelli