Throughout time, people have made some dire predictions concerning the future of capitalism and how things might turn out.
- Karl Marx believed that Capitalism would end in bloody revolt as the gap between workers and their employers widened to the point that they would “have nothing to lose but their chains”, and that this would bring about a classless society.
- Adam Smith also believed that such a revolt was inevitable, but he believed that the impoverished workers would be slaughtered by their well-connected employers until a labor shortage ensued–forcing employers to raise wages.
- Today, there are many who believe that the capitalist system will either collapse under the weight of unsustainable debt, burn out its fuel resources, or burn up the planet–whichever comes first.
Today, I would like to propose a bold new vision of the future–one that embraces some of these elements, but which rejects others. I would like to show you the impending death of capitalism, when and how it will happen, and the aftermath that will follow.
The Death of Capitalism
The end of capitalism is near, but it will not come about in the way that anyone has predicted. It will not come about by violent revolution; nor will it be caused by financial collapse, “peak oil”, or global warming. No, Capitalism will be killed by the one thing it cannot possibly survive–ABUNDANCE.
You see, technology is advancing at an exponential rate. This is not merely a colloquialism or figure of speech–it is LITERALLY advancing on an exponential curve. We can see this if we actually plot development over the course of the past 100 years. Peter Diamandis and Ray Kurzweil have done a phenomenal job of doing exactly that–and because of this have been able to accurately predict technological advances over the past fifty years.
To give you an idea of what this means, I recommend watching the following video–which sums it up far better than I ever could.
Exponential development is unlike anything humans have ever experienced up until this point in our evolution. Instead of growing in linear steps (1,2,3,4…), we are taking exponential steps (2,4,8,16…). And all you have to do is take a calculator and keep hitting x2, x2, x2 to see where this is headed. You hit x2 ten times and you are at 1,000; you hit it five more times and you are at 32,700; twice more and you hit 131,000…by the time you hit x2 20 times you are at a million. And THAT is where we are today.
All our current technology has matured to the point that our output is measured in millions of units. We have hit the “knee” of the exponential curve. Different industries advance at different rates, but on average industries double in capacity every three to four years. That means it will only take another 30-40 years to hit that x2 button ten more times–and by the time you get there output is measured in BILLIONS.
How Abundance Kills Capitalism
When we talk about production, we are not just talking about raw output, we are talking about output PER DOLLAR, and output PER MANHOUR. Today, it only takes 3,000 people working at Tesla Motors to build one million cars per year. When Henry Ford built his Model-T factory, he employed 250,000 workers to do the same job. And the car Tesla manufactures has a hundred times the horsepower, and it can achieve speeds Henry Ford never dreamed of.
However, the people that Ford employed served another purpose–they were also his customers–and he made it a point to pay them enough money so that they could afford to buy the cars that they built. Today, we are suffering from a lack of demand for goods and services, not because people do not want them, but because they cannot afford them.
More and more people cannot find adequate employment as automation wipes out entire categories of work, at faster and faster rates. Experts in technology and automation, along with engineers at schools like MIT, believe that within ten short years 45-75% of all jobs could be automated.
This will hobble the capitalist system, but even mass unemployment will not be what kills it off in the end.
Capitalism can adapt to care for the unemployed, and continue to limp along for a very short while. Government handouts and private charity will see to that–along with hundreds of years worth of tradition and institutionalized power. No, what ultimately kills Capitalism is CAPITAL…cheap, Abundant, CAPITAL.
How CAPITAL Will Kill Capitalism
Even as the cost of production is dropping exponentially, so is the cost of CAPITAL. Machines that once cost hundreds of thousands of dollars can now be purchased for less than $30,000; by 2030 they will cost less than $1,000; less than $100 by 2035, and $10 by 2040–THAT is the power of exponential manufacturing.
By 2040 we will have a device for less than $1,000 that can print off a computer, a car, or even a HOUSE. We will also have a complimentary device for the same amount that can extract abundant earth minerals–glass, iron, aluminum, and titanium–from the ground beneath our feet to produce materials for the printer. It can also extract carbon from the atmosphere, and combine it with water to make fuels and polymers. Together these two machines can be used to make all the parts needed to make copies of themselves.
Once these two machines exist, we can duplicate them over and over again at increasing rates and lower cost. All it takes is ONE generous person to give another the ability to produce everything they need from ROCKS and DIRT. They can make solar panels for energy, along with tools and materials to plant gardens, build houses, and live comfortably.
When people are no longer dependent on employment for their basic needs and can live independently of others–THAT will spell the end of capitalism. No amount of corruption or government force (short of mass genocide) can stop it. Concerted action taken right now might slow the process by a few years, but even the full economic might of every corporation in the world would not be enough to stop it.
So YES, we are rapidly approaching the end of capitalism. This is not a cause for alarm, but to celebrate. What will follow remains yet unseen, but I have faith that the future will be brighter than we think.