Transcripts For CSPAN2 After Words 20140608

Up next on booktv after words with guest host Siva Vaidhyanathan author of the globalization of everything. This week bestselling author Jeremy Rifkin and his latest book the zero cost society. In that the European Union advisor argues that capitalism is on its way out and Communications Energy and listed just ask internet will lead to its demise by increasing production and distribution and effectively eliminating corporate profits. The program is about an hour. Host hello. Jeremy rifkin is with me today. I am Siva Vaidhyanathan from the university of virginia and we are going to discuss his newest book the zero cost society. Its also his 20th book which is quite a feat in and of itself this book takes the entire world as its subject that has a tremendous amount of focused on the current state and perhaps immediate future state of the u. S. Economy as well and so it ranges across so many topics. Im sure we will have a very rich set of discussions that we will link together quite nicely. Jeremy i was hoping you could explain the title. Thats a good way to start. The zero cost society. What do you mean by zero marginal cost . Levee put it into context. I think what is happening is we are just getting a glimpse the outline of a new Economic System entering onto the world stage. The collaborative comments. This is the first Economic System to emergency at hand of capitalism and socialism in the early 19th century so its a remarkable historic event with longterm implications for all of us around the world. The triggering agent for this great Economic Transformation is something called zero marginal cost. Let me explain. Theres a paradox deeply embedded in the heart of the capitalist market which has been responsible for the Great Success of the invisible hand over two centuries. The irony is this paradox is leading to the ultimate triumph of capitalism but that tribe is going to lead to its demise as the primary Economic System of the world and heres the paradox. In a capitalist market for sellers are continually probing for new technologies that can increase productivity reduce their marginal cost so they can put out Cheaper Products win over consumers and market share and bring back profits to their investors. Marginal costs are the cost of producing an additional unit of a good or service after your fixed costs are covered. Business businesspeople have always wanted to reduce marginal cost for obvious reasons. They simply never anticipated a Technology Revolution whose productivity was so extreme that it could actually reduce those marginal cost and produce and distribute goods and service to new zero making goods and services nearly free abundant in no longer subject to market forces. That is what is beginning to happen in a major way across the global economy. You know because of what you teach because you spend all a lot of time in the special media we saw the zero marginal phenomena affect the Information Industries over the last 10 years devastating entire businesses. First we saw nafta and the young people began to find ways to create software to share music files bypassing the capitaliscapitalis t market and Recording Industry. It didnt pay any royalties and it brought the Recording Industry to its knees. Then the zero marginal cost phenomena started to effect the newspaper and Book Publishing industry. Millions of consumers became the proconsumers and begin to produce and share their own knowledge and information. Wikipedia news blogs ,com,com ma people shared news together and of course publishing people started putting up their own ebooks for free and this meant newspapers went out of business. Magazines bellied up. The Book Publishing industry has been devastated by free ebooks and most recently and of course you can speak to this from the University Point of view massive open on line courses. We have six or 7 Million Students that are taking these free on line courses that operated near zero marginal cost top by some of the best professors in the world after receiving credit. This is now forcing universities to rethink their business model. In the last 10 years the zero margin cost phenomena has not been academic. It is devastated an entire industry but economists thought there would be a firewall. They thought okay this zero marginal cost would affect informational goods but it would not move over for the Virtual World to the physical world the brickandmortar world of energy and manufactured products so that firewall would not be breached. It is now being breached because the internet is now is standing to an internet of things a more expansive internet that has now allowed us to produce energy and products is zero marginal cost. Host the idea of the internet of things sounds in itself. Doxil to many people. The internet to our general way of thinking is about the inflow of information and the flow of data a distributed noncontrolled flow of data that seems to touch everybody in new and interesting ways every day and stretches the whole world. How would this apply to cars, two airplanes and two collections of everyday materials that you would buy at walmart . Guest the information internet which we are all very familiar with is just now beginning to converge with the nascent Energy Internet in europe and now in china and also beginning to converge with a fledgling automated logistics internet so the internet is expanding to three internets read the information internet the automated transport and logistics internet and creating one super and in the net called the internet of things. These three internets are then placing sensors across the entire Economic System to monitor the flow of data. We have sensors now connecting resource flows. We have sensors feeding data in from production lines, warehouses and distribution centers. We have centers on smart groves connecting electricity grid so we know what the appliances are doing at any moment. We have sensors connectinconnectin connecting vehicles in offices and stores. That big data coming in across the economy to these Free Internet communication Energy Internet and the distance internet is providing a wealth of data about what goes on at any given moment across the economy. We now have 14 billion sensors out there now and ibm says in 2020, 50 billion sensors and by 2030 perhaps 100 trillion sensors connecting everything with everyone. Later on we will talk about the questions of privacy and Data Security. Its exhilarating and frightening at the same time. Theres a lot of a lot of possibilities in a lot of challenges but whats interesting from the opportunity perspective millions of prosummers can now do this expanded internet of things in mind that the data coming through on their own multiples with their own maps and with that data coming through the system they can use analytics and create their own athletics like google and facebook today and dramatic we increase their own productivity reduce marginal cost in producing their energy and Free Enterprise just like they have now reduced the marginal cost of information goods on the internet. Its just beginning. Its only the first few years but its a tremendous shift in the economy. Host you use the word processor murder. Can you explain what a pro zimmer is . Guest its now coming into practice. Thats consumers and they become prosummers. Prozimmers produce, consume and or share their own goods and services. Let me give you two examples of how the internet affects the physical world and turns us into prosummers. Renewable energy 3d printing. We now have millions and millions of early adopters in europe who are actually producing their own Green Electricity with solar panels on the roof and wind hermits on their property and reducing it at near zero marginal cost. Turning it into electricity is still Little Pricey but its on an exponential curve just like we saw with computer chips in the computer industry. We had a twentyyear exponential curve with solar and wind. A solar lots cost 60 per one lot to produce it. Its 66 cents a watt today and it continues to go down but before they are paid back for the harvesting technologies the marginal cost of producing a unit of solar electricity or wind is near zero. You just have to capture it. The wind coming up the side of your building is free. You just have to capture it. So we have millions of people who are now producing their own Green Electricity at a near zero marginal cost. They are sharing it with each other on the emerging Energy Internet. To show you how fast its moving china has taken up the plan that ive outlined in my last book and now we are working on the new book. I visited the chinese leadership last year and after my visit they announced 80 billiondollar commitment to begin to lay out the Energy Internet of this phase of millions of Chinese People can produce their own solar wind and electricity and distributed across china. Id contrast the u. S. Is putting up 3. 5 billion which is centralized and not distributed. Europe and china are quite far ahead of this. Host people are making their own energy. How are they able to Work Together collaboratively to forage new works and wikipediwikipedi a comes to mind for instance. You good example of his 3d printed arctics in terms of the collaboration. This has hit us as a storm in the last few years. We now have hundreds of thousands and of medium and small sized social enterprises that are putting out their own physical product just like we use printers for software and producing our information goods. If you are a small 3d printer you can go up on the expanded internet of things and Download Free software to print out your product. Then you can use cheap recycled material as your feedstock using recycled plastic which can find around the neighborhood recycled paper and even sand and gravel is being melted down for feedstock and then you can powered your 3d printer with their own Renewable Energy from the emerging Energy Internet. Then you can take your product and transport in the future on the logistics internet with electric and fuel cell operated at zero marginal cost in soon driverless vehicles that operate at low marginal costs of this is an example where everyone can become a prosumer and not only consume their own goods but share their surpluses with each other over an emerging collaborative context. What has happened here is we are starting to see a debate unfold and that is its obvious that this near zero marginal cost effect is pretty significant. The question is what kind of Economic System and this is what i think you are getting at, what kind of Economic System would we need to envision in a world where millions and hundreds of millions of people could not use only not only their own information is zero marginal cost their own energy at zero marginal cost in their own manufacture products at zero marginal cost allowing them to bypass the market so what kind of system would you need . The economists are somewhat befuddling because they believe there are only two ways to organize the economy their private enterprise or the government or some combination in between. Capitalism socialism or if the social market economy. What what economists forget is theres a Third Institution that we rely on all of us millions of people around the world every day to provide an entire array of goods and services that are provided by the market and are provided by the government and are beyond the profit motive. We called this the social context of Civil Society. The notforprofit sector. Millions of organizations involved in Education Health Care Services assisted living for the Elderly Daycare Center sports environmental groups and the economist dont pay much attention attention to this sector but its a huge sector in terms of revenue. It accounts for 2. 2 trillion in revenue in the 40 countries surveyed and its growing faster than the private marketplace. Its growing at a fast clip and the u. S. Canada and the u. K. Its already over 5. 5 of gdp its growing all the traditional private Enterprise Market is shriveling. Its quite interesting. So what i think we are seeing is the emergence of the collaborative social economy. The trigger for that is a zero marginal cost infrastructure because its like a soulmate. For people who want to share things in the community. The internet of things is designed to be distributed collaborative its peer production and its scale so it encourages millions of people to bypass big Global Companies come together directly in produce and share with each other and eliminate all the middle of these Big Companies to markup the profit margin. You mention sharing. We are seeing millions of people now moving up on this economy. Theyre not just sharing information and Renewable Energy in 3d printer products they are sharing homes. They are sharing clothing. In past weeks even hearing about cloud surfing. We now have millions of people who are sharing their apartments and homes on this collaborative comment. For air bmv at zero or journal cost. Its done to the Hotel Industry what file sharing did to the Recording Industry. Once you have your fixed costs in place and you set up your web site the marginal cost of putting an additional apartment or home on their who wants to lease out their property is near zero. If you have a home or an apartment and want to lease it out for shortterm until you have covered your fixed costs. That is your mortgage is being paid your property taxes are being paid so the marginal cost of renting out your apartment or home is near zero. In new york alone last year air bmv was responsible for eliminating 1 Million Hotel mites and hotels because millions of travelers rented out spaces put up by small homeowners. Car sharing. We now have 800,000 people in United States sharing cars rather than buying cars and where they have access to a car not ownership. For every car you share that takes 15 cars off the road. Imagine the longterm impact of the Auto Industry when the millennial generation comes of age and they are sharing cars paid that means reducing 14 out of 15 cars on the road and that has impacts. s. Host are you sure its zerosum . Are you sure there are a car subtracted or 50 cars subtracted for every car shared and are you sure thats a Million Hotel rooms that didnt get occupy it and were taken off that merely an expansion of the supply . Guest theres a small expansion of supply that much of it is the gdp is growing slowly. We are seeing a shrinking in the growth of gdp around the world say you can take a little bit off the interest there because gdp is growing at a slower and slower rate. In fact what its doing is its taking the traditional changed economy and moving to the shareable economy so that means less business. Interestingly enough it drives the whole way we measure economic prosperity. We measured gdp gdp is the amount of output of goods and services and it doesnt differentiate between negative and positive. Involved in building aircraft for the military all goes to gdp. Here when people move to the collaborative comments the economic wellbeing is increasing but it doesnt count in the gdp. If you are a prosumer in consuming your own products thats not part of the gdp or fewer sharing your car or home at zero marginal cost thats a reduction of gdp. So its a completely different measure of economic wealth. Part of the reason gdp is going down a small part is this collaborative commons is coming up and people are moving beyond the market economy. Its now measured in gdp. Host you bring us all these good ideas zero marginal cost the internet of things the collaborative commons and the general sense of abundance and economy driven by abundance rather than one dripping by measured by scarcity. Is your book the zero Marginal Cost Society a prediction or an exercise in advocacy . Guest i think its looking at the trendlines. The Financial Times did a nice long review of the book a thoughtful review of the Financial Times and they said the difference between us and i take a look at the existing trendlines of what is happening as a trajectory rather than going into the future and coming back. So we see this trendline as great. We have experienced in the last 10 years the devastation of newspapers magazines Book Publishing and a lot of the Entertainment Industry at zero marginal cost. We are now seeing Renewable Energy in europe and places like germany where its 25 Green Electricity. Most of the players or consumers and Small Businesses producing new Green Electricity at near zero marginal costs. We are just beginning to see it creating products. Let me say the wild card is its its because that price is not going down. We are able to reduce our marginal cost to is zero and have sustainable economy. Climate change is the elephant in the room because the Climate Changes dramatically affecting the water cycle and we are getting more blog buster winter snows and long spring floods more dramatic droughts in the summer and we are now because of Climate Change seeing a drop in the decline of Food Production and water availability so if we cant tackle Climate Change and the price of food and water becomes prohibitive this shift to a new zero Marginal Cost Society will be rather irrelevant. The good news is the internet of things creates a third Industrial Revolution. It allows us to use less resources more efficiently move to Renewable Energies and greatly mitigate Climate Change if we can get there quick enough. I just dont know if we will get there quick enough. Host this reminds me of the previous predictive moment. You mentioned the book a couple of times John Maynard Keynes and his prediction he made in the 1920s that automation and technological advances would have course create frictional job loss and perhaps suffering but over the long term we would be so liberated from the drudgery of labor that we would have our Creative Process is freed and we would live in a world in abundance. You probably had had no way of imagining the variety of abundance is we outlined that but you say keynes was not wrong. Guest he wrote that essay to his grandchildren in 1930. Everyone was depressed about the depression and thought there was a plunge to the bottom half. He said you are going to hear new term called Technology Displacement with a large amount of employment. It machines means machines are replacing human beings more efficiently and cheaper. He said this sounds like bad news for the long run its good news. Let the machines do the work in and he said i can imagine my grandchildrens generation and great grandchildrens generations people being liberated from toil and jobs in bluecollar and whitecollar jobs and the technology will create traditional goods and services and most of us will be engaged in work on the social comments with a more meaningful aspects of community and using it in a more explicit way. Whats interesting about this is just zero marginal cost phenomena is affecting labor. The marginal cost of labor is going towards zero because we are introducing advanced analytics. We are introducing al gore is and artificial intelligeintellige nce robotics across a system and we are eliminating mass wage labor. I predicted that would happen in 1995. Controversial at the time but now i know its the economist magazine said mr. Rifkin got that spot on and in terms of the tram line trendline. We have virtual retailing. We have whitecollar service and shes being wiped out by Technology Displacement and now the knowledge workers are at risk. We dont need all the lawyers and all the accountants and radiologists. We have analytics that can do the job much quicker and much cheaper. We are headed to a near zero marginal cost labor. We have tired as vehicles that will be on the road in five to 10 years. Thats going to replace hundreds of thousands of Truck Drivers and bus drivers is said rep. We are already testing them on the roads in california. The question is if we are headed toward near zero marginal cost labor what does it say about keynes prediction . What do we do . How do we define the human journey . How are people employed in this collaborative commons in a zero marginal cost side . In the shortrun i think theres a silver lining. I think we have a 30year interregnum where we will have to build out the internet of things the platform for this Industrial Revolution. We have to convert our entire energy use in the world from fossil fuels and nuclear to Renewable Energy. That requires millions of jobs and thousands of businesses. We have to transform all the buildings to your own power plants he can generate Green Technology in your buildings. They are doing that in europe and china. We have to store the energy so it can be used and that requires millions of jobs. We have to put in an Energy Internet so we have to transform the entire electricity grid of the world. Imagine that to a distributed Energy Internet. Thats a 30 30year buildout with lots of jobs. We have to put in an automated transport of logistics so over the next 30 years we have got to generations who can still be involved in semiskilled skill or professional work to lay layout this internet of things but as the internet of things comes and its smart. Its intelligent. It can program itself with a small supervisory work for so we will have to ask what do we do then. Much of the employment already is now quickly migrating from the marketplace to the collaborative social comments. Thats because the social economy social capital requires humans engaging with humans and not machines. In the last 50 years the employment on the social commons than opera five notforprofit sector is gone up technologies have displaced workers. Just the way keynes outlines the more people are migrating to these more expansive types of jobs creating social capital which is a much higher calling than simply tending to my suspension the suspension if this is an derailed and anything could upset this whole development to the near zero partial cost world in 2050 or grandchildren might look back and they might be repulsed by the idea that their grandparents toiled for eight, nine or 10 hours a day in deadend jobs producing goods and services because they are going to be living in a more automated world where the machines do the work and they are going to see that loss of human value in the 20th century of mass labor with the same repulsion we see slavery and serfdom before the Industrial Revolution. These people we will be growing up in an automated world where they can be in the more trendsetting aspects of life. Im glad you pointed out the most poignant forecasts. Even though was the least thought of at the time. Host on the other hand you could be describing a world in which we are being asked to build our own coffins in dig our own graves in the process of laying to waste the very sorts of activities from which we derive social cohesion and a sense of accomplishments a sense of value in the world and a sense of being able to care for our project he. There are so many positive values embodied in the ethic of hard work and the ethic of working as part of a team in being part of building something great whether its commercial or noncommercial. To anyone whos watching who is not an accountant or lawyer and has been rendered potentially unemployed by this prediction why should we invite this . We after all can choose our policies, our leaders in the products we buy. Why should we put the brakes on . Guest it khanna mystifies believe the most efficient economy is where you sell your product at marginal cost. They just never thought our journal costs would be at zero and therefore no more price. Its too sweet of a deal for the human race to turn down. If we can produce sustainable abundance at near zero marginal cost for a wide range of information goods energy and products why not . Its the most sustainable economy. Right now we are addressing Climate Change and the u. N. Panel came out with an assessment report. Its a very grim story. They want to put benchmarks and move to Renewable Energy economy and we are stalled. What we need to realize here and this is what i say in the book the zero Marginal Cost Society. The zero marginal cost is the most sustainable framework you can have for an economy because it means we are producing with a minimum input of Materials Energy and labor so we can produce with a minimum use up our stuff. For example if you are car sharing and taking 15 cars off the road for every car share thats a reduction in co2 emissions in the huge amount of material that goes in the car. Millions of people are sharing their clothing that means instead of lying more clothing which uses a lot of resources and emits a lot of opal warming gases more people are sharing viewer or if people are airbnb sharing their existing domiciles that same admission of co2 and less resources being used. I think perfectly sustainable economy as a zero sustainable cost society. In terms of incentive economists have argued up to now if you are going to lose incentive. Theres a whole generation that doesnt believe that. They are calling themselves social entrepreneurs and business the Business Schools around the world are producing a new generation who use their creativity their entrepreneurial skills to advance this these Collaborative Networks because their primary goal is not dark at capital, its social capital. They are actually becoming as creative and entrepreneurial essays and entrepreneurial as we saw in the Marketplace Marketplace in the 20th century. Look at how many people have freely created software new forms of entertainment videos on youtube new kinds of news blogs and it goes on and on. They have done it with the creative thrust of an entrepreneur of thrust at least as significant as we saw the in the marketplace but its now social entrepreneurs beyond profit. I think it doesnt end but changes the economic frame rec and which incentive is created. Host seems the winners are those that are technologically adept highly educated cosmopolitan and outlook because they have the ability to create. Guest actually is the exact opposite. The reason a lot of the traditional Global Companies are little but word about this to say the least, this is a democratization of the economy. This internet of things allows millions of us to democratize communication which we have. If i had said to you in 1989 that 24 years later before a World Wide Web 24 years later 40 of the human race with cheap cell phones and desktop and theaters would be producing their own newsmaking available to each other at near zero marginal cost at the speed off like what would you have said . The centralized institutions in newspapers and magazines in both publishing which im involved in they have to separate the consequences of democratization of came negation. As we move to the internet to the expansive internet of things we now think of people producing and sharing their own clean Renewable Energy on microrids bypassing the power Utility Companies. We have now hundreds of thousands of young people producing their own 3d printed products via passing Big Companies. The real losers here are the vertically integrated Global Corporations of the 20th century. And i say a zero Marginal Cost Society they are the best we can do given the circumstances of the 19th and 20th century. Centralized energy centralize communication forces to create these integrated systems and put everything under one roof to create Cheaper Products. The internet of things because its lateral allows smaller players entrepreneurs and consumers to come together directly and eliminate all the middlemen of these vertical companies and democratize the rest of their lives. Its going to have its biggest impact in the developing world and its already we are starting to see that in india and parts of africa and china and asia. Host over the same 24 years we have also seen a remarkable increase in income at inequality especially in this country most acutely in this country and we have seen we could say if we look ahead three or four years this wild west democratization experiment we have seen with the internet could very well be over. Net neutrality is for the most part over which means theyre no longer is a level Playing Field for indication in the United States although europe decided to adopt it and they certainly dont have anything like an open internet in turkey or india or china or many other places in the world. One could say we just experimented with that awkward position. Nonetheless as we have seen a shift in resources to the financial or poor as more and more of our potentially reductive recessions are now in financial gains and much more that is invested in a 480 of information activities we have also seen an evacuation of a robust middle class. Why should we believe it would get better anytime soon . Guest of course im familiar with your work because you have done work in this area. There is no guarantee here. What ive outlined is the possibility of a new Economic System that collaborative comments that could democratize life around the world and create a more Sustainable Planet where we use the resources in a much more just and humane way. That is what we could go toward. On the other hand i think you hit the problem and that is we have entrenched interests from the second revolution the 20th century the telecom the Cable Companies the power Utility Companies. They are trying to thwart this process. Network neutrality as you mentioned is critical. The whole framework for the internet is based on Network Neutrality. Anyone can pay a Service Provider small amount of money to go up go up on the net and be treated like everyone else. You were not with a hind. You werent put at the beginning of the line. You werent discriminated on terms of price and the data was not to use against your interests. Network neutrality democratized information. Now that a lot of the treasures no brickandmortar industries are moving from the communications are back to the more expansive internet of things communication Internet Energy and logistics internet they are starting to say wait a minute we are not sure about Network Neutrality because of our industries go to near zero arsenal costs and theres no more profit we are out of business. In january the u. S. Court of appeals for the Second Highest Court as you know issued a judgment saying the federal Communications Commission their protocol on Network Neutrality was null and void because it wasnt in their mandate. Now the federal Communications Commission is stuck without a mandate. The telecom and Cable Companies are saying we created the pipes. You are using our pipe so we want want to charter different prices. We want to hold back some customers have put some of the front of the line. We may also want to control some of this data and use it with third parties forever testing etc. Its not just the cable and telecom companies. Now we have got to be concerned about the Internet Companies that we love. Our favorites Google Facebook twitter amazon. I use all of them. Im a big fan of google. I google every day. Its the magic box. It gives me the knowledge of the world that we are beginning see these Internet Companies which help create the social commons that potentially could get us to the zero marginal costs are now starting to look in some ways like the new global monopolies. They are starting to look like social utilities meaning if you have to go to google for all your knowledge that sounds like a monopoly. Google controls about twothirds of the Research Engine market in the u. S. In 90 of the Research Market engine traffic in europe. There are 6 billion queries on google a day. Facebook, almost one out of every six human beings on this planet is on facebook and they control a lot of social media. Twitter we have 600 Million People tweeting so what im suggesting is we will have to have a collegial and robust global conversation between the investor s. And the commoners on the collaborative comments on how we can have the best of the social utilities but understand they need some form of local governance and the stakeholders need to be the Civil Society and not forprofit sector not just a private enterprise and government and we have to find a way we can get the best out of these Internet Companies that make sure it allows us to democratize the economy on a collaborative comments. Its going to be a big struggle. Host described three internets. First the information internet and the one we are familiar with and as we have discussed it may be over for that. Theres a concentration of power involved with the internet in search of a Network Neutrality seems dead in the water in United States and much of the world anyway. Guest europe is dealing with it aggressively. As you know i advise the European Union. Host that is one of the interesting takeaways of the book. Europe is making certain policy decisions in the United States is not. Each of these policy decisions informed by politics can yield very different results in terms of the various issues you describe. The other two the other two internets the internet of things in the Energy Internet that you have described in to see the early stirrings and maybe the sprouts of these gardens coming. How can we know that those two wont be corrupted privatized leveraged and radically controlled either by oligarchic commercial interests or oppressive states . We have seen both of those things happened with the first internet. Guest i advise the European Union and have for a long time and i was privileged to be a principle architect of the third Industrial Revolution plan which moves the internet of things forward. I have also advised chancellor merkel in germany where they are pushing this forward. We have history with germany. In germany they power and Utility Companies like eon and epw bird decimated in less than six years wind feed in tariffs allowed solar and wind energy. Over 25 of electricity in germany is solar and wind. We are heading to 35 Green Electricity by 2020 and guess who is producing its . Its millions of small players paid Big Power Companies are producing less than 7 in last week directors at eon said we cant compete with the zero margin costs so what happened to the Recording Industry is happening to power and Utility Companies. It wipes out centralize power. We have that history however there may be countries that may try to afford this because they want to keep an oligarchic control over energy but europe which is the largest economy in the world in terms of gdp is setting a framework. Now im reasonably hopeful about china. The new premier bread my last book in english and instructed the government to move on the Energy Internet and 80 billion dollar four year commitment means millions of Chinese People will produce their own green elect tristan de at near zero marginal costs of error rays of hope. The u. S. And canada are the outliers right now. They are stuck in the 20th century with tar sands in canada shale gas in the u. S. And woefully behind this transition to a collaborative comments zero Marginal Cost Society. Host you have an United States an United States breakout the Koch Brothers pushing laws in states to put fees and taxes on solar panels. In addition virginia where i live the previous governor in the Previous Legislature introduced a special excise tax on alternative fuel vehicles and hybrid vehicles. Using the argument that people who answer to these energy forms in their lives are free riding on the system so if youre not paying gasoline taxes in virginia you are free riding the highways. 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 the president in germany. She has a thing hooked up to an internet and that thing is her cell phone it turns out her cell phone was being monitored by u. S. Intelligence for many years. Under that condition isnt there 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. Look. What i have outlined here is the possibilities. We see a trend. We see the projections. Its not epidemic. It could be stalled, could be derailed. There are so many that would not like to see the democratization of the economy and a shift to a new system. Let me also say that the system is not going to disappear. I talked advanced managing but the market is playing a streamlined role. It will become an aggregator of Network Services and solutions and will be a partner but its not going to be by midcentury. It will be a partner with a collaborative comments. There are a lot of interest set foot. You mentioned the u. S. People ask me why zizo behind this shift 20 margin . The Big Energy Companies and other corporate special interests can help finance elections. They provide the money to candidates. In europe we have Public Financing of elections a lot of Big Companies are at the table in brussels they cant write the legislation because they have to vie with other groups. The National Governments ngos etc. Until we have dealt with this whole question of Companies Buying elections in the u. S. The u. S. Will continue to fall further behind. It may come up with new ideas but if you are an old Energy System and an old centralized economy based on vertically integrated companies its possible the u. S. And canada will be separate companies countries. We are wrestling with all these issues. We told the Power Companies they had to uncouple. In europe we are now having a huge discussion about Data Security and protecting peoples privacy. We all want this internet of things so we can create a more collaborative world that we want to make sure our data isnt used by third parties against our interests that we are beginning to develop very detailed protocols to make sure that privacy is secured. That is not happening here. Host there are two previous predictions i would like to ask you about one from the 1950s and one from the 1960s. 1950s this country in many countries around the world invested a tremendous amount of money and nuclear energy. The idea being and the rhetoric at the time sounds familiar to what you are outlining the idea being eye to the year 2000 electricity would be effectively free. They would sink billions of dollars into these plans and solve technological problems of along the way 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 at the marginal cost and 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 and creating tremendous dislocation of farmers in developing nations of people flooding northward from mexico because it takes a lot less labor on a farm in mexico to make a bushel of corn. How do you look at those two examples and say we are not inviting the same differ james . Guest in terms of Nuclear Power they said were the power to cheap to meter. It isnt academic sometime in the future that this will happen if we now know what europe there are millions and millions of players homeowners consumer cooperatives rural electronic cooperatives and businesses that are producing electricity at zero marginal cost. That issue is off the table. Renewables arent delivering for millions of people right now. The food issue is interesting and you might know that i thought monsanto and the Life Science Companies around intellectual property. We now have a generation of genetically modified seeds and the seeds are patented so they are controlled and owned by a handful of large Life Science Companies and we have got no record to show the yields have dramatically increased. On the contrary we have every evidence that Small Farmers now cannot have available other types of seeds and they cant afford to lease out the seeds that are zoned as intellectual property. There is an example where in agriculture we have to turn it around and move toward more organic agriculture the land reform and allow people to begin to shift their Food Production from fertilizers and pesticides to more organic treatment. Its a big jim. Jim. In europe we are doing it in parts if asia. Host one of the sections of this book makes a small concession to the idea of newer zero marginal cost and i was struck. When i think about my internet use i never believed that what i used was free. I pay comcast hundreds of dollars per month and i pay at t hundreds of dollars per month and ending number of companies for the devices in the software to interact with this flow of data so nothing about the internet is free. Some of those are second hand cause that every month i write a check to comcast. Guest theres no such thing as zero marginal cost and i spend a lot of early sections of the zero Marginal Cost Society on the cost we still have to pay for internet communication the energy cost the access cost the infrastructure costs but what im seeing is we are heading toward near zero marginal cost and we already know in certain areas we have done that. What does it cost you and i to put an i. D. On the internet and make it available to 40 of the human race . Not much. Our cell phone fixed costs and thats about it. As i they say in the book we are going to head more toward zero marginal cost. Theres no such thing as a free society however what has happened now is the reason prices are still high is these vertically integrated corporations there are so many middlemen in the process they keep racking up the transaction costs and by the time it gets to the final enduser we are paying more than we should more than the production and distribution of the product would warrant. That is why zero marginal cost is the ultimate test of the decent sustainable just society. People want a metric to measure how you created just sustainable world. That allows us to produce and share goods and services at the cost of production which should head towards zero. People have also said to me if you have abundance wont 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 of scarcity. The market capitalism is based on scarcity so we all have to get hours and make sure the other doesnt get theirs mine versus fine and weeks a struggle to hoard against a rainy day because tomorrow may bring bad news. In a society where most peoples basic energy basic goods and services are provided not all of them but the basic goods and services they would be less fear of scarcity less meat to afford if things arent in a Sustainable Way and you have some control over the processs up prosumer and also the status differentiations in a world where many things are free theres not much that is left between the haves and havenots 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 a we need and we dont need to do more than that. Host one area that is consistently in the near future related to scarcity is real estate and if you look at Silicon Valley where many of those ideas flow freely in San Francisco where many of the ideas flow freely there is a massive civil war breaking out over the high cost of a basic apartment in the area. So in that situation you have rich people getting richer on the information economy and people getting richer and educated people getting richard on the various elements that would feed into the zero Marginal Cost Society and the people who work in the delis and the Liquor Stores and that the whole tells 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 he zero marginal cost. How do we deal with back . Guest we always assume theres no way to to move an economy unless theres a profit incentive. Without a profit incentive how can you move the economy and therefore the collaborative economy does not make sense. How would people produce and share things for free . Billions of people are doing it today. Its called cooperatives. We dont tend to recognize this in the u. S. But literally billions of people are involved in food cooperatives electricity Cooperatives Bank cooperatives housing cooperatives not based on the profit motive. They pooled their capital and shared resources on a comment. There is no direct profit. For example in the United States when you go to the Grocery Store a lot of the food you get is coming from agricultural cooperatives. The electricity comes from rural corporatist. They provide 70 of the electricity. Its not a profitbased system. In new york we have the housing cooperatives. In europe and asia and around the world more people banking banking cooperatives than they do in the commercial banks and their big players. Again we are so blinded to the idea theres only the capitalist market that we dont even see this other reality cooperatives and nonprofit organizations. Let me say one last thing about it. Economists will say the social commons is a parasite that relies on government grants entitlements and private philanthropy in order to sustain itself. Wrong. The study was done in 40 countries by Johns Hopkins university Civil Society center in what they found is over half the revenue notforprofit organizations is fees for services rented. 35 comes from government and only 12 is philanthropy. We have this collaborative comments that is now going to move from the shadows to the center stage because the internet of things will allow millions of people to bypass the capitalist market and become prosumers and eliminate the middleman and directly engage with each other and create institutions that are far and away beyond the traditional capitalist profitmaking institutions. Therell be two systems capitalist market and collaborative comments. I suspect by midcentury the collaborative comments will be the dominant economic engine and the capitalist market will be a Strong Player but a niche part. Host have these housing collaboratives helped firefighters pay their rented new york wax. Guest corporatists have helped that. They can fix cooperatives determine what they are going to be doing with their members. I am not saying that the whole world is going to move toward a zero Marginal Cost Society. Im saying large parts of the human race are starting to move some of the Economic Activity onto the internet of things onto the collaborative comments and if nothing else this is the best news in my lifetime. I never thought in my lifetime we would see the emergence of a new Economic System a collaborative comments. So different from the traditional socialist and capitalist systems we now have. How we develop it and the challenges involved as we move toward it are quite interesting and there are going to be difficult for sure that the fact that we have a new possibility a new economic journey ahead of us a new Economic System to look for it too is encouraging. Getting there is going to be a test of our will but going back to the 20th century in a world that is unequal where the rich are getting richer and the poor getting poorer and Climate Change is blowing our planet is not a viable alternative. Lets try to move this to a zero Marginal Cost Society and move to collaborative comments and create a more just Sustainable Society for her kids. Host Jeremy Rifkin author of the zero Marginal Cost Society thank you very much for this conversation. Guest thank you. This tuesday Simon Schuster is releasing hillard and his latest book hard choices. Recently booktv was in new york at the Book Publishers offices to talk with some of the people involved in the production of the book. I been totally involved through all the books actually. I am not the one publishing them. Im not the official publisher of the book but ive been involved in the process all along. Way back when she was in the white house and i tried to persuade her to publish a book which became it takes a village her first book, you know i was there and ive been involved in every single one of her publications. Im not the editor because its not my core strength but i watch over the publication and i help get it all organized and make sure things are on track. I have started living history but making sure that all of our best people are working on it. We are publishing hard choices in june 10. Its her fourth book with us and i was the editor of the book so i was involved in the beginning at its acquisition and overseeing the last bits of it working closely with all the people at the company. As the editor is there a lot of emails back and forth between you and the authors . Is that how its done