Capitalism 2.0 In A Digital World
For well over a million years, humans lived as hunter-gatherer societies. Constantly on the move, noshing on berries, roots, leaves and nuts, eventually adding meat and having lots of tasty BBQ meals. We often refer to them as “primitive” while lauding the great benefits of our industrial and post-modern society of today. Yet it’s a bit ironic that we have much more food insecurity, poverty and hunger than they ever did. We also know now, as anthropology starts to slip off the cloak of its colonialist thinking, that these societies were far more complex, with economic systems, than we once assumed.
As we move into the digital age, it is likely economic systems, especially the current form of capitalism, are about to undergo yet another fundamental change. One that could see us adopting some elements of hunter-gatherer societies, much as the ancient Andean societies had the Kuipo, an early iteration of blockchain.
Capitalism, has, overall, although it’s not perfect, served to advance human societies far more than any other system before, when we consider scale. It replaced the brutality of the feudal system. Even communist China adopted many aspects of capitalism (although it is stepping away lately.) Coupled with democracy, these have been powerful forces. But both will need to evolve in the coming decades. Much will be driven by the invisible hand and the inevitability of a hyper-technological society.
This is already happening. We have entered a time of significant turmoil, which will eventually result in some rather significant changes in our macro sociocultural systems. The current form of capitalism, is I believe, unlikely to survive. Just as democracy will undergo significant changes, likely for the better.
Technologies like Artificial Intelligence (AI) will replace mundane, highly process driven jobs. It will also create new jobs, more than it takes away. This has always been the case with technology. Robots will play a significant role across many sectors. They will not so much replace jobs as fill ones that can’t be filled as we face a declining population and a massive shift with an ageing population.
History has proven that as human societies evolve, invent and deploy technologies, the division of labour increases. This fundamentally changes social structures and cultures. We have become, in WEIRD (western, Educated, Industrial, Rich, Democratic) countries, far more individualistic. This is happening in other societies as they gain wealth and use digital technologies. Sociologists Durkheim and Weber predicted this over 100 years ago.
We are also living longer. As we increase the use of genetic engineering and pharmaceuticals to increase our lifespan, the idea of someone being old and of no social or economic value at 70 will slip away. This will fundamentally impact intergenerational relationships and economics. We spend a lot of time, money and effort to get educated and skilled, and in real economic terms, today our peak productive input to society is about 15 years. This is stupid. We will soon have peak productivity of perhaps 30 years. This requires a fundamental cultural shift in thinking about age. It impacts economics and family relationships.
As management guru Peter Drucker said capitalism, business, should deliver on the social good. When capitalism is done right, it does. But capitalism has gone down a dark path. Businesses no longer serve the customer, they serve the shareholder with dividends. We are, irrefutably, again at the point where the wealth gap between the poor and the rich is reaching a tipping point. Billionaires like Elon Musk and Jeff Bezos play fast and loose with peoples economic opportunities, constantly forcing wages down while crushing unions and human rights. That’s not capitalism, that predatory exploitation. Feudalism.
As cryptocurrencies eventually mature and move on from their current exploitative phase and blockchain too matures, they will likely provide the framework for rightsizing capitalism and offering more economic mobility for those for whom it has been taken away. Global financial systems will evolve accordingly.
It will not be perfect. It will not be utopian like some would like. Utopianism is a silly notion, the same as the techtopian world some of the Silicon Valley ilk see.
Over the coming few decades, we will see greater civil unrest. We may see internal conflicts like civil wars. We may see some nation states collapse, both autocratic and democratic. Although it may at times seem counterintuitive, humans are more kind than cruel to each other. This is a reason for hope.
The digital technologies we are adopting will help us fight (and win) the climate change challenge, evolve new economic models, increase our lifespan, cure diseases like cancer, increase wealth in more egalitarian ways, push back autocracy (although it may increase in the short term) and elevate more humans, reduce racism and fundamentally change the capitalism-based sociocultural systems we have known for the past 500 years. Colonialist Western European thinking is in its dying days. It’s run its course. It’s going to a wee bit of a bumpy ride for a while, but what comes next, after darkness, will be a new enlightenment and a very exciting time to be alive.
We will see Capitalism 2.0, perhaps one that actually delivers on Druckers concept of business for social good. Right now, social responsibility for most companies is an annoying checkbox, like greenwashing. That is not sustainable and is reprehensible and the hallmark of capitalism gone wrong. But it will not survive. It is the death throes of a system that cannot adapt to the technological changes it in itself wrought.
