What kind of economics will develop from capitalism in the Information Age?

Asked by: GadZukes
  • It is likely that the information age will increase consumer choice- and lower profits.

    Consider the difference between for profit and non profit companies. Historically, for profit companies get more investment, which allows them to make better products which attracts consumers. Non profits, which offer lower prices, fail to attract consumers because they are always a step behind the for profits. This results in lower revenues for non profits, leading to lower returns for investors in non profits. The cycle goes on, as investors continue to invest more in for profit companies which offer high returns.

    However, the information age might just break this cycle. As consumers have access to more price information, they will make better decisions on which products to buy. They will resist the allure of shiny new technology offered at exorbitant prices as they gain access to slightly cheaper technology over services like Amazon. If this happens, profits will fall, and non profits will begin to dominate the market.

    Of course, the transition will result in a massive economic crisis as the entire financial sector is brought to its knees. Suddenly, it is not so easy to make money by just investing. Without a doubt, the GDP will drastically fall. On the other hand, what emerges will be a fresh start for consumers.

    Incidentally, this model is very similar to what is found in nature. Entropy reduces systems to more disordered states. Yet complexity still emerges in the universe because components of systems that resist entropy- like stars- better resist entropy in the future via interactions such as gravity. However, these objects cannot stay ahead forever- ultimately they succumb to the second law. It is in a similar way that for profit companies will ultimately fail.

    Ultimately, the transition hinges on consumers sacrificing the high priced new technologies for excellent prices for slightly worse technology. In the end the result is nearly identical to if we implemented market socialism.

  • Something has to change because capitalism isn't stable enough to withstand the vagaries of the global economy.

    People are still feeling the negative effects of the Great Recession that resulted from the Meltdown of 2008. Enough thinkers and writers have analyzed what went wrong to understand that the problems have to do with how capitalism works, and there's very little will to actively change the system through tighter regulations. Also, there's plenty of reasons to doubt that tighter regulations would actually work. As a result, forward-thinking people have proposed what might evolve out of capitalism in light of how the Information Age is turning out.

    The Wikipedia article linked to below gives a good starting point for understanding what the discussions currently are, along with handy labels to help focus your opinions.


    I personally haven't formed a strong set of opinions yet, but I do see that changes are taking place. This puts me into the YES side of the discussion. If you don't think changes are taking place, that capitalism is the epitome of economics, then your side would be NO.

    Wherever you fall, whatever your opinions, I am very interested in reading what you're thinking.

  • Gradual progression away from capitalism

    With more and more things becoming free (movies, music, information, etc) despite old guard trying to prevent free dispersal, the world will soon see the beginnings of the post-scarcity economy. Just like capitalism and social-market, it will occur in the first world nations first and then slowly spread. 3D printers allow one to print guns and other items. Soon, these machines will be much faster and be able to print full-fledged food in addition to other things. Robots/machines would become specialized to do manual labour and other labour people don't want to do. Robot watchers (quality control) could work from home on call telecommuting and telefixing the machines. Since hardly anyone would need jobs, a voucher system provided by the community would have to replace traditional money, else the unemployment would rise to 93%. The vouchers need only match the aggregate production to the aggregate consumption and divide by the community's population.

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