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April 8, 2020 by

Many people are criticizing the current model of capitalism, amongst others because of inequality and climate change. Some are searching for an alternative. In this not fully convincing book the English writer and film-maker Paul Mason comes up with Postcapitalism as our possible future.

“Capitalism is a complex, adaptive system which has reached the limits of its capacity to adapt”, he writes. The best of capitalism is behind us, he adds. “When you realize that capitalism, once, did not exist, a more shocking thought arises: it might not last for ever.” Much of Mason’s criticism in the book makes sense: the current system of neoliberal shareholder capitalism has many flaws.

The transformation to a new model for society is necessary according to Mason, because information has become the most important factor of production by far, much more important than land, labour and capital. “The knowledge content of products is becoming more valuable than the physical elements used to produce them.” He gives the example of Nike shoes, which are “information plus things”; they are more about a story than about leather and plastic.

“The rise of information technology disrupted the basic institutions of capitalism: price, ownership and wages”, resulting in three impacts:

  1. Information technology has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages.
  2. Information goods are corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. Information goods therefore conflict fundamentally with market mechanisms. “The system’s defence mechanism is to form monopolies on a scale not seen in the past 200 years – yet these cannot last.” This advance from scarcity towards abundance is a significant development in the history of humanity. “If a free-market economy with intellectual property leads to the under-utilization of information, then an economy based on the full utilization of information cannot have a free market or absolute intellectual property rights.”
  3. We are seeing the rise of decentralized, non-hierarchical and collaborative production, with examples like Wikipedia and Open Source software. “This defines the route beyond the market system.”

“The main contradiction today is between the possibility of free, abundant goods and information and a system of monopolies, banks and governments trying to keep things private, scarse and commercial. Everything comes down to the struggle between the network and the hierarchy, between old forms of society moulded around capitalism and new forms of society that prefigure what comes next.” The information economy corrodes the traditional property relations of capitalism, Mason writes, by pushing the cost of reproducing information goods towards zero. It “adds a high information content to physical goods, sucking them into the same zero-price vortex as pure information goods, often making their value dependent more on socially created ideas (the brand) rather than the physical cost of production.”

I agree with Mason that the knowledge economy is fundamentally different from the industrial economy and that we are moving into a new paradigm. In this book Mason builds his theory around the work of Karl Marx, especially his labour-theory, and the long waves of Kondratieff. Though robust, the long analyses of Marx and Kondratieff are in my view not the most convincing parts of the book.

It is interesting to see the emergence of organizations that differ from traditional hierarchies, such as cooperatives, peer-to-peer networks and decentralized management. But I am not sure if they are the harbingers of a new era, as Mason thinks, or just interesting experiments. I am definitely not convinced that they signal a society in which people have lots of free time but keep producing goods and services that are cheap or free. To conclude: this book contains justified criticisms of capitalism but fails to develop a credible alternative.

Paul Mason. Postcapitalism. A Guide to Our Future. Penguin, 2015