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Can Tech Wealth Save Capitalism?

By David Price

Charlie Leadbeater recently highlighted the loss of faith in capitalism. Paul Mason has gone even further, predicting the dying days of a system that seems like it’s always been with us. The neoliberal are not exactly running for cover, but decidedly on the back foot.

It’s hard to imagine any system other than a form of capitalism, but we have to turn our minds to it, and sooner rather than later, if we suffer a repeat of 2008. Even without a cataclysmic financial meltdown there are a growing number of chickens that could come home to roost, which collectively would force the economic system to implode:

The catastrophic effect of runaway climate change, triggering economic migration in the millions, rather than the tens of thousands we currently see heading to Europe from North Africa; the so-called Age of Abundance, where energy costs approach zero, people 3D print what they need at home, the P2P sharing economy, and biotech driven cheap food - all collectively driving profits down still further (see the stark graphic below);

(The downward trend in the rate of profit since 19th century, via Esteban Maito)

 

But perhaps the biggest impact of all - and the one that suggests a violent transition to postcapitalism is a real possibility- will be the disappearance of ‘the job’. Artificial Intelligence, automation and robotics will mean that even the degree-educated - perhaps especially graduates - will be scrabbling around for so-called ‘bullshit jobs’, or facing no jobs. That doesn’t mean that productivity will be down - far from it. We just won’t need people so much. There’s a crypto-currency company, DAO, that just made $130m - it has no CEO and no employees. So, there will be even greater disparity of wealth, between the super-rich and the educated poor.

And that’s why the concept of a Universal Basic Income (UBI) - whether you have a job or not - is much discussed these days. If we’re to achieve the kind of smooth transition to postcapitalism that Mason advocates, then some form of radical wealth redistribution will be essential. But, how big a tax on hugely profitable corporations would be needed for mass UBI schemes to become viable? And, as we’ve seen recently, imposing even moderate taxes on infotech capitalists provokes the evacuation threat.

Switzerland’s referendum recently rejected the idea of a basic ‘unconditional income’, largely on two grounds: first, with, a generous monthly allowance, and with Switzerland’s open borders it would prompt a flood of economic migrants; second, who’s going to pay for it?

Though UBI is undoubtedly coming (who would honestly prefer the alternative of massive social breakdown and youth riots?) the question of who’s going to pay for it is a very timely and valid question.

But what if ‘GAFAnomics’ (the dominance of Giggle, Apple, Facebook and Amazon) were to take their social purpose missions seriously, and coerce other super-wealth generators to re-distribute their vast revenues in order to avoid social disintegration (not to mention violent overthrow)? The cynic in all of us probably laughs at the notion of conglomerates voluntarily giving their profits away, and their past tax avoidance record would support such cynicism. But Gates, Zuckerberg and others have publicly vowed to give their personal wealth away, so is it such a stretch to speculate how they could use their power and financial influence to ensure that nobody goes hungry, or lives in poverty, because of the failure of conventional capitalism to protect them? And would it be enough to enable a new form of social capitalism to emerge?