Marx never asked what might happen if intense global competition in the future forced entrepreneurs to introduce ever more efficient technologies, accelerating productivity to the point where the marginal cost of production approached zero, making goods and services "priceless" and potentially free, putting an end to profit and rendering the market exchange economy obsolete. But that's now beginning to happen.
Over the past decade millions of consumers have become prosumers, producing and sharing music, videos, news, and knowledge at near-zero marginal cost and nearly for free, shrinking revenues in the music, newspaper and book-publishing industries. Lawrence Summers, former US treasury secretary, and J Bradford DeLong, professor of economics at the University of California, Berkeley, have focused on the new communication technologies that are already reducing the marginal (per-unit) cost of producing and sending information goods to near zero.
While the notion of near-zero marginal cost raised a small flurry of attention 12 years ago, as its effects began to be felt in the music and entertainment industry and newspaper and publishing fields, the consensus was that it would likely be restricted to information goods, with limited effects on the rest of the economy. This is no longer the case.
Now the zero-marginal cost revolution is beginning to affect other commercial sectors. Summers and DeLong glimpsed that as marginal costs approach zero, "the competitive paradigm cannot be fully appropriate" for organising commercial life, but admitted "we do not yet know what the right replacement paradigm will be". Now we know. A new economic paradigm – the collaborative commons – has leaped onto the world stage as a powerful challenger to the capitalist market.
An increasingly streamlined and savvy capitalist system will continue to operate at the edges of the new economy, finding sufficient vulnerabilities to exploit, primarily as an aggregator of network services and solutions, allowing it to flourish as a powerful niche player. But it will no longer reign. Hundreds of millions of people are already transferring bits and pieces of their lives from capitalist markets to the emerging global collaborative commons, operating on a ubiquitous internet-of-things platform. The great economic paradigm shift has begun.