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September 24, 2018

Capitalism 2.0 – The New Digital Era

Basically, the maxim that sustains the system in which we live focuses on producing more, in the shortest possible time, reducing marginal costs and increasing the profit margin.

On these four legs of the table, and following these premises to the letter we have reached a global production model, in a global work environment and with a technological level that exceeds and changes, in essence, the very nature of the system.

We continue to produce casseroles, just as they were manufactured in the first industrial revolution, but how we produce them is where technology will exhaust the industrial production concept to the limit, technology does not change capitalism, but it is the biggest weapon of which it has itself to support the four primary axes, in the medium-term technological evolution will be where the mutation of the productive and competitive paradigm will occur, consequently a transversal change.

In the next generations are already dematerializing the consumption in favor of the experience, in any conversation you hear among young people, we no longer talk about the latest SUV purchased, but of that trip in which a crocodile jumped and bit the boat during the voyage of a river through Sri Lanka.

We are not going to stop producing or consuming, but the way we are going to do it will substantially change the scenario.

The medium, the channel, the Internet make each one of us consumers and producers at the same time, and it also offers us two-way communication with democratic and critical capacity.

Videos, blogs, books as well as a multitude of services, are already being shared in a collaborative way at a cost close to 0.

We do not have to consider it a failure if not the opposite, the system has worked very well, so well that it is reducing the marginal costs of production to 0 or almost 0, in this situation it is where it is transmuted to another state by the simple fact of change the rules that have led you to 0.

The cost of a watt of solar energy cost $ 66 in 1997, today it costs 66 cents, and in 10 years it will be worth 6.6 cents, in twenty years it will be worth 0.6 cents, and it will be close to zero.

As on the Internet, in this energetic model, the consumer is also a producer at the same time, in some cases the energy that he does not consume will be able to resell it.

The current economy does not stop being based on oil as a source of energy, in essence as unlimited raw materials will replace the limited raw material, common sense will be imposed, following the basic rules of the system to produce cheaper.

Solar, wind or hydraulic energy do not go against the system, but in favor of its efficiency, they arise from the bifurcation of the same order, the parameters are the same, they are based on ability and productivity.

The exploitation interests on the old models are the ones that are different and those that today maintain and sustain great benefits, preventing the bifurcation from becoming more prominent, as in any technological process it will end up being imposed by nature, because it is cheaper and it produces more benefit, you can delay it but you can not stop it.

The moment you go to a dealership, and they offer you the Tesla S that consumes $ 6 per month of energy and any other model of fossil fuel that consumes an average of $ 100 a month, the choice seems more than obvious.

If this process of change has not accelerated faster, it is not because technology does not already exist to do it, but because the costs of manufacturing in Asian countries are still cheaper than the price of machinery and automation processes.

By the time this set is made cheaper and cheaper than remote production, we will return to local production models with global diffusion through the collaborative platform model.

Taken to the extreme with the use of 3D printing for the consumption of goods in people, will reach the point where the location of manufacturing and production will be as local as having it in the living room of your home, will allow you to individualize and customize the good In itself, producing faster, cheaper and as soon as it enters the network will be a global product.

In any of the scenarios that we plated, raw materials are never going to disappear, moreover, in these productive models will continue to be the key, what will change will be the value chain, from obtaining that raw material to exploitation in the market, either for a good or a service.

The disintermediation of large companies in favor of collaborations between individuals.

Maybe you will not buy a cup of tea, but you will have access to materials such as pottery that you can buy in bulk. Metals or plastics, we will go to the base in a simple process of self-manufacture.

Why? Simply because there is already a technology that allows you to do it, that gives you access to create cheaper and in less time, reducing marginal costs and increasing profits, but here apply the rules of capitalism to the minimum unit, the individual.

Traditionally multinational companies use the import and export base that take advantage of remote production in countries that offer more tax and competitive advantages, both traditional and new ones are based and based on three fundamental digital pillars, the use of the cloud for infrastructures, data analysis and the use of big data for business generation.

Well, today any self-employed who wants to develop an activity has precisely the same tools available to a multinational at a minimum price or even in some cases for free. Google Apps, including cloud and hosting, costs around $ 7.25 per month, over open data you have more than 2,500 free repositories, hire a Hindu in freelancer for a load of a product catalog on your website does not cost more than $ 1  the hour.

Alibaba allows you to make commissions per unit not per lot, considering you are not a company, about the manufacture of any product, you can hire wholesale wholesalers services in China at ridiculous prices, logistics has never been cheaper.

All these competitive advantages are available to everyone.

You spend more on the flat rates that you consume on Spotify and Netflix than on the fixed costs that you would have to create your multinational, digital and global.

The mutation will accelerate when the economics of scope replaces the concept of economy of scale.

The first (the current one) achieves productivity by making pans in less time, with lower cost and in more significant number, in the second economy the unit cost is reduced as the varieties produced increase, whose demand has become higher from the reach of production limits with fixed costs given.

In a digital world the exciting thing happens when you work with fixed costs very low or close to 0, in this scenario we do not need to increase the scale to increase productivity, but in any case the scope, which feeds the subtle differences between the different variants of your output

For the first time in history, the three axes on which the development models are based: communication, energy, and transport are going to be intertwined with each other thanks to the Internet, a new medium with different rules, this is where the significant change comes from.

Capitalism as we know it, will not disappear, due to the production of essential raw materials that will continue in the market as well as the construction of large infrastructures, they will always be there, but there will be a bifurcation of the system in which different models will coexist, one upward and one downward and where the key will go through the change of the energy model.

In the same way that a river is divided into tributaries, the digital bifurcation will increase in flow with the risk of drying the stream.

Everything that can be digitized will be digitized, but there will be common goods that are non-digitizable.

Call it Postcapitalism, Capitalism 2.0, Technocracy, as you wish, without a doubt you have to know how to read the signs, the lines that draw us a different future scenario, in which taken to the extreme, the same rules of capitalism will end in a mutation towards new economic models, social and political, where the human and the status quo of the individual will pass from the mass to the strategic center of the ecosystem.

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