Friday, July 27, 2012

Rifkin on the emerging socio-economics

Along the theme in recent posts about a progressive ethics and value system, Rifkin is on the forefront of enacting this through his socio-economic model. The P2P blog pointed me to this article by Jeremy Rifkin, excerpts from his book The Third Industrial Revolution. Granted in the US neither major political party embraces this agenda fully. But which one seems to at least be moving in that direction? And which is more embedded in the 1st and 2nd industrial revolutions? Which Presidential candidate talks more like this? Which European nations are actually more in line with the 3rd revolution? Also some questions for Rifkin on austerity (see comments). Some excerpts:

"The new era will bring with it a reorganization of power relationships across every level of society. While the fossil fuel-based First and Second Industrial Revolutions scaled vertically and favored centralized, top-down organizational structures operating in markets, the Third Industrial Revolution is organized nodally, scales laterally, and favors distributed and collaborative business practices that work most effectively in networks. The 'democratization of energy' has profound implications for how we orchestrate the entirety of human life in the coming century. We are entering the era of 'Distributed Capitalism.'

"The emerging Third Industrial Revolution is not only changing the way we do business, but also the way we think about politics. The struggle between the older hierarchical power interests of the Second Industrial Revolution and the nascent lateral power interests of the Third Industrial Revolution is giving rise to a new political dichotomy, reflective of the competing forces vying for dominance in the commercial arena.... [It] is less about right versus left and more about centralized and authoritarian versus distributed and collaborative.



"The once-unquestioned value of unlimited economic growth has given way to the idea of sustainable economic development. The conventional, top-down, centralized approach to organizing economic activity that characterized the fossil fuel-based First and Second Industrial Revolutions, is being challenged by the new distributed and collaborative organizing models that go with a Third Industrial Revolution. The hallowed nature of property exchange in markets has been partially upended by shared access to commercial services in open-source social networks. National markets and nation-state governance, once the spatial milieu for all economic activity, are giving way to continental markets and continental governments. The result is that much of economics, as it is taught today, is increasingly irrelevant in explaining the past, understanding the present, and forecasting the future.

"Whether it’s rethinking GDP and how to measure the economic well-being of society, revising our ideas about productivity, understanding the notion of debt and how best to balance our production and consumption budgets with nature’s own, reexamining our notions about property relations, reevaluating the importance of finance capital versus social capital, reassessing the economic value of markets versus networks, or reconsidering how the Earth’s biosphere functions, standard economic theory comes up woefully short.


"The American dream, long held as the gold standard for aspiring people everywhere, is squarely in the Enlightenment tradition, with its emphasis on the pursuit of material self-interest, autonomy and independence. Quality of life, however, speaks to a new vision of the future -- one based on collaborative interest, connectivity and interdependence. We come to realize that true freedom is not found in being unbeholden to others and an island to oneself but, rather, in deep participation with others. If freedom is the optimization of one's life, it is measured in the richness and diversity of one's experiences and the strength of one's social bonds. A life less lived is an impoverished existence.

 "In recent years, economists have begun to create alternative indexes for measuring economic prosperity based on quality of life indicators, rather than mere gross economic output. These new indices measure the general improvement in the well-being of society and include such things as: infant mortality and longevity of life, the availability of health coverage, the level of educational attainment, average weekly earnings, the eradication of poverty and income equality, affordability of housing, the cleanliness of the environment, biodiversity, the decrease in crime, the amount of leisure time, etc. The governments of France, the UK, and the European Union, as well as the Organization for Economic Cooperation and Development (OECD) and the United Nations are each creating formal quality of life indexes with the expectation of relying increasingly on these new measurements to judge the overall performance of the economy."

7 comments:

  1. Although in this article* Rifkin is off-base, in that he agrees with Germany's Merkel that "stringent austerity programs will have to be enacted in the member countries to reduce government debt." He argues that alone is not enough, that they'll also need to implement his 3rd revolution tech. But we've seen how the austerity program is causing greater harm, that it is not at all necessary, and that due to austerity there will not be sufficient funds to support his programs. I wonder if he has more recent thoughts on Germany's austerity and how it is actually thwarting his 3rd revolution?

    * http://www.huffingtonpost.com/jeremy-rifkin/germany-euro-economy-_b_1028736.html

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  2. In this more recent interview* he notes Germany is moving forward with his agenda. But while their economy is strong enough to pay for these innovations their foreign austerity policy on other nations is thwarting any change they will be able to afford it.

    * http://www.makingitmagazine.net/?p=4904

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  3. In Rifkin's 5/29/12 speech at the European Commission* he noted that while austerity must be part of the solution it must not "compromise the guiding values of the European Dream which include...the advancement of quality of life for every citizen." Yet this is the very thing attacked in the US austerity policies, taking from the poor and middle class to give to the rich. I'm not familiar with European austerity measures but if they are anything like US policies then it most certainly violates these values.

    * http://ec.europa.eu/enterprise/policies/innovation/files/mg-speech-rifkin_en.pdf

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  4. For example, this article* notes that the UK poor were the hardest hit by their austerity measures.

    * http://www.independent.co.uk/news/uk/home-news/poorest-hardest-hit-by-austerity-7888459.html

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  5. This one* on Spain notes that the poor are hit the hardest while the rich sacrifice little.

    * http://www.independent.co.uk/news/world/europe/spain-on-a-knife-edge-as-austerity-cuts-hit-poor-7792698.html

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  6. This report* on the EU as a whole notes the following:

    "Poverty has increased by 2 million since 2010, and the analysis of the NRPs demonstrates how macroeconomic focus on austerity, driven by economic governance, is directly undermining benefits and public services."

    * http://www.eapn.eu/en/news-and-publications/press-room/eapn-press-releases/europe-2020s-poverty-target-will-not-be-met-with-current-approach

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  7. At the IPS forum Pascal said: "Trees cutting at their own roots to save water in a drought."

    My response: Good metaphor, but it still contains the fallacy that there is a lack of wealth (drought). Many have made the case (with stats) that there's plenty of wealth to go around (a real oasis) but it resides with the top 1%, which are making record profits. That it's not distributed is the cause of the drought for everyone else.

    And let us not forget that the very real, dire economic situation for the rest of us was directly caused by the 1% committing crimes, ripping off our economy and then crashing it while they get bail-outs, bonuses for failure and are now way better off than ever before. There's plenty to go around but our budget priorities choose to serve austerity for the lower 98% while the top get way more than they could ever use, except to buy elections that enact laws to make them even richer while everyone else gets poorer.

    Coming back to Rifkin, his ideas are the next step in my opinion. But I think perhaps he's a bit naive to think that Merkel and Germany have the best interests of everyone in mind when they implement his ideas, instead more likely thinking of their own best national interests. That Germany is demanding austerity for the struggling EU nations, who are struggling because of the financial crimes per above, and that austerity is only serving to further impoverish them instead of help them, seems more indicative of my hypothesis.

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