OECD Inadvertently Predicts Peak Capitalism But Doesn’t Know It

According to the Organisation for Economic Co-operation and Development’s recently released long-term predictions for the global economy through 2060 (Paul Mason, “The best of capitalism is over for rich countries — and for the poor ones it will be over by 2060,” The Guardian, July 7), economic growth will stagnate to something like two-thirds its present level and economic inequality will increase. But growth will continue at a higher level in the developing countries until mid-century, because there are still significant gains to be achieved through the diffusion of the West’s existing technological advantages to the rest of the world. Still, the price for even this level of economic growth — obviously, from the perspective of the neoliberal wonks at OECD — will be growing inequality.

We all know, or should know, the problem with indefinite extrapolations from present trends. They ignore negative feedback effects making those trends unsustainable. Remember those “America’s Energy Future” PSAs by the fossil fuels industries, where Brooke Alexander said growing demand would lead to 60 million new cars on the road in America by mid-century? Ain’t gonna happen. Industry numbers crunchers came up with that statistic by extrapolating from current trends, without considering that total output of petroleum has peaked and will steeply decline in the future (along with steeply rising in price). Those trends in auto use can’t continue. Instead, people will modify their behavior.

Another problem with OECD’s analysis is that it equates an increase in quality of life with “economic growth,” when in fact what the economic output statistics measure is the consumption of inputs and monetized activity. But the new technologies that show the most promise of increasing our quality of life — garage-scale micro-manufacturing with open-source CNC machinery, free and open-source informational goods, Permaculture, high-tech vernacular housing technology — will also result in the implosion of the monetized GDP, since they require less in the way of capital and labor inputs. The natural tendency of such technology is toward a world in which the capital required to meet our consumption needs can be raised by small cooperative groups of producers, those needs can be met with fifteen or twenty hours of labor a week, and the official GDP figures collapse because everything is so cheap.

The only way to prevent this collapse of official economic output metrics and maintain present levels of economic inequality is for the economic ruling class, the propertied elites, to act through their state to enclose technological progress as a source of rents. But the legal framework these enclosures depend on is untenable. We’ve already seen what Wikipedia has done to dead-tree encyclopedias and file-sharing to music and movie industry profits. The shift to micro-manufacturing of most goods in neighborhood shops, using pirated digital design files to produce knockoffs of patented goods or just producing better designs without built-in obsolescence, will do the same to the industrial corporations.

We’re headed for a world where the transaction costs of networking together are near zero, where ordinary people can associate to produce most consumption goods with capital outlays equivalent to a few months’ factory wages, and there’s nothing all the regulations, patents and copyrights on paper can do to stop us.

As the subtitle of the Guardian article cited above says, “Populations with access to technology and a sense of their human rights will not accept inequality.” The people of the world will simply not allow economic elites, with the help of the state, to maintain toll-gates between us and the technologies of abundance, skimming off most of the benefits in return for letting some of them trickle down.

Citations to this article:

Free Markets & Capitalism?
Markets Not Capitalism
Organization Theory
Conscience of an Anarchist