“In a capitalist market, governed by the invisible hand of supply and demand, sellers are constantly searching for new technologies to increase productivity, allowing them to reduce the costs of producing their goods and services so they can sell them cheaper than their competitors, win over consumers and secure sufficient profit for their investors. [Karl] Marx never asked what might happen if intense global competition some time 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 thats now beginning to happen.” “They began by acknowledging that the most basic condition for economic efficiency: [is] that price equal marginal cost, and further conceded that with information goods the social marginal cost of distribution is close to zero. They then went to the crux of the problem. If information goods are to be distributed at their marginal cost of production – zero – they cannot be created and produced by entrepreneurial firms that use revenues obtained from sales to consumers to cover their [fixed set-up] costs … [companies] must be able to anticipate selling their products at a profit to someone. “ “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. “
Posted on: Wed, 09 Apr 2014 04:45:18 +0000
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