Zero Marginal Cost Economy - And The Prout Society

 "Economics is defined as a science of scarcity; it is predicted that abundance will define it in the 21st century."

The best-selling author, Jeremy Rifkin, published his twentieth book titled The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons and the Eclipse of Capitalism, 2014. It draws attention to a much more profound contradiction ignored by Karl Marx while eloquent about many other ancillary contradictions of Capitalism.

Dying Capitalism:

Rifkin exposes contradiction at the heart of capitalism that has propelled it to greatness - but is now taking it to its death. The inherent entrepreneurial dynamism of competitive markets drive productivity up and marginal costs down. It enables businesses to reduce the price of goods and services to win over consumers and market share. When goods or services attain critical mass, one can make additional units at zero or near-zero marginal cost. 

Zero marginal cost describes a situation where one can produce additional goods and services without increasing production costs. While economists have always welcomed a reduction in marginal cost, they never anticipated the possibility of a technological revolution that might bring marginal costs to near zero, making goods and services priceless, nearly free, and abundant, and no longer subject to market forces.

 From Scarcity to Abundance: 

We are worried that capital accumulation is driving ever-greater wealth inequality, that we have already lost the climate change battle. We have good news. Rifkin argues that we are about to enter an era when the Internet of Things, free energy, and what he calls 'the collaborative Commons' will make anything and everything available for practically nothing. Together, he contends, those developments will overthrow capitalism as the world’s dominant economic model. Economics is defined as a science of scarcity; it is predicted that abundance will define it in the 21st century.

The near-zero-marginal cost phenomenon has already disrupted the information goods industries over the past decade. Millions of Consumers turned Prosumers are using the Internet to produce and share their music via file-sharing services, videos on YouTube, knowledge on Wikipedia, news on social media, and even e-books, all for nearly free, which has become commonplace. Massively Open Online Courses (MOOCs) operate at near-zero marginal cost, and some of the most distinguished professors in the world conduct them. Six million students have currently enrolled for MOOCs for free. The near-zero marginal cost phenomenon brought the music industry to its knees, shook the film and television industries, forced newspapers and magazines out of business, crippled the book publishing market and forced universities to rethink their business model. We enjoy our kiirtan, 24/7 on Radio Prabhat (Zeno App), courtesy of the zero marginal cost economy.

Internet of Things & AI:

There was an argument that the productivity advances made possible by the digital economy would not pass across the firewall from the virtual world to the brick-and-mortar economy of energy, transportation, and physical goods and services. There is no longer a firewall between the digital and the world of physical enterprise. A new Internet of Things (IoT) is evolving. Artificial intelligence drives automation and robotics, enable exponential productivity growth - pushing down production costs and expenses of hiring workforce. It allows conventional businesses and millions of 'prosumers' to make, store and distribute renewable energy on a digital energy Internet; Share vehicles on an automated, GPS-guided and soon driverless, Transportation and Logistics Internet; Manufacture an increasing array of 3-D-printed physical products and other goods and services. All this at a meagre marginal cost in the market exchange economy, or near zero marginal cost in the sharing economy—just as they now do with information goods. 

The best biology class video, that is, (digitised); distributed online, that is, (demonetised); and consumed by an infinite number of students (democratised) - illustrates the typical three-step process of the new economy. Post-covid, the expensive Conferences are digitised (zoom), demonetised, person to person contact costs, reduced to zero; and democratised, accessible to anyone with a smartphone. Similarly, all activities having a cognitive pattern, including critical (robotic) surgeries, would be rendered to zero marginal cost, dispensation. 

Guaranteed Minimum Requirements:

The new Progressive Utilisation Theory (PROUT), Shri P R Sarkar, explains as follows. "Prout's economic system guarantees the minimum requirements of life - that is, food, clothing, accommodation, medical treatment and education to each and every person.... (Prout) advocates the maximum utilisation and rational distribution of resources. This will provide incentives to increase production."

"On the one hand the standard of the minimum requirements must be increased, and on the other hand the provision of amenities will be assessed from the viewpoint of the collective welfare. As the need for the minimum requirements is fulfilled and the supply of the maximum amenities increases, the struggle for daily subsistence will gradually decrease and people's lives will become increasingly easy and enjoyable. For this reason, PROUT guarantees the minimum requirements and the maximum amenities to all."

Prout Activists awareness of exponential changes in Science and Technology in various fields related to the People's economy of guaranteed minimum requirements is essential. It will equip the leadership to articulate and execute the transformation of the economy from inequality-bred scarcity to prosperity of equal-opportunity. The following is an attempt to hint at some of the technology trends in the People's economy sectors of Prout that promises plenty.         

Universal Education:

Prout Society guarantees access to Universal Education and also Healthcare, ensuring a level playing field. It proclaims 'Sa Vidya ya Vimuktaye'. Education cannot be subjected to a market economy and should be treated as a Fundamental Right of all citizens to enable the fullest human expression of each individual's physical, psychic spiritual potential - without any discrimination.

Several European Union countries, including Germany, provide free Education, including Higher education, to all citizens. 

India spends a low GDP share of 3.37 per cent, which has declined from 4.5 for the year 2000, while It is 4-6 per cent of GDP in most countries, big and small, rich and underdeveloped. The average share of GDP for Education of OECD countries is 4.5. By not funding Education, the Pakistan government drove the students into the lap of fundamentalist madrasas with severe consequences for themselves and the region.

Vested interests in India are commoditising and lowering the standards of Education. Their neglect of teaching Humanities Courses is affecting the cultivation of exemplary citizenship against dogmas.

The digitisation of the knowledge resources and universal, affordable Internet connectivity enables access to a world-class education for all. The best digital classroom experience can be delivered on handheld devices at zero marginal cost without distinction to rich and poor alike.

Prout activists would unlock the potential of a zero marginal cost economy to materialise the powerful dream of universal quality education to all in both the mother tongue and world languages. 'Sa Vidya ya Vimuktaye'.

Food Sovereignty:

Exponential innovations in science and technology will render the required local food production for the Samaj economic and feasible, irrespective of adverse or favourable geophysical factors.

There are three essential factors for climate-neutral farming and food production; (A) Driven down inputs cost to zero marginal cost, (B) AI, Automation in crop monitoring reducing labour costs. (C) health and ecology conscious community's demand for locally produced food.   

A). We can draw the required energy from Renewable resources such as solar, wind, tidal, hydro-thermal and others. Thus the energy costs for a) desalination/nutrition through irrigation water,  b) controlled climate condition of the multi-tiered greenhouses - would be available in situ, at zero marginal cost.

B. Vertical farming, Hydroponics, Artificial intelligence, nano-robots, and automation will render crop production in multi-tiered climate-neutral greenhouses feasible, reduce workforce necessity, and remove drudgery.

C. There is a movement gathering momentum for local food production for local consumption, for all the right reasons; carbon footprint, health, circular or symbiotic economy.

The Prout agrarian revolution of Cooperatives can free humanity from malnutrition, hunger and restore the threatened environment. All we need is the political will to establish governance of Samajas by the Prout informed leadership.

The solutions for the production of sufficient food are available. Each Samaj shall design the (Proutist) cooperative economy to produce and distribute food to meet the demand, securing Samaj food sovereignty.

Transport and Communications: 

The multiple revolutions - navigation (google maps), ride-hailing, ride-sharing (uber) and self-driving vehicles (waymo) - together riding on the platform of the Internet, combined with the exponential increase in battery storage capacity, will render transport to near-zero cost.

The communications revolution in the last two decades has made geography history. Now powered by handheld smartphones, it is heading to connect rapidly entire humanity. The costs have also been rapidly falling with powerful 5G and several projects underway to offer Internet connectivity and Wi-fi by placing thousands of low-orbit satellites covering the entire planet.

Healthcare for All:

Unlike the current, reactive distress-stage healthcare, the future will be predictive, based on the whole-genome-info of all members of a Samaj, made accessible online for healthcare purposes. Along with it, chips embedded in the individual, connected to an online health surveillance system and Digital Assistants (artificial intelligence) would deliver universal Healthcare at zero marginal cost. 

The individual whole-genome sequencing cost from 7 crores in 2001 has crashed to Rs.15000/- in 2020 (Veritas Genetics). The downward curve with volumes will render it at zero marginal cost in a few years. Prout society will ensure whole-genome sequencing of All and its access to Experts  to monitor health indicators to deliver predictive Healthcare.

Universal Access to Basic Necessities:

The data-rich Eco-system has transformed how we learn, socialise, work, and entertain through affordable smartphones at near marginal cost. Similar, three-step - Digitised, Demonetised, and Democratised processes will go beyond the virtual spaces. It will drive physical devices in every sector, from Cars to Robotic surgical operations, bringing the zero marginal economics closer to the goal of guaranteed minimum necessities of life and welfare of all.

The major cost factor of energy required for production and distribution is resolved by distributed or in situ power generation, at near-zero cost, from renewables, such as solar, wind, thermal, tides, etc.

Prout Promises Plenty:

Prout activists must challenge the under-use, abuse and disuse of available resources under greed-driven Capitalism. Another world is possible with zero marginal cost economy to achieve self-reliance in the local production and distribution of guaranteed minimum necessities of life to all the members of the society. 

The economy's redesign with the Cooperatives will secure maximum utilisation and equitable and rational distribution of the essential minimum requirements of the era, further progressively upgrading the universal basic basket of essential goods and services in step with the changing times.

Prout ideology warrants adopting a new value system based on Spirituality and a Revolutionary shift in behaviour. The Prout vision of alternative Futures shall inspire a paradigm shift in social thinking and action. The Proutists shall offer the necessary leadership in materialising the Sadvipra Samaj, ushering welfare of all living beings.


 G Surender Reddy

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