[APPLAUSE]
PAUL MASON: Well,
let me first of all
say thank you for inviting me.
And I do feel honored
to be particularly
in this part of
Google's operations.
I use your products
probably once a minute.
When me and Peter
were working together,
our success metrics were
things like something
called BARB, which is a
sort of theoretical thing
that tells you how many
people have watched you on TV.
My success metrics, I
know how many people
watch my YouTube videos.
And that's only in
the space of 10 years.
So, yeah.
Thank you.
And I'll just consult my
iPhone for the next bit
of what I'm about to say.
So in my book,
there's a big critique
of what we call
neoliberalism, free market
economics, the current
model of capitalism.
I'm going to cut to the
chase and skip that over,
because I think what I
wanted to say to you is have
a conversation with
you about the more core
idea of the book, which is
the other bit of it, which
is the idea that
we may be entering
a transition beyond what
we know as capitalism.
And that this transition is
primarily driven by technology.
And I want to kind of sort of
explain what I mean by that
and get your feedback
on it, and maybe
have a discussion with Peter
and with yourselves about it.
So there's been lots of people
before me posing the question,
can capitalism survive?
Will it one day run out?
Will it-- are
there limits to it?
Adam Smith, John Stuart Mill,
Karl Marx, David Ricardo,
the great economists
of the 19th century
all were obsessed
with the problem
that capitalism--
Malthus as well,
the population specialist,
obsessed with the idea
that capitalism might
one day reach its limits.
But the reason we
haven't for 150 years
tended to worry about that is
because whenever it has reached
limits, whenever specific
societal business models have
reached a limit or an impasse,
what has generally happened
is that capitalism has adapted.
And therefore, when I first--
when I went to university,
the theory of complex
systems didn't exist, OK?
In the late 1970s, it
was in its infancy.
But now I think we have
a really niche label
to be able to talk
about capitalism
as a 250-year-old
industrial system
and it is a complex,
adaptive system.
Which hopefully as
engineers, some of you
have knowledge of that
concept, that systems
can be complex and adapt.
Now in other words,
I'm not saying, hey,
capitalism's doomed simply
because it has contradictions.
I'm saying that capitalism
might be about to transition
to something else because it
has lost its ability to adapt.
And why might it have
lost its ability to adapt?
The answer is to do with the
specific nature of information
technology.
Now before we go
into that, let's
just examine the ways in
which capitalism has adapted.
OK, I'm told you're
mainly engineers,
so that may mean some of you
have not a massive groaning
in social and economic history.
But the sort of 101
version is this.
About every 50 years, the
societal business model
hits a buffer, hits a problem.
And what we tend to observe
is a fairly rapid mutation
of a system.
New social institutions,
new mixture of industry,
finance, services, consumption.
The classic one is in the 1840s
where the railways arrived
to take over from an initial
spurt of development that
was fueled by the rise
of the factory system
alongside canals.
You get railways.
And then in the
1890s, you get what
we call the second Industrial
Revolution, this fusion
of electrical engineering,
of material science,
of big infrastructure.
Iron is replaced by steel.
The telegraph is
replaced by telephones,
et cetera, et cetera.
And then in World War II, we
get this other adaptation,
this huge synthesis of
new-- a new synthesis
between technology,
consumption, et cetera.
One of the things
we observe when
we look at social historians,
at these moments of mutation
and big change in capitalism,
is that there's nearly always,
when something goes wrong,
the knee-jerk reaction
is nearly always for the
elite to try and solve it
through pressure on wages,
pressure on consumption.
Basically just cuts everybody's
wages and carry on as normal.
And usually, up to
now what's happened
is that that hasn't worked
because workers resisted.
The 1880s and '90s are
a brilliant example
of this from social history.
But this time, it didn't happen
because the specific solution
that was adopted when the
old Keynesian economics
of the 1970s and '80s fell apart
was what we call neoliberalism.
That is, a free market system
in which wages were more or less
strategically suppressed.
So any Americans
here may know that
the median hourly male wage in
America was the same in 2008
as it was in 1973.
So lower was much worse,
higher was much better.
And this is a problem,
because it means--
and this is the kind
of clue number one
why we might be
facing strategic,
big 200-year long kind
of epochal change--
is that if you get a situation
where capitalism is in trouble
and it adapts through
suppressing wages,
then what it
eventually does is it
finds another solution
to consumption,
and that is credit.
So since about the 1990s,
we have a situation
where wages are suppressed
for the mass of people,
and yet credit is very,
very much more available
than it ever was.
What happens there
is it's almost
like a law of physics, some of
your physicians in the room.
That laws of physics,
but it's economic,
that if you've got static
incomes and ever-expanding
credit, that at some point,
the kind of wine collections
and the art collections and the
luxury apartments at Vauxhall
Bridge cannot go on rising in
value, and they just snap back.
We call that a boom-bust cycle.
And we've lived through
three in 15 years.
So this is a signal
that something
might be wrong with
the economics that
is not being actually
solved by the technology.
It's not being solved by the
creation of new, high value,
high wage, high sort
of well being synthesis
of the kind you got in the 10
to 15 years before World War I.
OK.
Now here's my explanation,
drawn on the work of others,
of why that might be happening.
Because information technology
is different in the three
following ways.
First of all, it is corroding
the price mechanism.
An economist call
Paul Romer in 1990
wrote a paper that has gone
down in history for its title,
because a British
politician Ed [INAUDIBLE]
once tried to quote
it in Parliament.
It's called "Endogenous
Technological Change."
But the 101 warm
version of it is
that if you can-- if the
reproduction cost of something
is dictated by the actions
Command-C, Command-V,
then economics tells you that
its price should fall to zero,
or close to zero.
Because you're using zero
energy, or almost no energy,
almost no labor, and
almost no materials.
We'll come to how much
material, energy, and labor
you're using in a minute.
But if you can copy something
for free, then economics,
mainstream, non-market,
Marxist economics
tells you that
its price is going
to be close to zero under
conditions of competition.
This is what Romer says.
Also about information
goods is they are
what economists call non-rival.
So if you smoke one
inch of a cigarette,
I can't smoke that one inch.
I can smoke the next
inch, especially
if it's one of those
cigarettes that you share.
But I can't smoke
the same inch as you.
It's a rival good.
Not true of an MP3 track.
Not true of the database
that builds a Boeing 787.
You can copy it and use it at
the exact same time for free.
Now Romer said in this
situation, the only thing that
keeps the price
mechanism-- i.e.,
things cost more than zero--
is if you artificially
create scarcity.
Because information
is now abundant.
It's unlike all other goods.
Obviously, there
are limits to it.
The limits are
storage and bandwidth.
But information is
essentially abundant, as far
as most people are concerned.
And so what you do to
maintain any kind of price
is you create artificial
restrictions on it,
using either a widget.
You remember DVDs.
You couldn't copy
a DVD because there
was a widget inside the
protected software that
takes 13-year-olds about
10 seconds to break,
but nevertheless, it's there.
Or you get a good
lawyer, and you
arrest every person
in the car park
at the supermarket going
around with fake DVDs,
and you sue the pants off
everybody who tries to copy.
You'd shut down
BitTorrent, and et cetera,
et cetera, et cetera.
Now you can do that.
But essentially, the good
itself is replicable for free.
The next thing
information does--
and you will be very,
very aware of this.
Some of the audiences I
speak to are just, oh, wow.
Is it?
But information dealings
work from wages.
Information blurs
the distinction
between work and non-work,
or what we used to call life.
And it de-links work
hours from wages.
So my dad's generation,
they turn up at a factory.
If you're not there
on the production line
cranking the screw here, I
can't tweak the nut here.
So you and me have to
turn up at the same time,
and the work is sequential.
It goes past.
Best to give us both
a little card, clock
into a machine that
goes clunk, and pay
is when we arrive, and stop
paying us when we leave.
That's work-- that's
capitalist work.
Your work is different.
I mean, when I tell people about
the white board and the yellow
Post-it notes who are not
in the world you're in, they
don't-- they go, wow, really?
Do people work like that?
But you will know the modular
basis of most information work.
You pick up the
bit of the project,
you work with it for a bit,
you put the Post-it note back
and you record your work.
Somebody else can
take it, pick it up.
Modular work allows very,
very easily distributed
and networked forms
of organization.
But it really challenges,
what are we being paid for?
So my common experience
like some of you
is you get on a
plane to Brussels,
you try and keep your
elbows away from the person
next to you, you try
and do a bit of work.
If it was a factory,
it would be closed down
on health and safety grounds,
the kind of morning flight
to Brussels.
But we are actually all working.
Nobody asked us, what
time did you start work?
Nobody really cares if
I flip to the latest
episode of "Game
of Thrones" when
I get sick of my spreadsheet.
Because we work at a
target, not to time.
And that in itself
is quite interesting,
because it means at
the higher level,
we're all target-based
rather than time-based.
And at the lower
level, we're tending
to create jobs in a
lot of societies that
almost don't need to exist.
We could be automating a
lot of work a lot faster,
but the societal
limits to it, our fear
of creating-- the Oxford Martin
Institute says 47% of all jobs
are automatable within 30
years-- our fear of doing it
means we don't do
it, and we instead
create lots of
person-to-person jobs
at very, very low value that
probably don't need to exist.
The first time I walked
into a McDonald's where
you could touch screen and undo
your order on a touch screen
and then swipe your
card, I mentally cheered.
Because it's no fun
being one of those people
behind the counter.
It's no fun standing
in the queues going,
am I being served
or not being served?
Is she serving me or not?
The whole thing is automatable.
Who knew?
When I first got a
car, we used to put it
in something called a car wash.
It was a machine.
You know, you put your coin
in and the thing came over you
and washed your car.
Who knew that eight
guys with rags
could undercut that machine?
They undercut it because
labor is so cheap.
In other words, we're
not forced to innovate.
So that's the second thing.
Work and wages.
And the third thing that
flows on from the modularity
is that organizations and
hierarchies and ownerships
are beginning to
fragment as well.
So you know that many
people in your space,
also in the open source
space, will literally
be working in no managed--
no managed hierarchies.
They'll be working in
very flat hierarchies.
They'll be working
sometimes non-managed.
And in some
organizations, the product
is produced in a
non-managed way.
Wikipedia is a great
example, because nobody
tells some professor
sitting in Seattle
or wherever to do a
page about Napoleon.
They just do it.
The organization facilitates
the voluntary creation
of a product.
But you can see,
those of you who
use open source tools
will know that, in fact,
that way of working,
it's not like somebody
sitting in the middle
of a committee.
There is a committee
on TCP/IP isn't there?
There's a committee
that looks after it.
But that committee doesn't
tell people how to improve it.
It just improves itself
through interaction
of people who use it and
make improvements to it.
Ruby on Rails, et cetera.
So these three things, the
price mechanism dissolving,
the link between work
and wages dissolving,
and then organizations and
hierarchies-- organizations
and hierarchies being
decentralized, falling apart,
and the ownership of
things not being clear.
So who owns Wikipedia?
Well, you know, technically
probably Jimmy Wales probably
owns it.
But it is an open source
product with which
every other
corporation on Earth,
if you trace their IP addresses,
transacts every day, probably
every minute.
This is very new in the
history of capitalism.
So the price fall thing is
the most important thing.
Why?
Because it doesn't
just impact on-- it
doesn't just impact
on information goods,
on virtual things.
I kind of rebel against the word
cyber, immaterial, and virtual.
Because as the Oxford
professor of philosophy,
Luciano Floridi tells us,
information is physical.
Those of use who have
studied cybernetics
know about Norbert Wiener, the
founder of cybernetics in 1948
writes, "information is
neither mass nor energy."
It is something
new, and materialism
has to adjust for that.
I disagree with that,
and Floridi does as well.
I say information
has its own dynamic
separate to mass and energy.
Of course, funnily enough,
the laws of that dynamic
are weirdly mappable onto
the laws of thermodynamics.
But leave that aside.
But it needs mass and
energy for representation.
And therefore, it exists
in the physical world.
And that's what explains
any physical good that
is heavily dependent on
an information content
is also very susceptible to
this exponential price fall that
is inherent in the idea of
information costs nothing
to reproduce.
So you will know that
if I add PowerPoint,
the price of bandwidth,
processing power, and storage
is all over a 15-year
period exponentially
off a cliff like that.
Deloitte, the
consultancy, believes--
I don't know whether
this is true-- believes
that that exponentially
will just carry on.
They call them
exponential technologies.
And it means that we've
never lived through.
My dad's generation, my
granddad's generation,
industrial workers in factories
never lived through a period
when a technology fell off
a cliff in price terms.
And how do we know
that it's important?
Because it's also affecting
things like DNA sequencing.
The exponential curve of
DNA sequencing price fall
is faster than Moore's law.
It's actually,
bang, off a cliff.
If you thought your kids
would make a big living,
a high value living sequencing
DNA, no, they won't.
What do we call it?
Synthesizing DNA, yes,
because that's a lot harder.
But eventually, information
will-- technology
will develop to a point where
we can do that exponentially
faster and cheaper as well.
So what happens, what's
capitalism doing?
How is it changing to defend
itself against these problems?
Well, you're sitting in one
of the defense mechanisms.
The evolution of the
large technology company,
which exists one way
or another-- I'll
put it simply like this--
to create a barrier
around some information products
whereby that price does not
fall to zero.
Now your one is quite
an interesting one.
We can talk about the
interesting way it has adapted.
I'm a fan of it.
But let me give
you a good example.
99p a track on iTunes.
What determines that price?
Supply?
No.
The supply is infinite.
Demand?
No.
The demand might be
infinite, actually.
We don't care what
the demand is.
Quality?
No.
The same track by some
bog standard group
is the same as a classic--
rock classic, 99p.
It's determined by
the fact that Apple
has a 95% share at
the time I start
writing this book of
online digital music, that
which is paid for.
They can dictate the price.
That's the defense mechanism.
Of course, then you
create technologies
that you have to use.
It's easier to use
certain technologies that
help you maintain that price.
Now economics says
that the moment that
is-- the moment that
monopoly is subjected
to effective competition,
price should fall.
And there's a website
called Information
is Beautiful who have logged
the impact of competition.
Because right now, to make
the minimum wage in the USA,
a solo artist signed
to a record label
will have to get 1,500 plays
on iTunes of a single track
to make the minimum wage.
On Spotify, it's 1.1 million.
So the price-- the
impact of competition
has collapsed-- tell me what
power of 10 that is-- it's
collapsed the price.
Right.
Now to cut to the
chase, there's that.
There's the tech monopolies.
There is the fact that
we've actually begun to,
as well, as human beings, I
would argue, live and create
value and create our own social
image much more outside work
than my dad's generation did.
You all know that
workers for 200 years
thought of themselves as kind
of communities and factories.
Now through network
technology, we
create several personalities,
and we live in networks.
We live far more in networks.
We are leaky in the terms
of our personalities,
ourselves in a way that
previous generations didn't do.
And at the edges,
we are beginning
to see new forms of
economic production.
So all the open source stuff
is a new form of economic life.
It doesn't map onto the state,
the market, the public library.
It's different.
And I argue that
we might therefore
be in the beginning
of a long transition
whereby the state which we know,
which provides maybe 30% to 40%
of GDP through providing
essential services,
the private sector, which has
provided the rest, and then
this new non-market,
difficult to price,
free stuff and voluntary
incorporation sector
is growing up alongside it.
What's the problem?
What's the problem for me, if
you use Ruby on Rails or PHP
or whatever, it's not
a problem for you.
Problem for me as an economist
is, how do I value it?
There's a brilliant
tool called CATIA,
which is used to virtually
manufacture aircraft.
If you look at the small
print in Dessau-- Dessau
systems owns this software.
It's about 25,000
a head, a desk.
It's a really top-end software.
And then the small print of
their annual report it says,
what's the main risk
to this company?
It says, the main
risk to this company
is that somebody works
out how to copy and paste
the program CATIA 3.0.
Because if they can do that,
then the value of this company
falls from there to there.
So economics just
doesn't know how
to value or understand this
third post-capitalist sector.
And the challenge for us is to
work out what to do about it,
and whether or not
it's a good thing.
I did a debate about this
book a couple of weeks
ago with one of Jeremy
Corbyn's advisers.
And a developer from
the open source world
stood up-- it was in
St. Paul's Cathedral--
and said, well, what should--
what should happen to me then?
Should I be paid wages for
developing an open source
product?
And I said, no, because
that's postcapitalism.
The point is, I write
my Wikipedia page.
I'm going to make a
documentary and put it out
for free, crowdfunded on
Indiegogo because I believe
in this.
I go to an organic farm
because I believe in it.
And I want part of my
life to be non-capitalist.
And this Corbyn
adviser said, no, no.
You should be paid wages.
And in other words, they
wanted to drag him back
into the wage sector
because they just
couldn't understand what
this new sector could become.
I would like to expand that
new sector for this reason.
I once interviewed Larry Page
and Sergey Brin before the IPO.
And I said to them, what
is your remaining ambition?
And like they said, I'd like
to design a machine that
knows everything.
At which point
there was this kind
of massive jaw drop
among kind of all people
who were sitting around,
because they all wanted
to talk about computer stuff.
I want to design a machine
that knows everything.
Well, there's an
economist called
Ken Arrow who was once the
guru of economics in the 1960s.
He was one of the
first people to think
about intellectual property.
We used to think
intellectual property was
like a public library.
We used to think information
was like a public library.
It was a public good
like a water system.
You turn on and off,
[INAUDIBLE] it's just there.
In the '60s we realized
it wasn't that,
and we needed to economically
classify it and understand it.
And Ken Arrow came up with one
of the neatest descriptions
of what information property,
information-- owned information
does.
He says this.
In a free market and
with private ownership,
if entrepreneurs
produced patents
and intellectual property, then
the aim is for it to be scarce.
Therefore, in a free market
with private property,
an intellectual
information economy
will lead to the under-- the
systematic underutilization
of information.
Now I would like
to see a society
where there is the
systematic full utilization
of information.
And therefore, what I
argue is that you probably
can't have private property in
a free market in information.
And it's the property bit
that I would like to attack.
The market bit is good.
It sorts out the information.
It's the property bit.
In other words, some
of it should be free.
It wants to be free.
It should be free.
And so what I would
say to Larry Page now--
I wish I'd thought
of it then-- but what
I would say to him if I ever
met him again is you can't have
that machine that
knows everything,
that even this thing
that you guys work on,
which is a machine that is
trying to know a heck of a lot,
it can't know everything
for this reason.
You can ask it any
question you want,
but I can't ask it all
the questions I want,
and therefore you don't
know what my questions are.
I can only ask it
the dumb questions
that I ask via the interface,
whereas if it was open source,
we could all ask
it every question.
And then your machine would
know everything far quicker
than it's going to
at the current rate.
I don't know what that means
for the commercial model,
but it means that if we all
open sourced more stuff, then
the leading edge of that which
is not ownable, not-- rather,
that is ownable, that has
ultra value, that is innovative
would be far more identifiable.
And we'd all have a far
more equitable relationship
with that which
should be shared,
which I think is far more than
is currently being shared.
That's it.
Great.
Thank you very much.
[APPLAUSE]
MALE SPEAKER: Just a few
things to pick up on there.
Eric Schmidt, he famously
said, Google is a [INAUDIBLE]
decapitalistic company.
So what does
postcapitalism selflishly
mean for Google, and
what do you think
it should mean for Google?
PAUL MASON: OK, look.
I think there was a phase
in Google's history,
and we recovered it.
I watched it go from
a good idea to one
of the most important
corporations in the world
where you had to say, look.
We have to decide that
which is capitalist
and that which is
not capitalist.
You could rationalize
the 80:20 principle,
and completely capitalistically,
you probably do know.
But there are
non-capitalist ways
of even rationalizing that.
However, for future-proofing
a giant tech monopoly,
I think what you
have to understand
is that this process of the
price mechanism dissolving
is probably happening.
It's like Wile E. Coyote.
It's happening
beneath your feet,
even if you're running
along horizontally.
The price of stuff,
of information stuff,
is going to fall more rapidly
than I think people understand.
So future-- easy to
say, future-proof iTunes
by becoming Spotify, because
you're just not going
carry on being able to charge
99p, bom, bom, bom, bom.
Future-proof HBO by
becoming Netflix.
It's kind of, move to
a quasi-sharing thing,
even if you're still charging.
But I don't think even
that's going to last.
Clay Christensen,
who's the guy who
invented the idea of
disruptive technology,
always points out that
BlackBerry just could not last.
Despite having a cast iron
infotech and defensible IP
monopoly, it just disappeared.
So you've always got to
be asking yourself, not,
how do we stop ourselves--
how do we keep BlackBerry
being the only smartphone?
You can't.
It's not going to be.
So you just have
to ask yourself,
what does the corporation
do as one monopoly
after another kind of
falls away from us?
And I think you are.
That's, I mean, that's what's
behind-- clearly, to me,
behind--
MALE SPEAKER: Popular
rather than monopoly.
But--
PAUL MASON: I know you
don't like monopoly.
MALE SPEAKER: So get ready
for questions in the room.
There's just one question I
want to ask you before that,
which is about Karl Marx.
And there's a
fascinating passage
where you pick up on a
sort of lost document
that Karl Marx
wrote in 1850 where
he kind of predicted this.
And there's a quote, which
I've picked out, which is,
"capital collapses because it
cannot exist alongside shared
knowledge."
PAUL MASON: Yeah.
So it's an amazing
document, "The Fragment--"
it's called "The
Fragment on Machines."
And it wasn't discovered by me.
It was actually
really popularized
by a guy called Antonio
Negri who is now well known
for his work on the "Multitude"
and kind of far left
of Italian-- he was
even more far left then.
But Negri and the Italian
autonomous Marxists
discovered this text.
And what they
recognized is there's
a completely other
collapsed story in there
than there is in the normal
Marxism of "Das Kapital," which
is all about the clash between
private ownership and equitable
distribution, effectively.
So in "The Fragment" he
basically says, look.
What we're getting is
a kind of technology
where all its effectiveness and
productivity derives from what
he called social knowledge.
That is, he'd
observe telegraphers.
Telegraphers don't just work
with a kind of a switch.
The machine is all
the telegraphers.
In other words, it's
an early network.
You could probably look
at early railway networks
and identify some early
features of network
rather than simply
hierarchy in them.
But Marx is saying, what
this is going to lead to is
when all the innovative
power of society
is concentrated at
the level of ideas,
then the private
property side of things
is going to fall apart.
And in an amazing leap-- he
calls it the general intellect.
When there is a
general intellect,
you can't have private property.
But in an amazing leap, he then
does this thought experiment.
He says, right.
What would the ideal
machine be for capitalism?
And he says, it would be a
machine that costs nothing
to make and lasts forever.
Because he says then,
then everything it does
is beneficial.
And everything it does draws
down to social knowledge.
And it costs nothing to do.
I mean, in other words, I think
software is a machine that
costs nothing to reproduce
and would last forever
if you wanted it to.
It only becomes
obsolete-- it could
last-- I'm sure that there's
a version of Windows 3
sitting on a crappy old
laptop in my loft somewhere.
If I fired it up-- I've got
a Mac that I can fire up
and it's still got-- from 1984.
It still works.
So it's kind of--
it's the idea--
and the problem is because he
wrote it at 4:00 AM in 1858,
and then he never published it.
And therefore, everybody
forget about it.
But it's a fascinating
sort of insight
into some of the
problems we are facing.
MALE SPEAKER: Right.
Your questions.
And please wait for the
microphone to come to you.
AUDIENCE: Hi.
I got the impression
that you think
that interpersonal
bandwidth has increased
because of distributed networks
and distributed communication.
But isn't it much more true
that it's massively decreased?
Because now we are communicating
through distributed networks
based on text and video
very asynchronously
rather than face
to face as we're
doing now with our
massive bandwidth of all
of the [INAUDIBLE] ability
to read each other.
And so effective
social media is not
to increase important
information distribution.
It's to decrease the ability
of the workers to organize.
PAUL MASON: Well, I think
there's loads of concepts
there, and my brain's struggling
to unpack some of them.
But let me-- I think it was
the novelist Thomas Pynchon who
in 1967 in the novel
"Gravity's Rainbow"
actually said bandwidth
increases in inverse proportion
to density.
About people.
In other words-- let me tell
you what that means to me.
As a result of the
information revolution,
I feel a denser person
and a more-- I mean,
denser and a richer person,
and a more connected person.
And I feel that I'm able to
bring-- to upload knowledge,
use it, and download
knowledge in a way
that I couldn't before
the information age.
Literally, my brain is a
product of this transition.
And things that I
would have had to spend
years analogally learning to
remember, I now don't have to.
So I think that makes
me a more richer person.
But I do buy the idea that
we now have weak ties.
We have what the
sociologist Richard
Sennett has called weak ties.
But the weak-- in a
network, the weak ties
can provide collective strength.
AUDIENCE: OK.
I would say that personally,
I am a much less dense person
in that sense because each day
I get on a train for an hour
and I stand in a metal tube
with 100 strangers, none
of whom I talk to, and
everyone is on their phone,
getting a much lower
bandwidth connection
to the people around them.
May I ask another question.
PAUL MASON: Fine by me.
AUDIENCE: Do you think
there is no analogy at all
between open source software
and pre-enclosure [INAUDIBLE].
PAUL MASON: Yep.
I do think there is.
So I don't use the word
commons, because I think--
because the commons is an
overused thing in the world
that I'm talking about, in
the sense that I want to try
and-- the commons were
part of feudalism.
This is what people
don't understand.
That a common was a forest.
And the point-- the free stuff
you got from it was firewood.
Which if you think about
being a peasant, that's
quite important.
Otherwise you don't eat, right?
It then said, you can't
chop the king's trees down,
which everywhere else except
the commons, that was true.
You starve.
So the commons is a
key part of feudalism.
Then Shakespeare,
where do people
go when they want to
dream and be free?
They always go to a forest.
In other words, it has that
mythic and almost functional
role in feudalism.
The commons in
capitalism can't exist.
It's inimical to them.
In postcapitalism, you have to
promote that which is common.
But what I'm wary
of is the obsession
with specific forms of
peer-to-peer, quite low level
stuff.
I think that we'll have
different ranges of stuff,
things we produce,
some of which will
be common like
common, some of which
will be kind of a
negotiated sharing.
Creative Commons license isn't
really a common in that sense.
I've published
Creative Commons stuff,
and I'm rigorously sticking
those little extra bits on it
so that my rivals can't copy it.
And I mean, Creative Commons is
a negotiated common rather than
a flat freedom.
But we could talk a
lot more about this.
Do you want--
AUDIENCE: I have a
question over here.
PAUL MASON: Yeah.
AUDIENCE: [INAUDIBLE].
Right.
So you may feel this is a
fad, but you come across
as quite Marxist, really.
And the best thing about
Marx is always the analysis
in the peak of capitalism.
But he also talks about power
structures and the dynamics
and the society trying
to better [INAUDIBLE].
So my question to
you is, do you think
that the pressures on
price you describe,
which were analogous to some
things which were happening
in the 19th century
with mass production,
are going to result in the
world evolving nationally
to postcapitalism?
In other words, do
you basically think
that market mechanism works,
and Spotify will conquer Apple,
and then whatever comes
next will conquer Spotify?
Or do you think there's an
issue about how we get there?
And if there is an issue
about how we get there,
how do you resolve that?
PAUL MASON: I'd certainly think
there is an issue about how
we get there.
I certainly think
that-- that there
are-- that there are both
political and economic
mechanisms.
Because your own company--
and it's not alone
in the tech sphere--
will spend a lot
of money going to Brussels
and to Washington, DC
to lobby for less regulation
on a specific sector, OK?
Now I would like
to regulate some
of the tech monopolies not
so much out of existence,
but to be non-monopolies.
So you know, I would be
quite happy to have a big six
insurge or a big
six in friendship
provision of social media,
or big six messaging apps.
I mean, there's only--
there's two or three.
I think that regulation doing
its job in the kind of Theodore
Rooseveltian sense,
pre-1914, should be promoting
a lot more competition.
And don't buy the idea that we
need a big one in each sector
to achieve scale and
to achieve efficiency.
So I would do that.
And I would also then look at
the-- the problem we have is
that's a second order problem.
The first order problem
we have is we've
got an elite in the world that's
addicted to low wage, low value
creation.
You don't work in a low
wage, low value world.
But I'll tell you that
basically, a lot of-- there's
a huge incentive to create
low value businesses
and not innovate.
You can innovate in the world
of coffee shop logo design.
Yeah?
That's the maximum innovation.
Or how to get the
nicest high vis
jackets for your semi-slave
construction workers.
That's where innovation
is taking place.
And I want innovation
to take place
that wipes those jobs
out and replaces them
with a more equitable
distribution of work and money,
not through the wages system.
But, yeah.
There's a massive
obstacle to it.
And what I've tried
to do in the book
is to provide the
economic framework
for having the
argument, and leave it
to everybody from social
democrats in Norway or Sweden
right through to anarchists
who are kind of blockading COP
21 right now to have the debate
about what you do about it.
Because I think
that the it that you
want to do something
about, the transition,
is not well understood.
So I've stepped back from that
debate to try and actually
have the debate across
parties, you know,
and across kind
of social milieu.
MALE SPEAKER: Next question.
AUDIENCE: Hi.
One of the things that
I wanted to throw out
was that the crisis
that's happening
is a crisis of profitability.
It's not so much of [INAUDIBLE].
And the way we solved
the last crisis,
which is the one
that predicated this,
and it follows that
the one way that we'll
solve this [INAUDIBLE].
And the one that we
create at the moment
is that there's
one of no interest.
There's absolutely no savings.
And a lack of-- and
the public sector
is being absolutely
removed, which
will create more space for
private sector [INAUDIBLE].
We create by
destroying, and that's
the way it's happened since the
end of the second world war.
And I think that that's
where the focus is.
I'm not sure
[INAUDIBLE] technologies
where the cutting edge of
where the next crisis will be
or what [INAUDIBLE] will be.
If there was a place where
we could go in order to work,
it would be bombed.
So wherever there
is the prospect
of a bubble inside capitalism
that is non-capitalist,
it will be closed.
It will be popped.
Because you said,
it's [INAUDIBLE].
It existing is a contradiction
we cannot contest and cannot
[INAUDIBLE].
PAUL MASON: Well, I think--
I see what you mean.
And I think that's
quite pessimistic.
Or let's talk about one
of the things you talked,
the stagnation.
The stagnation problem
is a real problem.
You're in starting your careers,
your early stage career, most
of the people in this room.
You're where zero
interest rates are normal.
This is bizarre.
You know, that's not capitalism.
Capital is money that
makes more money.
You can't have a capitalism
where-- to hold money
in the bank costs you money.
That's an abnormal capitalism.
The reason we have
it is because we
haven't sorted out
the debt overhang
of the post-2000 situation.
That's a kind of
short order problem.
I know what the
answer to that is.
Write off some debts.
Make some people--
make some people who
have savings poorer,
unfortunately,
and inflate your way out of it.
That's what you do.
We can't do it.
And the Greeks tried to
just do one bit of it.
And bang, like you say,
they were quite clearly
heavily pressured.
But I think-- I've got
this great favorite passage
from Hilary Mantel's "Wolf Hall"
where you remember, those you
who've seen it, where Mark
Rylance, the kind of Thomas
Cromwell figure, he gets this
hapless aristocrat called Harry
Percy.
And he's basically [INAUDIBLE].
And he says, look.
You think-- you think-- this is
in 1515, whatever-- you think
the world is based on jousting
and castles and chivalry
and feasts.
I know the world is
based on banking.
And I can switch-- I
know this because I can
switch your world off tomorrow.
I don't like you.
I can take you out.
You can't take me out.
Postcapitalism is about
saying, look-- to capitalists--
you think the world
is based on banking.
You think the world is
based on private property
and large monopolies, tech IP.
We can switch it off.
But I don't want to do it
in a kind of aggressive way.
I want to persuade people that
we should switch part of it
off.
And yes, exactly
to create a bubble.
And some of these bubbles are
not-- they're not smashable.
A lot of the anarchist networks
in Athens have this slogan.
You can't default on a squat.
You can't default
on unoccupied space.
I don't necessarily
think occupied spaces are
the same as Wikipedia
or Ruby on Rails,
whatever, open source projects.
They're different parts of
what the world used to make,
this synthetic, new
part of the economy.
And we haven't done it yet.
So I don't know.
The transition is a challenge.
AUDIENCE: How do you reconcile
that with [INAUDIBLE]?
Because they can close
down the [INAUDIBLE].
PAUL MASON: Yeah, they can--
as a monopoly on violence
everywhere.
But I've seen it in my
professional career.
Large masses of people use
technology to overcome that.
Even now, the people
who are the most
expert in the
Egyptian revolution
will tell you that
it's not over.
That even now when
you think it's over,
over, over, it's not.
The networks are alive.
The ideas-- this is what the
great thing about infotech
is, that in the
information world--
you'll know this
from your work--
no active imagination is
wasted because you can always
record it and use it later.
In the world of analog, then
kind of it's about spontaneity
and the moment's gone.
And so I think a lot of people
react to state crackdowns--
like Syria.
You could imagine, we
should be creating now
a virtual Syrian university.
In fact, you guys could do it
with your corporate weight,
your Facebook, et cetera.
Virtual Syrian university
that when it's over,
just basically move
from the digital space
to the analog space,
lands like a spaceship,
and it can start
working immediately.
We couldn't do things
like that 20 years ago.
AUDIENCE: I was wondering
what your thoughts are
on GMI, or basic income.
PAUL MASON: Yeah.
Well, I'm in favor of it.
Universal basic
income, or the state
as the employer
of last resort is
the quick and dirty
or slow and dirty,
but still nevertheless short
term answer to this problem of,
how do we rapidly automate?
I see it as a one-off subsidy
for rapidly automating
the world.
But of course, who pays?
It's the taxpayer.
I've done a back-of-the-envelope
calculation,
that to pay everybody the
same as the state pension here
as of right, no means
testing whatsoever,
you get it whether
you're at work or not,
six grand would double
the welfare bill.
But some of the right wing
proponents of the basic income
have kind of grasped some
of the economies of scale
that you could do via that.
That is, actually
for example, you're
going to means test people.
But lots of diseases
are to do with poverty.
Lots of disease.
And you could basically say, OK.
Well, what do we save
from that for the taxpayer
by managing diseases of poverty
and mental illness, type 2
diabetes, et cetera.
Stress, hypertension in
oppressed communities
is very high.
So if you could just take some
of the stress away from them
by making them not have to worry
about where their money comes
from, you could probably
save some of what
it costs society that way.
But look.
You know, it's not-- everybody
knows about the basic income
proposal, and there's a
right wing and left wing
version of it.
What is amazing is no
serious politicians
are prepared to [INAUDIBLE].
AUDIENCE: I have a
question on [INAUDIBLE].
So you talked a lot about
the copying being free,
which it is.
But the first copy's
always really expensive.
And you haven't really
said, how do you
motivate excellent creation.
PAUL MASON: Exactly.
And I think the--
so my answer to that
is that those of us who create
intellectual products only
have to be really-- have to
really get it into our heads
why we're doing it.
So I've written this book.
It goes out as an
analog copy like this.
And I'm absolutely certain
there's a PDF of it
somewhere on BitTorrent.
But why do I want to do that?
Because ultimately, I want to
make a statement to the world--
and most authors will tell
you that hours versus income
is minimum wage across lots
of branches of writing.
But I know that as an
intellectual product,
as an ebook, it is either
copyable or very easily-- so
what do I do?
What do I do?
Where does somebody like
me make higher value work?
They make it in corporate
speaking engagements.
They make it in
advice, in consultancy.
That's what's normal.
Let me put it this way.
Certain key artists
don't really care about--
[LAUGHTER]
--about whether their
work is pirated.
Because Glastonbury
sells out in three hours.
And in other words,
you move to the analog.
So as creators of
intellectual property,
we have to really
ask ourselves, where
is the reward going to be?
Now Hollywood has an answer
to this called lawyers.
They would like the copyright
on James Bond's "Diamonds
are Forever" to be still in
existence when the world is
atomized and become dust.
It matters to them.
Their contracts say all time
and forever in the universe
is the copyright.
So what you can do is you can
record quicker and spikier
the creation.
I don't think The Beatles
wrote their music so it could
be still in copyright in 2050.
I think they wrote it to
meet attractive members
of the opposite
sex and smoke dope.
[LAUGHTER]
AUDIENCE: [INAUDIBLE]
this makes sense.
But if you think about
the classic examples which
are always brought up in
the intellectual property
field which are
lifesaving drugs,
and software is the other
one, creating a new drug
costs billions.
And a lot of that work it
hard work and not particularly
exciting and not fulfilling.
The reason you're
doing it is clear.
You want to save lives
in a perfect setting.
But it's still
expensive, and you still
have to reward that somehow.
PAUL MASON: You do.
And I would simply create a
copyright mentality that is
shorter-- shorter and steeper.
And I think that's doable.
If you look at the different
copyrights and patent
laws for IP, it goes from--
because you know the example
of the generic drugs.
So the HIV drugs.
The Indian government basically
busted the world's pharma
companies and said, no.
You're not going
to do, no matter
how talented your guys were,
no matter how long they spent
in a lab and how boring it was,
this has to be deployed now.
So we're going to
produce it generically.
And the pharma industry has
had to react to that, probably
not in a very-- in some sense,
not in a very virtuous way.
Because what
they've had to do is
pursue that form of intellectual
property, which is niche.
So often, you get
pharmaceutical giants
now looking for a
pipeline of products
that is so niche that
you're sometimes wondering
whether or not it's
simply designed to avoid
the generic drug thing.
AUDIENCE: No, I
think the way they
avoid it is they go, [INAUDIBLE]
HIV drugs, they're going,
we're not going to
research HIV drugs.
We're going to research
anti-depressants
because we can sell those in the
US where it's still protected.
MALE SPEAKER: Right.
It's a niche.
AUDIENCE: Yeah.
And so you end up
losing a net benefit.
PAUL MASON: So society
has to take that on board.
And more important to
you-- to your world,
I think you have to take
it on board at a level a
of pure information property.
And I think this is what
we're grappling with.
I'd be quite happy to
see copyright-- quite
happy-- Penguin
wouldn't, but I'd
be quite happy to see
copyright shortened
for intellectual, pure
intellectual products
like that.
Because in the real
world, it is-- I'm sorry.
I don't know how good I am.
But basically, if I don't see
that in some kind of Oxfam shop
in the next year or so,
I'll be very surprised.
That's the analog version
of the long but narrow tail
of information products.
So, yeah.
Shorter but spikier
rewards, and recognizing
that there are tactical
things that you can do,
which is move to the
world of analog space.
And sometimes it's nice.
Actually, the
bandwidth at a concert
is high, whereas the
bandwidth with a white wire
is not as high.
MALE SPEAKER: Yeah,
I mean, you talked
about-- actually, people
laughed when you said
what we need to know is life.
But then we see books about
chopping wood and living
in cabins, and responding
to your concern
about not talking to
people on the tube.
I mean, these things are sort of
bound up together, aren't they?
PAUL MASON: Well, you know,
and also about-- there's
a story that isn't mine of
a kind of famous iconic case
today of a guy who
made axes in Sweden.
And basically, he had a
mass production ax company,
and it wasn't going anywhere.
So he went away and rethought
for a year and said, right.
Well, we've got an ax museum,
so we'll look at 700 axes.
Because you need axes
in the Nordic country
to chop your wood.
It's not just a
kind of status item.
And so they designed what
they thought was a perfect ax.
And so they produced it as
a kind of craft product.
And that lasted two years
until a Chinese version of it
turned up in their
equivalent of being cute.
And so they went,
well, what can we do?
So they simply, as
well as all the kind
of extra bit of nice
packaging and paper
and you get your individual
ax, they just said,
it's got a lifetime guarantee.
When it runs out, when
it actually breaks,
just bring it back.
You can have one for free.
And in other words,
that was a rethinking
of a very physical product
in a kind of open source way,
or as certainly a
quasi-open source way.
And I think it's just
a good example to me
about-- so you were talking
about lifestyle, life and work.
It's about thinking
about-- thinking
beyond the short-term
remuneration issue of work.
I mean, the 80-20
thing, you know,
is a good example of doing it.
But I bet there are
other corporations that
do it in an even
more interesting way
that we haven't heard about yet.
Yeah?
AUDIENCE: [INAUDIBLE].
Going back to your
universal income question.
How do you handle
that against a type
[INAUDIBLE] primarily sort
of housing here where it's
a competitive bidding war.
There's a limited
amount of housing.
So if you just increase
everyone's income
by a factor of 10, or what
happens is by next year,
house prices have gone
up by five or 10--
PAUL MASON: I wouldn't
increase anybody's income
by a factor of 10.
At least by a factor
of 0.1 is more like.
But yeah.
You know, weirdly,
even-- it is weird,
especially for maybe people from
beyond the British Isles, born
outside the British
Isles, or young.
You know, when my grandma--
she lived in a slum
for the first 30
years of her life.
And just before World War II,
something quite remarkable
happened.
The state gave her a house.
They gave it to her.
She didn't buy it.
That rent was minimal.
And she could have it for life.
Basically social housing
could be cheap or free.
And actually, we know how
many people there are.
We know what the
population projections are.
We know what the demand
side is going to be.
You could easily meet the
demand with supply and tank
the market if you wanted.
I don't see that
as a big problem.
I see the problem you describe
as what if everybody's income
is kind of reliable?
Does it suppress competition?
Because it would.
You could actually--
if somebody paid
me X grand a year not to
work, I'd probably work less.
And the reason I
want us to think
about doing that is
because don't think
there's going to be
enough work to go around
of a satisfying nature.
And what's going
to happen-- there's
a lot of angst around
gender balance and ethnicity
balance in work forces.
And I'm glad to see
you guys have clearly
put a lot of thought
into how to do that.
But 20 or 30 years
down the line,
you're going to
have male be female,
black be white, et cetera,
et cetera, competition
over a very, very scarce
number of high value jobs.
And I think we need to kind of
address that really to avoid it
all being the Oxbridge
graduates who get everything.
We just have to kind of think
around the problem societally.
AUDIENCE: OK.
So assuming before universal
income could be a thing,
you would have to vastly
increase the supply of houses.
Otherwise, someone's
getting 6k a year
but then basically the
rent is paying the level
of [INAUDIBLE].
Your rent can be-- you
can just live on, say,
500 pounds for your groceries.
So I'm going to
set rent at 5,500.
And increase the universal to
10 [INAUDIBLE] of the rent's
going to go up to 9,500, which
is everything you've got other
than you need to survive.
PAUL MASON: I mean, I
would just-- I mean,
what I'm talking
about here is not
a series of short-term measures.
I'm trying to design a
kind of holistic framework
for how to act.
And alongside it, to take the
exact specific example you use,
you just do what New
York did in the '50s.
Rent control.
I mean, that would-- yeah, no.
It would tank the
buy-to-let market.
But these are short-term issues.
They don't solve the long-term
issues I'm talking about.
Do we have time for--
MALE SPEAKER: Time
for last questions?
Yeah, one more.
One more.
[INAUDIBLE]
Two more.
Two more.
PAUL MASON: You know
what, do it together.
AUDIENCE: So how do you think
that the current structure
of the state and the taxation
system that the state uses
to fund itself need to change?
Especially now when we have
people who are very highly
trained who [INAUDIBLE] training
who make something at one time
cost that then distributes
it everywhere for nothing.
Do you need to tax them on the
redistribution of something?
Or is that an impossible
thing, because the company
is making no money on it?
MALE SPEAKER: In the
two minutes remaining.
PAUL MASON: [INAUDIBLE].
OK.
I say in the book that
a basic income is only
a transitional measure.
Because if you-- my ultimate
aim is to make as much stuff
as possible abundant.
And so basically,
to dissolve-- it's
like taking the
complexities of the economy,
drawing them on blotting paper,
and then dipping it in water.
Basically, the complexities
disappear when stuff is free.
You know, it's like if I take
your ball pen off your desk,
you don't come running down to
reception saying, give it back.
In a sense, once
stuff is abundant,
you tend to stop
thinking about it.
So that is the solution to that.
But in the process, if
you've got a state, a market,
and a non-market sector, then of
course-- think of it like this.
The taxes from the market
sector pays for the state.
But what comes from
the non-market sector?
You know, the OECD
is very clear.
This non-market sector
is big physically,
but we just can't
value it economically,
nor can we tax it.
So you know, the
capitalist solution
is to turn Wikipedia
into a corporation,
make 27,000 people
micro employees,
and get it to pay tax.
That will be the solution.
My solution will be to say
to understand that actually,
what a product like
Wikipedia-- or we could use
other examples-- is
actually creating
a non-market value
through both the market
sector and the state.
It is like-- it's the
bit that you've already
dipped in the water.
We can't measure
it economically,
so what we have to do is
to these other two bits,
to really focus on them,
the state and the market
and say, hold on a minute.
They're going to be under
a long-term, strategic,
century-long pressure
from this new sector,
because it's going to-- it
looks like it's sucking value.
I mean, the example I give as
well is the internet of things.
There's a lot of hype
around internet of things.
It's been described as a
$9 trillion opportunity.
Yeah, it is, to take $9 trillion
of value out of the economy.
Because all it will do
is make things cheaper.
I can't-- yes, Cisco and whoever
makes switches will make a lot
of money.
Whoever installs all the
smart meters in people's homes
make a lot of money.
You guys have got
this app thing.
I mean, you've got
this house thing.
House energy thing.
I can't remember
what it's called.
MALE SPEAKER: Nest.
PAUL MASON: Nest, yeah.
I don't use it because
my house is analog.
But, yeah, you'll make
money out of that.
But ultimately,
what ILT will do is
it will basically-- it will
basically make things cheaper,
because it's going to
utilization of energy capacity,
utilization of transport
capacity very, very efficient.
So you have to ask the question,
how do we manage the transition
to where this is a bigger
sector and a more virtuous
relationship between what the
open source and free sector
provides to the other
two sectors for free
is utilized in an
efficient way, rather
than being seen as
what I described it as,
sucking value from it?
Which is how economists would
try and-- they'd say, look.
People now will say, you
know, Wikipedia's a $3 billion
hole in the ad market.
That's how people look at it.
Well, no.
To me, it's a great future
opportunity and virtuous thing.
And I want to make
it better and more
protected while controlling
the-- controlling
the deflation of the
other two sectors.
And for the left wingers
here, the traditional left,
it's actually [INAUDIBLE]
as well, but deflation
of the state sector as
well as the deflation
of the market sector.
But on that note-- and
the caveat that everything
I say as a kind of, look, as
a kind of think challenger.
That's what I'm doing here.
I'm not handing down a
kind of peer reviewed,
engineering certified thing.
I'm offering a series
of challenging ideas.
And I'm absolutely certain
that your generation
of economic engineering
software, business process
specialists will come
up with the solutions.
I don't have the solutions.
MALE SPEAKER: Paul,
thank you very much.
PAUL MASON: My pleasure.
[APPLAUSE]
