 
Thank you.
It's hard to follow the cello.
I'm actually Channel 4
News' Culture Editor.
Things can change so fast.
[LAUGHTER]
OK.
 
Capitalism is an organism.
It's like an organism.
That means it has a beginning,
a middle, and an end.
It's also quite like
an organism in that
it mutates to survive.
Those of you who have studied
economic history or have even
watched a documentary will
have seen it mutate.
From the Industrial Revolution,
through the Age of
Empire, through the 20th century
with its massive
economic state machines,
through to now.
 
I think we got wrong what
the end is going to be.
In the 20th century, we imagine
the end of capitalism
would be forced by the will
of some people I'm
going to talk about.
And that it would take the
form of an increasingly
statised society.
I'm going to argue something
different.
 
Who wants to see a picture of
capitalism morphing to survive?
Somebody.
Right.
 
These are the Kondratiev
waves.
This is not my graph.
But what can we see there?
The red line is a schematic
representation.
The black line is for real.
That's US stock prices.
And what you can clearly see
is four bull markets at the
peak of 50 year long cycles,
which the Soviet economist,
Nikolai Kondratiev,
put his name to.
Joseph Schumpeter also wrote
about them calling them the
Kondratiev waves.
The rest of this data is
confusing, to be honest, but
you can see on the green
line four clear
peaks in consumer prices.
It goes a bit haywire
in the fourth wave.
What we know as the post-war
economic boom.
The '50s, the Doris Day era.
But even if the evidence for
waves is a bit like the
evidence for black holes, that
is, we see it in the
disturbance of data around
them, rather than any
concrete, touchable evidence.
I take the waves to be evidence
of the metamorphosis
of capitalism.
The most clear one is the one
that takes place between the
second and third wave.
When monopolies arise.
When free markets become
a dirty word.
Competition is destructive, said
Theodore Vail, the boss
of Bell telecom, the first
network theorist.
So the question is what's
it going to be like
in the fifth wave?
OK.
I've run ahead.
The explanation for these
waves, the modern most
fashionable explanation for them
is that they've driven in
their initial 10 years by
a wave of technological
innovation.
So you get the spinning Jenny,
the cotton mule,
in the first wave.
The second wave is the age of
steam and the telegraph.
The third wave is the age of the
telephone, the radio, the
blast furnace, the
machine gun.
And the fourth wave the
mainframe, the transistor, the
jet engine.
 
Carlota Perez is the modern
economist most associated with
this, but Schumpeter, himself,
basically pioneered the
understanding that capitalism
is driven and metamorphoses
through these waves of
tech innovation.
Kondratiev argued
something else.
He argued that each wave
represented the exhaustion of
a business model
for capitalism.
Which we would now call a
mode of accumulation.
So that the free market in
wave two gives way to the
non-free market, the monopoly,
the statised
market of wave three.
Wave four is the global
corporation.
So what's wave five?
Well, you're living through, I
would argue, a kind of messy
and messed up start
of the fifth wave.
Messed up by the fact that
financial conjuring during the
fourth wave managed to delay,
and delay, and delay the
crunch that comes at the
end of every wave.
The crash, the liquidation,
the thing that forces new
technologies to be deployed
en masse and
wipes out all companies.
That's been delayed by
completely printing money in
the 90s, by responding
to the .com crash by
printing more money.
This leads to the crash we've
just lived through.
To which the solution has been
to print more money.
Bad companies are never
liquidated.
But meanwhile, the tech
innovation cycle has begun.
You're sitting through it.
That's the reason you're here
on your little stools.
Because you are interested
in it.
And you know it.
Those of you who are pointing
iPads at me are the visual
proof of it.
 
I will argue that wave five is
certainly composed of these
characteristics.
The network is replacing
the hierarchy.
The network, as Kevin Kelly
said, is the innovation.
He said this in 1996 in his
famous Wired article.
It's not the computer.
Everything we're going to do
with computers has been done
with computers.
The real innovation
is the network.
The second thing is the rise
of information goods.
You're consuming them now.
You've got them on all these
tablets and phones that you're
writing on.
And information goods, as
we will see, are very
interesting.
 
The third thing is the rise
of non-hierarchy.
So I could have said, the
network as an organisation,
rather than the network
as a technology.
But I'll use the word
non-hierarchy.
The sociologist Manuel
Castells points out,
increasing numbers of modern,
that is 21st century
organisations, work through
non-hierarchical structures.
Whether it's an Occupy movement,
whether it's a
co-op, whether it is
some companies.
Google, at a certain phase
in its existence
worked like a network.
Many of us, the virtual company,
those of you who work
in them work through
network-style organisations,
as well as network technology.
And I will also point out that
this is the first period in
capitalism's history where
states decided to organise the
market to drive carbon
emissions down.
They've decided to organise
the market before.
To create full employment or to
win a war in World War I or
World War Ii.
But this time, the market is
being organised to drive down
the carbon emissions.
And that is a new feature.
That's something that isn't
economically determined.
It's ecologically determined,
but nevertheless, it
complicates and adds
to our picture.
 
But if this is the emerging
new economy,
we have some questions.
Who are the bearers of this
new set of things?
People like Theodore
Vail brought the
20th century to us.
People like Richard Arwkwright
brought 19th century
industrial capitalism.
He understood what it was
and pioneered it.
Wedgewood.
Who are the people who are
pioneering the fifth wave of
capitalism?
Is the first question.
The question Peter Drucker, one
of Schumpeter's pupils,
asks, there have to be new
people, new men, he says, to
bring this thing.
That's the first question.
But the bigger question is this,
I don't think that's a
form of capitalism.
I don't think networked,
non-hierarchical, increasingly
collaborative, economic
organisation is a form of
capitalism.
Or if it is, it's a form of
capitalism that is going to
challenge some basic assumptions
we have about
capitalism.
And here is why.
Paul Romer in his famous paper,
non-endegenous growth
in 1990, pointed out that
information goods are unlike
any other commodity that
has ever existed.
In that they destroy what
economists call the price
formation mechanism.
You no longer get scarcity
where prices are then
determined in the market, but
by supply and demand.
Because for information goods,
unless they can be protected
in some way, the supply
of them is unlimited.
So every single one of us on
earth could own every iTunes
track that has ever
been created.
Now, in fact, it would
be called sharing.
Because you don't
even on them.
Apple owns them for now.
But we could all collectively
own them for nothing.
We'll come to why
not in a minute.
Since Romer wrote his famous
thing that the price mechanism
is destroyed by the lack of
scarcity because information
goods, if they are copyable,
then have to be protected
legally, and that's the only
reason they have a price.
Like an iTunes track.
Because try copying
one for nothing.
Since he wrote that, something
else has become more obvious
and something I'm writing
about in my book, Post
Capitalism, which comes
out in 2015.
And that is, physical goods
increasingly have a high
information content.
Well, I don't mean the tablet
you have in front of you, but
a jet engine.
A turbofan increasingly
has content in it.
You know a drug is just
a formula made
into bits of powder.
But also a turbofan is
increasingly that.
It is the crystal methodology
that enables the blades to run
at a certain speed
without bending.
It is the airflow, it's the
thermodynamic knowledge.
I think we have to begin to
understand physical goods as
having some of the
characteristics of info goods
and it's not far off.
Where as you can copy and
paste a poem, you
could copy an MP3.
We're not far off.
And, in fact, through 3D
printing, we've got the
crude form a it.
Of copying and pasting
objects and things.
This is already in
use, 3D printing.
Already in use in
so many things.
This is the crucial thing.
Because it destroys the price
mechanism that has existed for
200 years in capitalism.
But there's another crucial
thing which we'll come to.
Before we do, what have been
the corporate responses to
information's special
characteristic.
Three responses.
One is to monopolise it.
So to protect it.
So you say, the reason you
can't all owns iTunes is
because Steve Jobs going
to sue your ass.
Or his next person, the
guy who runs Apples.
OK?
That is the only logical
response.
I would argue that's why the
tech upsurge has created only
monopolies.
The first thing you do.
I've got this, I'm a start-up.
Right, we need to become a
monopoly, otherwise our
information, our IP,
is not defensible.
We can't have three Googles.
We can't have three Facebooks.
There's four big accountancy
firms, but you can't have four
big social media engines
doing the same thing.
The second one, which Kevin
Kelly wrote about, is to skate
on the edge of chaos.
To recognise that the abundance
is tanking the price
of everything.
But that it creates demand and
that if you can actually skate
between that, you can
be the cheapest.
Just as the price of an eBook
is falling on this curve, if
you could get inside that curve,
you can make money.
And the third one is the rise
of non-market forms of
economic life.
Wikipedia is one.
All the communes and co-ops
created in places like
Catalonia, which Castells
writes about after the
financial crash are another.
Many of us work on the life side
of the work-life balance
and we create things that are
not easily categorised as
commodities in the old
capitalist way.
Yochai Benkler in The Wealth of
Networks has described in
detail the birth of these
non-market forms of
production.
What they do?
Wikipedia has wiped out
Encarta, Encyclopaedia
Britannica.
So it wiped out an analogue
product and it wiped out a
digital product which could
not be defended in the way
that Paul Romer wrote
because it is free.
And just imagine that the free
wipes out the paid for.
It's the first example
we have, but it
might not be the last.
My argument is that the key
contradiction in modern
capitalism is between this
emerging possibility of free,
socially produced, abundant
goods and a system of
monopolies, banks, and
governments who are forced in
order to survive to behave
desperately to maintain this
information asymmetry.
I know the API to Facebook,
or Twitter, you don't.
You can't.
If you use it, we
can change it.
 
Everything is pervaded by the
fight between the network and
the hierarchy and we don't
know where it ends.
But one possible end is this.
The other thing that capitalism
did was to call
forth these people.
These are workers on
a barricade in
Barcelona in 1936.
In the Spanish Civil War.
People think the working class
were all sort of men.
Well, just look at that.
 
Who are the people who could
bring forth a post-capitalist
capitalism?
Or a post-capitalist economy
that's unlike what they
dreamed of.
Or a different outcome than
what they dreamed of.
Well, here's the problem.
As well as tanking the price of
everything that cannot be
defended legally and making
abundant information goods,
this fifth wave of capitalism
does something that is
worrying people at the very
top of the system.
When the six most powerful
central bankers in the world
sit down and worry about stuff,
the number one thing
they worry about is the failure
of this information
technology revolution.
To do what the forward
revolution did, which is to
create jobs.
And wages.
Because Ford thing was clear.
He doubled the pay for
the workforce on
the production line.
Efficiency increased and the
overt theory was one day they
will buy a car.
 
Automation, robotisation, and
the general deployment of
network technologies is putting
in your hands the
power to do work.
Right now, you're
doing the work.
I can see all of you with
your blue-lit faces.
 
But it's not creating
many jobs.
It's not creating
high-value jobs.
And it is expelling labour
from the capital labour
relationship.
And who is it expelling the most
is the people who live
through the crisis, the young.
I will argue in the 40 seconds
I have left simply this, it's
created the networked
individual, the person with
weak ties, rejection of
hierarchy, the massive ego,
the massive personal space
around them-- don't touch me,
don't harass me, don't
get in my space.
They're not very collective,
but they're very powerful.
And I think the answer to who
brings this thing with
whatever it is, whether it's a
new capitalism, or a kind of
half-capitalism, or a
post-capitalism, is them.
Spanish people in the
Occupy movement.
 
They're not all that
different.
But they are wanting something
different.
And have different ideals and
I just don't think they're
going to take what an unchanged
capitalism is
offering them.
Thank you.
 
