At the turn of the 20th century, America and the world over was rapidly changing from an agrarian economy to an industrial one. History would call this moment in time the Industrial Revolution. And like all revolutions, it was hardly a bloodless battle, metaphorically speaking. The way the world had to fundamentally change its views, both economically and politically, caused many to take polarizing views both for and against progress. Many farmers took hostile views towards manufacturing production, holding to the manual, timely methods of agricultural production. Those for progress, in appreciating the innovation of machines who promoted low-skilled labor and mass-production called these folks Luddites. The name takes its origin from the inventor Ned Ludd, an early industrial pioneer in the 1700s with his early mechanical textile production methods.Today that term refers to those who fear a different kind of change; the rapid technological change that started with the internet. I contend that the Internet is the Industrial Revolution of our era. And much like the Industrial Revolution before it, we as a society must again redefine our economic and political philosophy. For in the age of the internet, our present views like Capitalism and simple majority, two-party politics are way out of date.
From the industrial revolution came a new economic philosophy; Capitalism. The term itself was not invented until about the mid-19th Century. Most commonly, it is defined as:
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.
In Capitalism, as has occurred over the past 150 years, individuals motivated chiefly by economic gain try and control as many of the means of production as possible. The investment in information capabilities and entertainment is but a fine way to illustrate this way of conducting economic affairs.
From the 1920s through to the 1950s, Hollywood was a vertically integrated oligopoly. The five major studios of the day controlled not only the means of production and financing, but also the distribution and exhibition of the product — namely films. In a landmark Supreme Court case in 1948, the “Big Five” studios were ordered to sell their ownership of movie theaters as it was ruled anti-competitive behavior in violation of existing Monopoly law.
However, if you look at the industry from a competition standpoint, the Supreme Court decision has not done much to liberate creative product from vertical integration. While the big studios of today do not directly own the movie theaters or many of the production companies in violation of Monopoly law, they still maintain almost absolute control of distribution of content given their reach with theaters, “intellectual property war chests,” and “first-look” arrangements with filmmakers. Big studios are avid consumers of content rights. They buy up book rights, comic rights, rights to personal stories and even internet memes to name a few.
In turn, the studios can then exercise the option to produce the items which they acquired the rights to. Additionally, filmmakers can be independent, and acquire rights on their own, but usually contract with one of the majors for distribution and in many instances financing given their connection to major hedge funds.
Ultimately, because of content acquisition and mega-mergers, the content we consume to date is likely owned by one of six major media conglomerates:
1. Time Warner (Warner Bros., CNN, TNT, TBS, Cartoon Network, Tru TV)
4. NBC (NBC networks inc. MSNBC and CNBC, Vivendi, Universal, USA, Bravo, E!, Weather Channel [jointly owned w/ Bain Capital and the Blackstone Group], SyFy)
5. Fox (Fox Studios, Fox networks inc. Fox News, FX Channel)
6. CBS (Paramount, CBS Networks, CW)
As fast as content has been bought up in Capitalistic tendencies by these major conglomerates, a new content provider began to change the way consumers behaved in their consumption — The Internet.
Traditionally, one would need some connection to the above mentioned content providers to be able to become commercially successful as an artist. Today, the internet allows the means of the production to stem from the individual, who then self-markets via the internet through Social Media or otherwise. The Internet has become the democratizer of content distribution and consumption. Anyone could now make a video, song or artwork and put it out for people to see. Simple advertisements on a website could in turn provide capital for the producers of such content, all without the need for a traditional content provider taking a fee to act as a middle man.
And this internet economy does not stop with entertainment. Entertainment is but the best illustration of the phenomenon at work. For the first time in just about every instance, the people, not the corporations, owned the means of production and also distribution. This is ENTIRELY contrary to the traditional definition of Capitalism. In fact, perhaps its almost a truer definition of the term, in that content for consumption is actually privately owned by the individual.
Think of what this means going forward. Would we even need currency monitored by a Central Bank? BitCoin has shown we don’t. The Internet Economy is all about producing, distributing and sharing content. Bitcoin is a currency used to engage in such an economy without an intermediary like a Bank or traditional Capital. Of course, if there is no physical monetary system, there is no Capital. If there is no Capital, there is no Capitalism and if there is no Capitalism, the political power structure that seeks to verify Capitalism by way of Capital lobbying also ceases to exist as we know it.
Capitalism and the current political structure will fail, just as did the Luddites in their mission to preserve the Agrarian Economy. Change is inevitable, and it has rapidly started to occur over the past 25 years beginning with the mainstream use of the internet. Of course the traditional power structure has fought back by trying to regulate the internet through acquisition of content (a small share of companies own most major content sites and many successful producers of such content have struck deals with content providers). These companies in turn have lobbied government to try and control the internet, thus controlling the Internet Economy in traditional Capitalist zeal. But every time they try to do this, they fail because the Internet strikes back. The current body politic fails to represent the Millennial generation and the promoters of the Internet Economy.
We will eventually reach a post-currency economy, likely very soon, born out of debt crisis and political revolution as the people reject the current system out of necessity of survival. The 1% cannot continue to control a society that is post-Capitalistic. In fact, we will eventually reach a post-work, post-Capital society entirely due to rapid technological change, as advanced artificial intelligence will do all the work, leaving humans to learn, trade and promote social harmony without needing to work for Capital. Technological progress will be the great equalizer of humanity and humankind as value will be assigned to physical goods and services, not Capital — much like a bartering economy. Despite what every dystopian science fiction story, trapped by the current political and economic reality says, the future will be peaceful because we won’t be trapped by the present reality. A new reality will in turn come, a moment which will be known as Technological singularity — a point where human affairs as we know it will cease to exist in our lifetime; borne out of the Internet Economy: The Industrial Revolution of our era.