From neoliberalism to technological neosocialism

The Fourth Industrial Revolution would bring about an open-market technological socialism, which, instead of seeking a large government based on a charismatic leader, would be based on a decentralized model.

The advent of the First Industrial Revolution brought the steam engine, which greatly increased production, while the Second Industrial Revolution introduced gasoline engines and electricity, paving the way for mass production. This significant increase in production led to the emergence of Neoliberalism in the early 1930s, a capitalist political and economic movement that supports free markets, as well as a reduced state with minimal intervention in the economy. Despite the Cold War of the 20th century, which was more of an ideological, political, and economic struggle between Capitalism primarily supported by the US and England, and Socialism promoted by the Soviet Union, Cuba, and China, the dominant model was primarily Neoliberalism. However, this capitalist model has been so productive that it could be laying the groundwork for a Neosocialism, for these 6 reasons:

1. Society of zero marginal cost: In his book "The Zero Marginal Cost Society," Wharton professor Jeremy Rifkin analyzes how capitalism, with the enormous technological advancements of the first and second industrial revolutions, propelled a third industrial revolution with the advent of electronics and information technologies (Internet and computers). This has allowed many elements to become software, such as music, books, GPS, among other technologies that can now fit into a smartphone and have zero replicating costs. This zero marginal cost has led to the emergence of new economic models where free services become part of the business model, with examples like Google, YouTube, Wikipedia, Twitter, where billions of users can access these services without paying. The interesting thing about the Internet and the services it offers is that Google is the same for the child of an indigenous person in Guerrero as it is for the child of a billionaire in New York; in other words, the Internet does not distinguish between social or cultural classes. With the so-called Fourth Industrial Revolution, which brings technologies that grow exponentially like Artificial Intelligence, 3D printers, robots, blockchain, solar energy, biotechnology, nanotechnology, virtual reality, augmented reality, among others, it is expected that the marginal costs of products will become increasingly lower. According to 3D Systems CEO and president Avi Reichental, "We are close to an era where a 3D printer can print another 3D printer." This is the paradox of capitalism, which, being so productive, can transform the world into a neo-social world where products are so cheap that they are available abundantly, as products like music, newspapers, books, and software are today. The interesting thing to analyze here will be how investors react to the possibility that their investments tend to have a marginal cost of zero and have to operate in a free or near-zero-cost model, in addition to the cost of the free where users are the product by providing access to their personal data. This could lead us to a world like the one Gandhi envisioned where instead of mass production, we have production by the masses.

2. Obsolete jobs: According to a study by the University of Oxford, 48% of current jobs in the United States are at high risk of becoming obsolete by 2025. Technologies such as autonomous cars put at high risk one of the world's largest sources of employment, transportation. This phenomenon of obsolete jobs, which we can see in many areas of the economy affecting both blue-collar and white-collar workers, has been the main focus of very important events such as the World Economic Forum. While there are people like the famous futurist Ray Kurzweil who talk about the emergence of new jobs, as happened in the first and second industrial revolutions with jobs that became obsolete, the difference now is that the transition to new jobs was a process that took several generations, and now a single generation will have to experience the transition due to the enormous technological advancements. This has led countries like Canada, Finland, and cities like San Francisco to begin testing a "Universal Basic Income," paying a salary to randomly selected citizens, enough to cover their needs and still motivate them to be productive. On the other hand, Bill Gates proposes to tax robots that take away jobs to cover the tax that these employees will no longer pay and to counteract the effect on people who lose their jobs because their source of employment becomes obsolete.

3. Economic inequality: Capitalism, like any economic and political model, has its advantages and disadvantages. According to Bill Gates, in 15 years, we can eliminate extreme poverty, and today, around 57% of the population in Mexico has internet access, and globally it's around 50%. But with exponential growth, it is expected that between 2020 and 2025, 100% of the world's population will have internet access, which will transform even the lives of the poorest people by giving them access to education and services that were previously impossible to access. However, according to "The Guardian," 50% of the world's wealth is currently in the hands of 1%. In a world where technology grows exponentially and a person with knowledge and capital can sell to the whole world, the gap of inequality between rich and poor will be much greater between those who manage to join and take advantage of the advances of the Fourth Industrial Revolution and those who do not adapt. This will lead society and politicians to reconsider increasing taxes on the richest, although there will undoubtedly be resistance from the richest to give their money to the government, considering themselves more productive in supporting society than the government.

4. Network effect: One of the main characteristics of Information Technologies is the network effect it produces, where a service or technology becomes better as more people join it, for example, Twitter or Facebook would be very boring if there was only one user. The value of these networks grows exponentially with each person who joins the network, as it adds value to communication options among users. This network effect combined with the zero marginal cost of services makes companies prefer to provide access to their technology for free, monetizing from their data or advertising. According to Singularity University, considered the world's largest think tank on technological advancements and their impact on society, there are already smartphones for less than $50 today, and we are very close to an era where companies will be willing to give away technology since otherwise they cannot sell to you or use your valuable information to sell to a third party. It is very important to take care of technological monopolies, something we have seen with Microsoft, Google, Uber, Facebook, etc., where the winning company tends to win in a monopolistic way, with the ability to take unethical measures to increase their income. There will undoubtedly be a need for a state to regulate these monopolies for the benefit of the common good.

5. China as the leading economic power: In recent decades, the Chinese economy has experienced significant growth, positioning the Asian giant as the second-largest economy in the world. With growth rates exceeding 6%, while the US economy has grown by around 2%. While China still has much to do internally to address several of the social problems of its 1.3 billion inhabitants before turning too much to look at the world. Its economic growth, its great military and technological advances, in addition to its population four times larger than that of the United States, make it highly likely that China will become the world's most important economy by around 2025. The interesting thing about this is that unlike the United States, which has a capitalist economic model, China is a country with an Open Market Socialist economic model. This will influence towards a Neosocialism because the world's leading economies in history have left a social, cultural, and economic contribution to the world. Soccer, the world's most popular sport, emerged when England was the world's leading power, and the United States has made significant contributions to the world such as Hollywood, Silicon Valley, among many cultural and technological innovations.

6. Breakdown of nation-states: Governments have had a monopoly on money and force. However, with the arrival of Bitcoin, we begin to see a divorce between money and a government that generates and regulates money. Although we are still only in the initial stage of learning about technologies like Bitcoin and Blockchain, it is evident that these technologies have the potential to transform the way we organize ourselves as a society, making the concept of borders between countries irrelevant through digital means. When I speak of Neosocialism, I do not refer at all to failed models where popular leaders promise social equality while enriching themselves at the expense of their people, attacking freedom of expression, removing private property, or creating larger governments. The Neosocialism we will see is an Open Market Technological Socialism, which, instead of seeking a large government based on a charismatic leader, is based on a decentralized model that is corruption-proof with technologies like blockchain and the open-source model, where there is much transparency and greater benefit for all.

What would Adam Smith think if he knew this era and saw that one of the world's largest companies, Google, offers most of its services for free? Or what would Marx think when he sees the enormous economic difference between 1% of the population and the others, but on the other hand, the possibility of eliminating extreme poverty in 15 years? Neoliberalism could come to an end with the Fourth Industrial Revolution, and today more than ever, we are social and empathetic individuals with the world thanks to technologies like Facebook, WhatsApp, Twitter, among others. This makes me think, will the Fourth Industrial Revolution bring us Neosocialism?