:00:00. > :00:00.congregation to remember him not with violence but with peace.
:00:00. > :00:16.Now on BBC News, it's time for HARDtalk. Welcome to HARDtalk.
:00:17. > :00:22.Today, I want you to imagine living in a radically different world. An
:00:23. > :00:25.internet`driven smart world where individuals and communities generate
:00:26. > :00:28.their own free energy, reduce and share the things they need and build
:00:29. > :00:36.an economy defined by collaboration and not competition. `` produce and
:00:37. > :00:39.share. According to my guest today, Jeremy Rifkin, this is no utopian
:00:40. > :01:16.fantasy but the unfolding story of the next century. Are we really
:01:17. > :01:19.entering the postcapitalist age? Jeremy Rifkin, welcome.
:01:20. > :01:23.You have long been a man of big ideas and it seems to me that your
:01:24. > :01:25.big idea is now that the internet and digital technology have sowed
:01:26. > :01:33.the seeds of capitalism's demise. Have I got that right?
:01:34. > :01:36.You have. We are beginning to see the outlines of a new economic
:01:37. > :01:43.system entering into the world stage.
:01:44. > :01:58.Let me stop you there. I need you to explain the concept of the
:01:59. > :02:01.collaborative commons. It is a new way of characterising the new
:02:02. > :02:03.economic model where we produce and share goods with each other,
:02:04. > :02:06.bypassing the traditional capitalist market. This is the first new
:02:07. > :02:09.economic system since the advent of capitalism and socialism in the
:02:10. > :02:11.early 19th century. It is a remarkable historical event that
:02:12. > :02:17.will have long`term implications on the way we live and work and
:02:18. > :02:26.organise life. What is interesting is what is precipitating it.
:02:27. > :02:29.You say you're not some kind of ideological warrior who wants to see
:02:30. > :02:32.capitalism collapse but a man who looks at the way that the digital
:02:33. > :03:02.technology is impacting our world and believes that it is inevitable.
:03:03. > :03:05.That is what I want you to explain. Zero marginal cost is a good or
:03:06. > :03:22.service after the growth has been accounted for. Ther eis a pradox
:03:23. > :03:26.that is responsible for the success of the hand of the market. What is
:03:27. > :03:28.that paradox? Now, here it is. Sellers are always looking for more
:03:29. > :03:33.technology that can reduce their marginal cost so that can win over
:03:34. > :03:36.market share and consumers. The idea is to be more competitive and at
:03:37. > :03:40.better prices, but that maintains itself today. Capitalism seems to be
:03:41. > :03:45.functioning today. Parts of it are changing radically.
:03:46. > :03:48.What businesspeople did not expect was a productivity revolution so
:03:49. > :03:50.powerful that it could make goods and services eventually free,
:03:51. > :04:01.priceless and abundant and no longer subject to the exchange economy.
:04:02. > :04:04.That is already beginning to happen. Over the last 15 years with the
:04:05. > :04:21.internet, we have seen millions and hundreds of millions of consumers
:04:22. > :04:24.become pro`sumers. Producing and sharing their own information goods.
:04:25. > :04:26.It started with music bypassing the recording industry and then we began
:04:27. > :04:30.to share knowledge on Wikipedia, then news blogs and eventually young
:04:31. > :04:33.people began to put out e`books for free, and what this has done to the
:04:34. > :04:38.information industry is devastated it. The recording industry has gone
:04:39. > :04:41.down, newspapers and magazines are going out of business and the
:04:42. > :04:50.publishing industry is in trouble because of zero marginal costs.
:04:51. > :05:03.I do see what you're saying but here is my counter argument. What we have
:05:04. > :05:05.seen in the information fields is that many of the old established
:05:06. > :05:09.corporates have indeed suffered and you would say that that is a sign
:05:10. > :05:12.that capitalism is eating itself. But I would say that, on the
:05:13. > :05:15.contrary, there are signs that it is extraordinarily resilient as we have
:05:16. > :05:19.seen the emergence of new successful business models, whether it is
:05:20. > :05:27.Google or Facebook or music apps. There are new ways to make money in
:05:28. > :05:32.the internet age. Some of these enterprises are capitalist and some
:05:33. > :05:35.of them are hybrids or nonprofits. There is a bed and breakfast app
:05:36. > :05:37.called AirBnB in which, a marketplace for accommodation is
:05:38. > :05:52.used online to attract people to come and stay. They are not
:05:53. > :06:03.professionals but they can make money through a room in their house.
:06:04. > :06:08.This is now said to be worth $9 billion or $10 billion. What is
:06:09. > :06:11.interesting about it is that it has become successful as they set up a
:06:12. > :06:19.website that is now near zero marginal cost. For the people who
:06:20. > :06:22.want to rent out their rooms and apartments, they are already paying
:06:23. > :06:26.a mortgage or a rent and it is a zero marginal cost for them to rent
:06:27. > :06:28.out space to a visitor and this website alone, in New York has
:06:29. > :06:41.resulted in hotel night stays dramatically reduced.
:06:42. > :06:43.But your overall thesis is that this long`term shift in economic
:06:44. > :06:52.modelling is killing capitalism, but my counter argument is that it is
:06:53. > :07:01.creating new forms of capitalism. For the AirBnB example, it is new
:07:02. > :07:05.capitalism. They not giving it away for free.
:07:06. > :07:08.Do you know what couch surfing is? It is totally nonprofit and they
:07:09. > :07:17.have millions and millions of people who are sharing spaces for free.
:07:18. > :07:21.What we are seeing is a combination and hybrid, part capitalist and part
:07:22. > :07:28.free market. Let's slow down a minute and talk about the context.
:07:29. > :07:31.We have seen hundreds of millions of people sharing their own information
:07:32. > :07:39.at a zero marginal cost, you cannot deny it. `` information goods.
:07:40. > :07:44.Videos on YouTube, information news blogs...
:07:45. > :07:54.I am just arguing that it is not the demise of capitalism. If you look at
:07:55. > :07:58.news organisations, many sell fewer copies of newspapers than they used
:07:59. > :08:10.to but they are monetizing in other ways. Paywalls and firewalls. You
:08:11. > :08:18.are in the media and you will appreciate this. For a long time
:08:19. > :08:21.industry analysts have thought that there would be an opportunity for
:08:22. > :08:26.capitalism to take new out new "freemiums". For example, a musician
:08:27. > :08:30.will say that he will give out his music for free and people will come
:08:31. > :08:33.to his concert because they like his music or someone will say to the New
:08:34. > :08:38.York Times that they will give them free articles and then they will
:08:39. > :08:41.have to subscribe if they want more. There have been new opportunities
:08:42. > :08:44.but it is a smaller and smaller market because as new information
:08:45. > :08:47.becomes free, less people have the time and inclination to buy it. I
:08:48. > :08:52.just wonder if Google and Eric Schmidt will buy into your notion.
:08:53. > :08:55.There are companies that are able to become an enormous giant but there
:08:56. > :08:58.are people who are producing and sharing for free and that is
:08:59. > :09:01.undeniable. You have laid out what you believe
:09:02. > :09:07.we can learn from the last decade, but you go further. You seem to be
:09:08. > :09:11.saying that all forms of tangible goods production are going to go the
:09:12. > :09:23.same way, and become much closer to free. The marginal cost will go down
:09:24. > :09:25.and in the end, there will be no incentive for companies to safeguard
:09:26. > :09:34.what they produce and it will all become collaborative and I do not
:09:35. > :09:44.buy it. Economists have said that there is a
:09:45. > :09:47.firewall here. Free content has changed the information industry.
:09:48. > :09:50.They've said, will not see a zero marginal cost go from the virtual
:09:51. > :09:53.world to the physical world, but that is no longer the case. A new
:09:54. > :10:04.technology revolution is emerging, within the last two years and it is
:10:05. > :10:18.expanding. An expanded internet. The internet of things. It has allowed
:10:19. > :10:20.us to expand and converge with emerging energy internet and
:10:21. > :10:24.fledging logistics internet, three in one, a super internet of things
:10:25. > :10:32.and sensors are now being connected across those feeding information to
:10:33. > :10:35.those three. Resource flows, factory floors, the electricity grid,
:10:36. > :10:51.vehicles. They are all connected and feeding information back into those
:10:52. > :10:55.three. What does this mean? If we keep network neutrality as we have
:10:56. > :10:58.now, it means that you and I and 40% of the human race can go up on this
:10:59. > :11:02.internet of things, some are already doing it, and you can mine this big
:11:03. > :11:05.data that is coming through the system and determine your own
:11:06. > :11:07.algorithms and you can increase your own productivity, reduce your
:11:08. > :11:10.marginal costs and create your own energy and your own 3D printed
:11:11. > :11:14.products, heading to near zero marginal cost. I can tell you that
:11:15. > :11:22.this is happening and I can tell you where. Millions of people are
:11:23. > :11:30.engaged in it. It is real. You seem to have abandoned any
:11:31. > :11:33.notion of patent or copyright law. You cannot go onto the internet and
:11:34. > :11:38.bring down exclusive innovations produced by millions or billions of
:11:39. > :11:59.dollars from the corporate sector... I have to give you some education.
:12:00. > :12:02.Let's take 3D printers. We have hobbyists and start ups and now
:12:03. > :12:05.school systems that are putting 3D printers into place, which means
:12:06. > :12:10.that anyone can take free software, almost all of it is free... The
:12:11. > :12:19.important stuff isn't free... You didn't let me finish... You don't
:12:20. > :12:27.know what the thought is. We have a lot to get through. Here is what I
:12:28. > :12:37.am thinking. Take the pharmaceutical industry. Hugely important to all of
:12:38. > :12:40.us and our healthcare. You are suggesting that you can, one day, go
:12:41. > :12:43.onto the internet and discover a recipe for an important drug and
:12:44. > :12:53.make it yourself with materials that you can buy. Who would need
:12:54. > :12:58.pharmaceutical companies anymore? We would get no new drugs because there
:12:59. > :13:01.would be no innovation. 3D printed products, thousands of people are
:13:02. > :13:05.doing it, most of the software is free, you can print out your own
:13:06. > :13:08.products and they are using recycled plastic and paper almost at no cost
:13:09. > :13:14.and when they produce it, they are using their own renewable energy to
:13:15. > :13:21.do it. Let's look at energy. It is really specific so give me a few
:13:22. > :13:23.seconds. We have millions and millions of people, small
:13:24. > :13:26.businesses, homeowners and co`ops who are literally producing their
:13:27. > :13:43.own solar and green energy at near zero marginal costs. The technology
:13:44. > :13:46.costs money but the moment it is out there on your property, the actual
:13:47. > :13:53.marginal cost is free. The sunshine is free and your property is free.
:13:54. > :13:56.Geothermal energy is free. Do we have millions of people who are
:13:57. > :13:57.bypassing the fossil fuel industry and producing their zero marginal
:13:58. > :14:11.cost energy right now? Do we have millions of people who
:14:12. > :14:14.are bypassing the fossil fuel industry and producing their zero
:14:15. > :14:16.marginal cost energy right now? I'm just wondering at what point you
:14:17. > :14:20.lost touch with reality in the energy field? I'm talking about the
:14:21. > :14:23.fact that all of us can become our own energy producers. Who needs the
:14:24. > :14:26.big energy companies anymore? But do you not look around and see what is
:14:27. > :14:29.happening in the energy market today? That actually fossil fuels
:14:30. > :14:32.have made a remarkable comeback? That governments all over the world,
:14:33. > :14:35.and peoples all over the world, appear to be becoming more reliant
:14:36. > :14:37.on fracking, shale gas, shale oil, carbon`based fuels, than ever
:14:38. > :14:40.before, even though you have been preaching this message for the past
:14:41. > :14:43.decade? That's the past, you're living in the 20th century. That is
:14:44. > :14:46.not happening. I'm living in the present. The Chinese just made a big
:14:47. > :14:50.decision... You just put yourself in a big hole. Let me stop right there.
:14:51. > :14:56.You know I have advised Germany over the years. And right now they have
:14:57. > :15:01.an energy crisis. No, here is the crisis. We have 25% green energy on
:15:02. > :15:07.the grid in Germany. We are heading to 35% in 2020. It is being produced
:15:08. > :15:12.at near`zero marginal cost. Here is the crisis. The wholesale prices
:15:13. > :15:15.have gone way down. But the retail prices have gone up because they are
:15:16. > :15:23.passing the tariff on to the ratepayers. When they get over that
:15:24. > :15:29.hump, free electricity. I will not let you go with China. With China,
:15:30. > :15:36.talking about the Chinese leadership, I talked to them in
:15:37. > :15:40.September. I have just been in China. They are looking at shale gas
:15:41. > :15:48.in a whole new way. They say they cannot afford to be out of fossil
:15:49. > :15:51.fuel. I just met with the Chinese leadership. They instructed the
:15:52. > :15:53.Federal Government to begin looking into this transition to this
:15:54. > :15:56.Internet of Things, a third industrial revolution. I met with
:15:57. > :15:59.the Chinese leadership in September, and ten weeks after I was there, the
:16:00. > :16:02.Chinese government announced an $80 billion plan for four years to begin
:16:03. > :16:05.laying out the energy Internet, so millions of Chinese could produce
:16:06. > :16:17.their own solar and wind locally at near`zero marginal cost. That is
:16:18. > :16:22.reality. The other reality is they are going down the nuclear path as
:16:23. > :16:25.well. We are in a transition. It is never either/or. We are in a
:16:26. > :16:29.transition from the second to the third technology eras. I'm talking
:16:30. > :16:34.about the beginning of something which will merge us into a new
:16:35. > :16:38.economy. Not the ending. You're an economist, as well is a
:16:39. > :16:41.futurologist. I wonder at what point your role as a futurologist allows
:16:42. > :16:50.you to gloss over the realities of the 21st century which don't fit
:16:51. > :16:54.with your theory? For example, I was with you at a conference a couple of
:16:55. > :16:57.years ago in Brussels all about the commitment to create what they call
:16:58. > :17:00.the European Super Grid, the smart energy grid which would allow
:17:01. > :17:02.renewables to feed in from southern Europe, solar from northern Europe,
:17:03. > :17:14.wind, to create an overwhelmingly powerful energy grid for Europe. You
:17:15. > :17:17.said it had to happen. What have we seen in the last year? Investment
:17:18. > :17:23.across Europe in energy infrastructure has been cut by
:17:24. > :17:28.almost 50%. Although it has been cut, the on`the`ground experience is
:17:29. > :17:32.very different. I am not a futurologist, I am a theorist. We
:17:33. > :17:36.are a global consulting company. We are laying out infrastructure in
:17:37. > :17:39.regions of Europe now. In the north of France, my global team of
:17:40. > :17:46.companies have come into the area and are working with the region to
:17:47. > :17:49.lay down this. When you say it is fairy tale, come and visit the
:17:50. > :17:55.regions where we are actually laying this down. I would invite you to
:17:56. > :17:59.come and see it. Invitation accepted, I look forward to seeing
:18:00. > :18:02.it. In the meantime I want to get more philosophical. You have talked
:18:03. > :18:04.about the energy grid, 3D printers, smart production, and how things
:18:05. > :18:13.will become more abundant and close to free. Not everything. Energy,
:18:14. > :18:18.yes. Many products we use, yes. When it comes to food and water, that is
:18:19. > :18:23.the real problem. They seem quite important. That is the problem,
:18:24. > :18:26.because of climate change. It is affecting the water cycle, meaning
:18:27. > :18:35.more floods, droughts, and a loss in yield. This could be the trigger
:18:36. > :18:38.that stops this process now. This ubiquitous Internet of things I am
:18:39. > :18:40.talking about, this third Industrial Revolution, this transformation of
:18:41. > :18:44.collaborative commons, is probably the only way we will be able to
:18:45. > :18:50.address climate change, it gets us off fossil fuels and uses less
:18:51. > :18:55.resources. Let me explain, because this is a new idea. People ask how
:18:56. > :19:00.we can be sustainable. We are using more resources, and we now have CO2,
:19:01. > :19:05.creating climate change. Near`zero marginal cost is the ultimate metric
:19:06. > :19:08.of sustainability. Because if you can produce information and goods
:19:09. > :19:14.and services at zero marginal cost, you are using the least energy to do
:19:15. > :19:16.it. If we can move to extreme productivity, near`zero marginal
:19:17. > :19:22.cost, it will be able to produce sufficient energy goods with very
:19:23. > :19:27.little of the earth's resources. Surely that is a good journey to be
:19:28. > :19:35.on. It is a fascinating idea of a journey. It is not an idea. We are
:19:36. > :19:40.doing it in Germany, Denmark... They are trying. But the point is this.
:19:41. > :19:43.You have acknowledged what was about to be my point about the strain on
:19:44. > :19:46.finite resources, including food and water. You have acknowledged that
:19:47. > :19:49.may be a problem. Here is something you haven't even addressed yet. And
:19:50. > :19:54.that doesn't feature in your economic analysis. That is pure
:19:55. > :19:56.human nature. When you talk about the collaborative commons, and the
:19:57. > :19:59.shift from competition and ring`fencing and private ownership
:20:00. > :20:02.to sharing, and cooperation, it seems to me you fly in the face of
:20:03. > :20:15.what we have learnt over many centuries of basic human nature. You
:20:16. > :20:19.have to read the book. The Zero Marginal Cost Society, I have a huge
:20:20. > :20:23.section of the book, give me a little time to talk about it. I
:20:24. > :20:26.haven't quite finished my questions. Tell me why the instincts we have as
:20:27. > :20:32.human beings, many of which are about competition, will not
:20:33. > :20:35.undermine the collaborative commons. There is an old tradition. The
:20:36. > :20:39.modern capitalist marketplace is about competition, but we are social
:20:40. > :20:42.creatures. And throughout most of history, people have cooperated and
:20:43. > :20:51.collaborated to share their goods and services. Even today, let me at
:20:52. > :21:00.least try to answer. Let me at least answer one. We have... Everyone
:21:01. > :21:03.thinks there is only the private marketplace and the government, no
:21:04. > :21:08.other way to manage the economy. There is another whole sector called
:21:09. > :21:10.the social commons. Millions of organisations in the nonprofit
:21:11. > :21:14.sector, which produce and share goods and services we desperately
:21:15. > :21:17.need. Education, healthcare, all sorts of services which have nothing
:21:18. > :21:20.to do with the profit motive. This is a huge sector, growing faster
:21:21. > :21:26.than the private market sector for 20 years. In your own country 10% of
:21:27. > :21:31.the GDP in the UK and US is now in the sector. What happens to
:21:32. > :21:34.selfishness and greed? What happens is you take a look at what is going
:21:35. > :21:37.on with the millennial generation, the young people, they are seeing
:21:38. > :21:39.their entrepreneurial spirit best advanced by being entrenched in
:21:40. > :21:44.these massive networks where they benefit the network and benefit
:21:45. > :21:47.themselves. Why are so many young people sharing free software?
:21:48. > :21:51.Sharing their music? Sharing cars, sharing all sorts of things that our
:21:52. > :21:55.generation never did? Because ownership is not as important to
:21:56. > :21:57.them as access. They want to be involved in networks where they can
:21:58. > :22:04.be social entrepreneurs, not just traditional business entrepreneurs.
:22:05. > :22:08.I don't deny these trends. It would be insane to do that. But I see that
:22:09. > :22:12.around the developed world, as well is developing, inequality is on the
:22:13. > :22:17.rise. And the idea that everybody is now more collaborative and more
:22:18. > :22:21.sharing, just doesn't seem to fit. The reason this is happening is
:22:22. > :22:25.because inequality is on the rise. As we move to the last stages of
:22:26. > :22:27.this capitalist era, it will still be capitalist. It will not
:22:28. > :22:30.disappear. But as the dominant system, what we see? After two
:22:31. > :22:32.Industrial Revolution through the 19th and 20th century, we have
:22:33. > :22:37.organised vertically integrated corporations. And the 500 largest
:22:38. > :22:42.companies in the world today, the Fortune 500, their revenues equal
:22:43. > :22:45.one third of the GDP of the planet. 65 richest individuals in the world,
:22:46. > :22:50.their wealth now equal to 3.5 billion poorest people, half the
:22:51. > :22:56.human population. You want to continue with that economic system?
:22:57. > :23:01.I'm curious. What's your answer? Would you like to continue... I need
:23:02. > :23:05.an answer. My question, and we are almost out of time. I want a new
:23:06. > :23:08.economic journey, allowing our better instinct to flower and a
:23:09. > :23:12.collaborative journey on this collaborative commons. We know that
:23:13. > :23:15.young people are beginning to do it. We should be hopeful, and we should,
:23:16. > :23:19.rather than say it can't be done, and nothing can be changed, we are
:23:20. > :23:25.going to continue to have fewer jobs and more climate change, that is not
:23:26. > :23:28.a good journey. You make a great play of the facts which you have
:23:29. > :23:31.advised senior leaders of the European Union, the United States
:23:32. > :23:39.and China, but isn't the truth that they see you as an interesting
:23:40. > :23:41.idealist but not a realist. I don't think so, because they are
:23:42. > :23:48.developing the plans I have outlined. The formal plan of the EU
:23:49. > :23:52.is endorsed by the Parliament and is working its way through the European
:23:53. > :23:58.Commission. It is in their 2030 and 2050 plan. Those ideals are for them
:23:59. > :24:02.to generate. They are still ideals. No, regions are developing parts of
:24:03. > :24:09.this right now. That is not fair, Stephen. You are giving your
:24:10. > :24:12.audience and unfair picture of Europe. Europe is far ahead on
:24:13. > :24:16.moving toward sustainability plans. Would I like it to be doing more,
:24:17. > :24:19.quicker, yes. We have to end there. We will come back and chew it over
:24:20. > :24:43.again. Jeremy Rifkin, thank you for joining HARDtalk.
:24:44. > :24:51.Good morning. We saw some big contrast around the UK on Monday.
:24:52. > :24:55.Scotland had the best of the weather. Lots of sunshine in the
:24:56. > :25:00.north`west. 19 degrees on the Isle of Skye. In the Midlands, 13 degrees
:25:01. > :25:01.in Nottingham. The rain