Postcapitalism: A Guide to Our Future

But this isn’t about running costs, it’s about theoretical costs of production of individual units.

If you have a machine that can make 100 lightbulbs for $100, the production cost of each lightbulb is one dollar, regardless of the cost of actually using those lightbulbs. If the same machine could produce 100 billion of those lightbulbs for the same cost, the cost of production is so near-zero as to be effectively zero. It doesn’t matter that those lightbulbs still cost money to use, they cost nothing to produce and therefore hold no economic value in a Marxist sense, beyond what you can convince people to pay for them.

These are extreme examples meant to demonstrate an underlying idea, which is that as a society generates more and more of its products with methods that gradually approach zero production cost, the idea of an object holding value because it cost X amount of labour and Y amount of resources (the basis of economics of scarcity) begins to apply less and less. Information has no inherent reproduction cost; it doesn’t cost me any more if I’m watching a movie on my PC or uploading it to a thousand people via bittorrent in the same time period because my PC is still switched on. Similarly, if you fire one bullet or a million bullets in the same timeframe in the hypothetical game, it makes no difference in terms of the running costs of the game and the bullets have a production cost of zero.

As labour is replaced by automation and as production techniques get better, the idea of scarcity (I.E. the idea that there are only a finite amount of man hours to produce goods, and a finite amount of resources, which in turn take man hours to gather) becomes less and less relevant.

Obviously, that doesn’t scale down to zero overnight, but you can see the effect in the price of goods over the last century. This is especially true in the case of information. How much would a resource like Wikipedia have cost to produce in 1900, and how much do you think it would have fetched as a non-replicable physical good on the open market? The reason it can be offered for nothing is that each page impression costs effectively nothing to send to you; Wikipedia has running costs, such as electricity, hosting and bandwidth, but the cost of reproducing the page you are looking at is effectively zero.