File 029356
Economic Policy and Capitalist Theory in the Information Age (File 029356)
An academic analysis examining the contradictions of capitalist economic theory in the context of near-zero marginal cost technologies and the information economy, discussing perspectives from prominent economists during the Clinton administration.
Summary
The document discusses the inherent contradictions in capitalist economic theory, particularly the catch-22 created by technological advancement toward near-zero marginal cost economies. It references observations by Lange and Keynes from eighty years prior, then analyzes contemporary economic concerns raised by Lawrence Summers and J. Bradford DeLong in a 2001 Federal Reserve symposium. The paper examines how new information technologies and the emerging Internet were threatening to undermine traditional capitalist market mechanisms in the early 21st century.
...b& ILl V IOWA, 1.1.1.141 Li a111. 1.11.4.1. if 111.5 1.11., 1110,1economy of near zero marginal cost and the prospect of nearly free goodsand services. This catch-22 is the inherent contradiction that underliescapitalist theory and practice.Eighty years after Lange and Keynes made their observations, con-temporary economists are once again peering into the contradictory work-ings of the capitalist system, unsure of how to make the market economyfunction without self-destructing in the wake of.new technologies that arespeeding society into a near zero marginal cost e.Lawrence Summers, U.S. secretary of the treasury during PresidentBill Clinton's administration and former president of Harvard University,and J. Bradford DeLong, a professor of economics at the University of Cal-ifornia, Berkeley, revisited the capitalist dilemma in a joint paper deliveredat the Federal Reserve Bank of Kansas City's symposium, "Economic Pol-icy for the Information Economy," in August 2001. This time, there wasmuch more at stake as the new information technologies and the incipientInternet communication revolution were threatening to take the capitalistsystem to a near zero marginal cost reality in the coming decades.