Jeremy Rifkin: The Future of the Economy is There for the Civil Sector to Claim

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Last Saturday, famed economist and political advisor Jeremy Rifkin was featured in the New York Times in an op-ed entitled “The Rise of Anti-Capitalism.” In it, he predicts that the nonprofit sector will become increasingly important in the world’s economic future as more and more of the way we do business is based on networks and automation and the “Internet of things.” In all of this, he says, the capitalist market will become a “niche player,” providing networking platforms in an increasingly collaborative economy.

This is far from Rifkin’s first such assertion about the primacy of the nonprofit sector. As the conclusion to his The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era (1995), he suggested that the vast majority of workers in the information age would be shoved to the margins of the economy and unless a new path were found, the “workerless society” would be marked by mass unemployment, widespread desperation, and social upheaval. At the time, he was derided for being overly pessimistic and for engaging in technological determinism. He wrote:  

“We are entering a new age of global markets and automated production. The road to a near-workerless economy is within sight. Whether that road leads to a safe haven or a terrible abyss will depend on how well civilization prepares for the post-market era that will follow on the heels of the Third Industrial Revolution. The end of work could spell a death sentence for civilization as we have come to know it. The end of work could also signal the beginning of a great social transformation, a rebirth of the human spirit. The future lies in our hands.”

Here is a recent blog post by Robert Charette revisiting Rifkin’s predictions, in case you were wondering about the accuracy of what he foresaw.

Rifkin believed even then that the nonprofit sector was and would be primary because it addressed culture and spirit and cooperative interaction but he charged that the sector inflicted itself or at least accepted an identity that profoundly underestimated its importance and primacy. In a 2001 interview with the Nonprofit Quarterly, Rifkin said, 

“We have taken this sector, which is the primary wellspring of human life, and we have marginalized it as if it deserves last place in our social priorities. Think about the language we currently use to describe this sector. In Europe, they call it non-governmental—not quite public, but dependent upon the government. And in the U.S. we colonize toward the commercial arena, so we call it nonprofit—not corporate, but dependent upon the corporate sector. A lot of the way we view ourselves is dependent on metaphors and language—we act out of these metaphors. We should get rid of nonprofit and non-governmental—these are colonial terms and attach us as subsidiary to the secondary institutions of market and government. We are the culture and that is primary.”

Rifkin predicted at that time that as there was less need for human capital in production, there would be more interest in and more of a premium put on things that we can only get from and with other humans—things that are tailored, local, of community, and valued-aligned and inspired.

Now, Rifkin appears even more certain that the civil sector or an organized social commons needs to take the lead in the reconstruction of a global economic future. He believes that the future of the economy promises what he terms “an Internet of Things” and “infrastructure that optimizes collaboration, universal access, and inclusion, all of which are critical to the creation of social capital and the ushering in of a sharing economy.” 

“The Internet of Things is a game-changing platform that enables an emerging collaborative commons to flourish alongside the capitalist market. This collaborative rather than capitalistic approach is about shared access rather than private ownership. For example, 1.7 million people globally are members of car-sharing services. A recent survey found that the number of vehicles owned by car-sharing participants decreased by half after joining the service, with members preferring access over ownership. Millions of people are using social media sites, redistribution networks, rentals and cooperatives to share not only cars but also homes, clothes, tools, toys and other items at low or near zero marginal cost. The sharing economy had projected revenues of $3.5 billion in 2013.

Nowhere is the zero marginal cost phenomenon having more impact than the labor market, where workerless factories and offices, virtual retailing, and automated logistics and transport networks are becoming more prevalent. Not surprisingly, the new employment opportunities lie in the collaborative commons in fields that tend to be nonprofit and strengthen social infrastructure—education, healthcare, aiding the poor, environmental restoration, child care and care for the elderly, the promotion of the arts and recreation. In the United States, the number of nonprofit organizations grew by approximately 25 percent between 2001 and 2011, from 1.3 million to 1.6 million, compared with profit-making enterprises, which grew by a mere one-half of 1 percent. In the United States, Canada, and Britain, employment in the nonprofit sector currently exceeds 10 percent of the work force.” 

Rifkin, however, points again to the image (and, sometimes, the self-image) of the sector “as a a parasite, dependent on government entitlements and private philanthropy.” This image does not, he asserts, meld with reality, and he references a study showing that “approximately 50 percent of the aggregate revenue of the nonprofit sectors of 34 countries comes from fees, while government support accounts for 36 percent of the revenues and private philanthropy for 14 percent.”

NPQ would love to hear readers’ thoughts on Rifkin’s vision. We were surprised, in light of the noise around social enterprise, to not see any discussion of the piece in domestic nonprofit and philanthropic circles to date, though there appears to be more overseas.—Ruth McCambridge

  • Richard Catherall

    This is a fascinating article, positive and radical. It could go further. To expect capitalism to change, but give the perception that the existing nonprofit sector can fill the gap “as is” or “as was” misses just as big a revolution that’s needed. Yes the sector is growing, but who is leading that growth? Much of the sector relies on the continued success of the old capitalist system to create wealth for transfer. I am not anti-charity, but I do believe it will play a different role in this century. The potential for leadership in the social economy will be driven by social entrepreneurs not fundraisers.

  • Steve Ross

    It strikes me that the role Rifkin describes as one the nonprofit sector ‘inflicted’ on itself compares well to the definition of ‘servant leadership’ as described by Robert Greenleaf, et al,.as in “the greatest among you will be servant of all”.

  • Lisa Machesky

    I find the argument about the zero marginalized cost society and the consequences for the labor market are dead on. I also believe that those within the nonprofit sector have done much to marginalize our power. However, I am a little skeptical about the opportunity for the nonprofit sector present in this new environment.

    Rifkin argues that the potential lies within the nonprofit sector because it ‘addressed culture and spirit and cooperative interaction.” I would argue that we would have to VALUE culture, spirit and cooperative interaction before it becomes a market driver. Our society does not value those things. Look at how we entertain ourselves, look at how we spend so much time alone, look at how we spend our money, look at how we have marginalized institutions devoted to the public good. All these things point to a smaller impact from the nonprofit sector even though I strongly believe that culture, spirit and cooperative interaction are the very things that make a meaningful life. I just feel that not enough people are like minded particularly those that will struggle in this new economic environment.

  • Sandra Gerdes

    I hope Rifkin is right, and I can see the wisdom in his vision. If we continue to focus all of our energy and resources on only those things that make economic sense, we will be morally, ethically, culturally bankrupt. As a society, we must change our focus and energy toward activities that build meaning and relationships.

  • Ricardo Millett

    Rifkin’s analysis is affirming and an inspiration to all of us who toil in the fields of ‘hope’. We do not have the benefit of national or international meta data indexes to calibrate return on our anti-racism, anti sexism, pro- environmental/sustainable agricultural work and the like. But it is good to know that there are economist with Rifkin’s credentials counting these beans for a predictable better future that could result from our work. Right/work on!

  • Alan Arthur

    Mr. Rifkin is sensible. We’ll see if he is prophetic. Time will tell whether we move towards health and success for our people and our country, or war, pain and poverty for a greater percentage. If we think and act rightly, there will come a time in which there is really no difference between for-profit and nonprofit. Each organized human endeavor will provide a service or product that is positive and needed by the community, or they will not be permitted to exist.

  • John Carlisle

    Is it not better to redefine nonprofit as non-investor profit? Otherwise there is a distortion about the need for surplus, and a lack of understanding of why being efficient is a fundamental responsibility of nonprofit managers. Using resources wisely while doing good work is the best way of growing this sector, and we can look to capitalist companies for some good examples, i.e. Interface, which in Holland for example, at its Scherpenzeel plant in the Netherlands, energy is now 100% renewable, water has been “virtually” eliminated from manufacturing processes, and zero waste is sent to landfill, according to Interface. In Europe overall, since 1996, the company has cut greenhouse gas emissions by 90% and water use by 95%. Innovations at Scherpenzeel include a switch to biogas (produced from rotting fish) and recirculation of water.
    If we embrace the best of the best in capitalism for social reasons, we may become that economic force that is wished for. So far, however, my experience of non-profits is that many do not make the best of the resources they have, disappointing employees and users.
    It is time that we ran good companies as the model and not just good intentions.

  • Sarah

    “Near workerless”? Oh please. Someone has got to fix your toilet and be your personal concierge, and pick those tomatoes. No, it’s still dependent on low-cost labor, which is why prices are so low – and why people can’t buy all of those “things” made in automated workplaces. Too many people are still buying into the myths of the free market and that people are paid what they are work (take a look at Robert Reich’s recent Salon article).

    And a “collaborative economy” means that the 1% can’t control it. Do you think they will give up their hold? Take one look at the spineless Minnesota Orchestra Board, led down the primrose path by two banksters.

  • Stephanie Meincke

    Mr. Rifkin’s comments are on the mark regarding the marginalization of the nonprofit sector in our society despite the healthy statistics he cites as well as the overwhelming self-evident contribution the nonprofit sector brings to our communities. I was shocked when someone said to me that, as a CEO of a small nonprofit, I was a social parasite because I lived off money that was intended for the common good. This is a dangerous perspective to hold as nonprofits are the last resort for those left behind by our capitalist system. And they are doing it with less government and corporate support and more social entrepreneurship. On the capitalist, for profit side, we have seen the emergence of new “benefit corporations” which blur the lines between profit and social good by allowing for profit companies to combine business motives and actions with social good needs. One thing is clear, nonprofits are a growing sector, and we will have to deal with the consequences of that growth and business will have to deal with us as a companion sector – the question is whether they will do so in a supportive or competitive way.

  • Alan Arthur

    I always laugh when someone automatically ascribes good management, efficiency and productive value to for-profit organizations and state that nonprofits don’t have any of that. I wonder which for-profit organizations they are thinking of: Enron? Merrill Lynch? AIG? Arthur Andersen? Goldman Sachs? Or the 80% of private businesses that go out of business within their first five years?
    And I laugh equally loudly when I’m told that nonprofits largely suck at the teats of government, and therefore don’t provide any economic or social value. People who say that are almost always among those with the biggest government housing subsidy in the country: the mortgage interest deduction. But, of course, when it’s for them, they don’t count it as a subsidy.
    The reality is that different folks, including government and private contributors, buy the services and products nonprofits provide. Just as in the “commercial” marketplace, those buyers decide whether they are of value to them.
    And just as in every single human entity and endeavor – including the Walmarts, Targets, Googles and Whole Foods – being more efficient is always possible.