Post Capitalism and the Edge Economy
From Zanecorpwiki
Modern Capitalism assumes--both simplicity and explicitly--that capital requirements are proportional to market engagement. In other words, that significant engagement with the markets requires significant capital and large scale engagement requires tremendous capital.
For much of the economy, this is still true. If we look at new business--at the leading edge of the economy--where ventures are simultaneously most novel, most risky, and (when successful) most profitable, we find that the old assumptions regarding capital requirements no longer hold true.
Computers and digital technologies are the driving force behind the plummet in production costs in these areas. Commodities, the inputs into the leading edge, are still very much subject to classical Capitalist assumptions. It takes a lot of money to efficiently produce gas, textiles, silicon chips, etc. The developments at the edge are very much reliant and built upon the Capitalist market.
Yet the edge itself is typified by affordability of the one off. Very often, there aren't even significant economies of scale to be had. The supply side often lacks any significant economies of scale, but it really doesn't matter. The consumer side tends to fragment before any significant scale (in the classical sense) can be reached, for as the cost of small scare production plummets, more producers enter in order to supply increasingly narrow niches and all at a healthy profit.
The large profit margins are themselves a hallmark of the edge economy in particular, and not post capitalism in general. We can expect that as the current edge economies mature and become mainstream, that profit margins will decrease. This is a direct result of the reduction of risk that naturally occurs as markets mature.
What is interesting, however, is that the risk is of a very different nature in-so-far as it is almost a pure risk of success with relatively little economic/financial penalty for failure. This is a direct result of the nature of the post capitalist markets in-so-far as if there is little capital needed to start and run the business, then there is little to lose.
This is not to say that failed business is no longer devastating to the founder(s), but what is more significant is that individuals--even those with limited resources--can and do start significant businesses on their own. I would suspect that individually, failure is likely as devastating as it always was, so the primary advantage is not reduction in financial risk per se, but that the bar of financial risk has been lowered to the point that many more would be entrepreneurs can meet it.
For wealthier actors, there is theoretically reduction in relative financial risk, though in practice wealthy actors have a stake in the status quo, and are proportionally not as well represented at the edge. Over time, one would expect these demographics to change and as edge businesses move into the mainstream, the wealthy will be able to become even more wealth while risking even less of their wealth (yay). What's more important from a societal perspective, however, is that the middle class entrepreneur will be even that much more able to engage in business as the risk of failure continues to decrease.
