by: Ilya Vedrashko

under the layers of acquired historical meanings lies an often
overlooked core of the economic theory that describes production of
goods under public ownership, their free exchange, and their free
consumption by all members of the society according to their needs.
This economic theory is communism, and the idea that Chris Anderson outlines in the latest Wired cover story and in his upcoming book is strikingly similar.

is already remarkable how much vocabulary is shared between "socialism"
and "social media". One definition of socialism refers to a system
under which "community members own all property, resources, and the
means of production, and control the distribution of goods" (source),
which also captures the spirit of economic relationships in most of the
current social media environments. In his most recent book, The Long Tail, Anderson pays a fair amount of attention to those relationships, which are largely non-monetary in nature.

current argument is that under the rapid pace of modern technological
progress, marginal production and distribution costs are trending
towards zero (hence the article's title "Free! Why $0.00 Is the Future
of Business") and so are the prices of goods and services.

The Wired
article discusses those goods whose production and distribution is
based on the rapidly cheapening web infrastructure, but in an earlier speech
at last year's Nokia World Anderson also touched upon an entirely
different class of goods -- the stuff you can touch, smell and sit on
-- and how 3D printing will drive the marginal costs of making the
"real" merchandise also to zero (it's around the 15th minute into the
speech; Real Player).

(Long-time readers of this blog will remember a few thoughts on the role of advertising in the era of mass 3D printing.)

Anderson aptly called this new paradigm "freeconomics",
which, I guess, means the economics of communism without the political
terror that accompanied nominally communist -- but, in fact, barely
socialist -- regimes in the last century.

There are at least two
answers to the question whether and how communism is compatible with
capitalism. Marx would say that communism is the next logical step in
civilization's development that would replace capitalism (Marx would
also add "violently").

Much closer to Anderson's are the ideas of Howard Sherman, a radical American economist who in conclusion to his 1969 paper "The Economics of Pure Communism" wrote:

economic arguments against communism were examined and found wanting.
An economy of 70% or 80% free consumer goods seems possible--with
little or no loss in perfotmance--in an easily foreseeable future. A
gradual increase of the free goods sector, with careful attention to
elasticities of demand, should make it possible to maintain equilibrium
of supply and demand for all products, assuming present rates of
productivity increase in the USA or USSR. Second, a gradual increase of
free goods combined with continued wages to pay for the remaining
priced (luxury) goods should present few new incentive problems. Third,
with the use of accounting prices for free goods (derived from optimal
programming processes), optimal planning can continue to function as
well as under. socialism. Moreover, the planning can be centralized or
decentralized as preferred, assuming the accounting prices are given to
the managers as parameters. Finally, if economic performance is at
least as good as in socialism, most of the arguments in favour of
communism are non-economic--but these are beyond the scope of this

Anderson concludes his article with "[...] a
generation raised on the free Web is coming of age, and they will find
entirely new ways to embrace waste, transforming the world in the
process. Because free is what you want -- and free, increasingly, is
what you're going to get."

A quote from the original Manifesto
would not be out of place here: "The feudal relations of property
became no longer compatible with the already developed productive
forces; they became so many fetters. They had to be burst asunder; they
were burst asunder."

The authors of this parody poster are not entirely inaccurate.

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