Capitalism versus Netocracy

De Soto vs. Bard and Söderqvist

Michiel van de Sande, October 21, 2003 - August 5, 2004.

Introduction

In his book "The Mystery of Capital", Hernando de Soto argues that the reason the Third World lags behind the West is the fact that the Third World lacks formal property systems which allow assets to be turned into capital.

In the prophetic book "Netocracy" by Alexander Bard and Jan Söderqvist, it is argued that the emergence of Internet as a means for distributing information and building networks will lead to a new power hierarchy, in which people with supreme knowledge and networking skills will rule over everyone else, including capitalism’s elite: the bourgeoisie. Bard and Söderqvist argue that informationalism will make capitalist institutions, such as the enterprise, the nation state and the university, obsolete.

The problem I have with these two books is that they both state a case which is, to me, plausible, but that I feel they are in some ways contradictory. This bugs me, because both books have essential elements in them which are, and have been, decisive for my personal future.

In this document I will try to find out what the discrepancy is, and I will examine ways in which to resolve this discrepancy. Ultimately I hope to be able to choose one way to incorporate both views into my personal world view. I might have to disregard some things from either theory to achieve that.

Research questions

1.
One of the main discrepancies I feel is the following: Hernando de Soto calls for the implementation of formal property systems in Third World and former communist countries, whereas Bard and Söderqvist argue that Internet will make the nation state obsolete, because disappearing borders will render a geographically structured government useless.
If the nation state is becoming obsolete, what will become of the formal property systems which are managed, or should be implemented, by these nation states?

2.
One of the weaknesses of Bard and Söderqvist’s case is that they do not distinguish between money and capital. Hernando de Soto shows that this distinction is essential for understanding the way the West has become so much richer than the rest of the world. Capital is produced not from assets, but from the relationship between assets and (organizations of) individual humans. This relationship is a form of information. In the Western world, these relationships are recorded in standardized records on a national level. It is the existence of these records and the apparatus around them that creates capital.
Money, on the other hand, is no more than a measure for quantifying the value of assets or capital. It helps exchanging different goods and services by making their value comparable.
Bard and Söderqvist envision that the netocrats will have access to plenty of money, but acquiring as much money (or capital) as possible will no longer be their life project. Exclusive knowledge will be the key to power. Money will no longer be able to buy power, because the netocrats will exchange their exclusive knowledge only with other netocrats, in return for other exclusive knowledge or unique experiences.
I wonder if Bard and Söderqvist’s case will stand up if the distinction between money and capital is woven into their book. Wouldn’t exclusive knowledge appear to be another form of capital?

3.
Another problem I have with Bard and Söderqvist’s case is the way they argue that the capitalist era will end. I have this inkling that capitalist institutions such as the formal property rights system have to be regarded as prerequisites for an informationalist society such as the one Bard and Söderqvist describe. Take something as simple as internet access, which is a service that is delivered to accountable people with property and an address. How else would providers be able to charge users for their services? Can you be a dividual when signing up with an internet provider? I very much doubt this.
Therefore my question is: can capitalism be regarded as a prerequisite for participation in the informationalist society described in "Netocracy"?

4.
Bard and Söderqvist talk a lot about memes, which they interpret as cultural equivalents of genes, in the sense that they evolve according to the rules of evolution. What they do not talk about very much is the role of national laws in the makeup of cultures. The relationship between law and culture is one of mutual influence, not of one-way causation. This is especially true for property law, because it is so tied to the relationship between people and their immediate surroundings.
Does Bard and Söderqvist’s meme concept apply to both real world culture and virtual culture, and if so, what role would (national) law play in these cultures in the future?

5.
Bard and Söderqvist argue that the central point of struggle in netocratic society will be copyrights and intellectual property rights. I do not view this as radically different from capitalist society which is focused on formal property rights over physical assets. It appears to me to be a shift in perception of value. No longer is the cost of materials and labor the deciding factor in determining value, but the amount of unique knowledge and talent that is needed for producing a certain thing is decisive for its value. The produced "thing" may not be more than a piece of information in the virtual world. As the mentioned knowledge is spread, the value of the product rapidly diminishes. The value concept itself, however, which is typical of capitalism, doesn’t disappear. Only measuring value in terms of money will become much more difficult, if not impossible. In that regard, Bard and Söderqvist appear to have a point.
Isn’t Bard and Söderqvist’s view, which is dominated by intellectual property rights, in essence a capitalist view?

6.
De Soto focuses on the differences between the Third World and the West. By doing this, he is able to show the essence of capitalism, which is only successfully implemented in the West. Bard and Söderqvist, on the other hand, do not pay any specific attention to the Third World at all, and treat it as if it is equivalent to the West in regard to the upcoming paradigm shift. This appears to be a significant weakness in their case, which I would like to investigate upon.
To which extent is Bard and Söderqvist’s view applicable to Third World countries? Is it generally applicable or only inside the Bell Jar (as De Soto calls it), where the capitalist rich of the Third World reside?

7.
Should Internet be regarded as an informal economy or as a whole new basis for society?
This is a question I have stumbled upon before, in my document "Internet-samenleving". The informal economy would behave as life outside the Bell Jar does, according to De Soto. The new society would be more like the view of Bard and Söderqvist.
This is a question worth elaborating.

Both De Soto and Bard and Söderqvist come up with the Bill Gates example as support for their case. De Soto claims the success of Bill Gates is mostly due to the formal property system of the United States, and not to his cultural background or Protestant Ethic (p.237). Bard and Söderqvist mention that Bill Gates was born in Seattle, a city that both physically, virtually and historically is situated close to the fast-growing technological industries of California (p.45). They claim the Microsoft meme was well suited to the nearby cluster, which made the meme successful. That sounds highly simplistic, but I would rather say it’s highly abstract. The essence is in the makeup of that meme (which makes this example relevant for research question 4).
This example shows me that the two books I am comparing are written on a different level of abstraction. Bard and Söderqvists’s book is much more abstract than De Soto’s. Bridging the difference in abstraction level will be the most difficult task of my research. I will have to fill in Bard and Söderqvist’s theory with more detail.

With these research questions, I hope to unravel the mystery of the discrepancy between De Soto’s property rights case, and Bard and Söderqvist’s “end of capitalism” case.
I expect to find one of the essences in the definition of the terms "capital" and "capitalism".

Research material

The Knowledge Economy

The Knowledge Economy: does it behave according to current economic theory?
The knowledge economy is an interesting concept which could be a very relevant side track to explore. Bard and Söderqvist appear to claim that knowledge is the key to power, and that knowledge has a value that cannot be expressed in monetary terms. It could be worth investigating whether this is due to the informality of the internet economy, or due to the nature of knowledge itself.
If there would be a formal registry of knowledge, could knowledge then be capitalized just like physical assets in the Western world? If so, is such a registry imaginable in practice?

Take Bard and Söderqvist’s example of the far-off island:

"Knowledge of the island has such a high value to the netocrats, and profit such a relatively low one, that exclusivity could well weigh heavier than economic profit. For the capitalist there is no choice. For them the accumulation of capital is the central project in life, a project compared to which everything else is subordinate."

"Characteristic of exploitative consumption is that payment is made with capital. This is different to imploitative consumption, where money is largely uninteresting and where it is knowledge and contacts that are important, belonging to the chosen few who possess exclusive information. Entry into this circle cannot be bought with money, [..] but can only be achieved if you yourself have knowledge, contacts and exclusive information to offer in return." [BS, p.115]

And add to this the following passages from De Soto:

"[The] essential meaning of capital has been lost to history. Capital is now confused with money, which is only one of the many forms in which it travels. [..] As Adam Smith pointed out, money is ‘the great wheel of circulation’, but it is not capital because value ‘cannot consist in those metal pieces.’ In other words, money facilitates transactions, allowing us to buy and sell things, but it is not itself the progenitor of additional production." [So, p.41]

"Capital is born by representing in writing - in a title, a security, a contract and other such records – the most economically and socially useful qualities about the asset, as opposed to the visually more striking aspects of the asset. This is where potential value is first described and registered." [So, p.48]

"[..] The formal property systems of the West have bestowed mixed blessings. While they provided hundreds of millions of citizens with a stake in the capitalist game, what made this stake meaningful was that it could be lost. A great part of the potential value of legal property is derived from the possibility of forfeiture."[So, p.54]

What do these passages tell me?
First of all, that Bard and Söderqvist do not grasp the distinction between money and capital, the way De Soto does.
Second, that Bard and Söderqvist state that the value of knowledge, contacts and exclusive information cannot be measured in terms of money. They may have a point here, but the interesting question that follows is: why not?
The third passage from De Soto gives a clue: knowledge, contacts and exclusive information cannot be lost. If I have exclusive information, I can share it with others, but I will still possess the information afterward. I will only have lost its exclusivity. The potential value of knowledge and information therefore lies in exclusivity, and this value can be released (capitalized upon) by sharing the information. Sharing the information may lead to building up new contacts, from whom other relevant knowledge may be acquired.
This notion, however, is in essence a capitalist one. The only problem with sharing and trading knowledge is that money is a lousy facilitator in this process.

Can knowledge be valued? Maybe it can!
What can be valued is the potential value of the application of knowledge.
And exclusivity can also be measured by examining the ratio between the number of people who could put the knowledge to good (=profitable) use and the number of people who possess that knowledge.
Finally the potential value of the application of knowledge could diminish when that knowledge is made public. This holds especially if the knowledge in question allows unique experiences, which derive their value from their uniqueness. The value that is attached to such experiences is highly subjective (i.e. dependent on personal taste).

Patents and copyrights

Looking at the concept of patents shows that exclusivity of knowledge, or better, of the application of knowledge, can be formalized. Patents are formalizations of volatile assets which allow the generation of surplus value, and are therefore fundamentally capitalist.

This view shows that Bard and Söderqvist’s claim that capitalism is in it’s dying days is certainly way out of proportion. Maybe “monetarism” is. But this has more to do with the informal nature of the exchange of knowledge in a knowledge economy on the internet, than with the impossibility to value knowledge in a monetary way. On the internet it is impossible to tell which country’s patent or copyright laws should apply. Only when worldwide patent laws are introduced can knowledge be capitalized effectively.

Bard and Söderqvist also state that the struggle over patents and copyrights is typical for a society which is transforming from a capitalist society into an informationalist one. It is a power struggle between the capitalists and the netocrats. Capitalists try to patent their knowledge so that others will have to pay for acquiring and applying it. Netocrats will keep their knowledge exclusive and exchange it only with a select few in order to acquire other valuable information. Eternalists (an academic type of netocrat) who are very talented in gaining an overview over the information overload, are more likely to spread their knowledge widely, since they know they will always be a step ahead of the rest. This behavior is a form of treason against the netocratic class, according to Bard and Söderqvist, since these eternalists deprive the other netocrats from the exclusivity of the information.

Many netocrats will welcome the patent concept since it allows for keeping information exclusive for some time. But since the patent legislature is mainly a national issue (there are also some international patent agreements, though) the collapse of the nation state will cause the patent concept to crumble as well. By that time, netocrats with exclusive information will have to resort to firewalls to keep their information secret.

Now, is the way the netocrats treat their knowledge inherently capitalist? Why don’t the netocrats sell their knowledge for money and use the money to buy new knowledge? Primarily because there is no guarantee that money can be exchanged for relevant exclusive knowledge. You have to know where to find it as well. And if someone is able to tell you, the knowledge is probably not exclusive anyway. Secondly, there is no such thing as a “knowledge market” with supply and demand. Therefore, there is no pricing mechanism. Is such a phenomenon as a knowledge market conceivable in the first place? Only when there is an abundant supply and the identity of the demanding customer is not relevant.

Since knowledge, and its exclusivity, is mostly a matter of power, not distinguishing between your ‘customers’ is not using your power. It matters to whom you give your information. Mostly this is a matter of trust, like it is in an informal economy. But the trust is different from trade relationships: not only is it a matter of trust if you will get something in return for your knowledge, even more so it is trust in what the receptor will do with that knowledge that counts. If the receptor spreads the knowledge all over the place this will harm the exclusivity of your knowledge as well.

Capitalists usually don’t need to judge their customers that way.

Death of capitalism?

Is the capitalist paradigm actually in it’s dying days? Let’s examine the three assumed constants in the capitalist paradigm, according to Bard and Söderqvist: the nation state, the enterprise and the university.

The imploding role of the nation state as a result of the globalization process (which consists of two phenomena – BS) is a trend that is certainly discernible. It is accompanied by a gradual transition of power to NGO’s, transnational structures such as the WTO and the WHO, and by constructing new supranational governments such as the EU. The emergence of the internet accelerates this process. According to the power hierarchy that is proposed, organizations such as WHO and WTO will be more successful that e.g. the EU, because of their networking nature and lack of democratic control. They are better suited to the media society of the 21st century.

Then, let’s consider the position of the enterprise. The ‘capitalist’ enterprise is focused on maximizing profits by producing as much as possible for as low a cost as possible. Bard and Söderqvist predict a shift from maximizing production to maximizing consumption. This new emphasis on consumption would make the great producers of the world relatively powerless compared to the marketeers who convince consumers to consume a certain product. This constitutes a shift in power from production enterprises to marketing and advertising enterprises. There will still be enterprises but the focus of these enterprises will be different. This transition process is already noticeable today. Naomi Klein’s “No Logo” is mostly aimed at this development. The big multinationals resort more and more to outsourcing their production to subcontractors, and instead focusing on marketing their brands.

As for the university, their role as ‘knowledge factories’ will be undermined because the most talented knowledge creators will be participating in the new networks created via the internet. Bard and Söderqvist claim these networks will be far more effective in producing new knowledge than the current universities. Moreover, the job market will become so heterogenic that universities will be unable to meet market demands for labor. The new powerful enterprise will ask for talented people, not for knowledgeable people. The talent to acquire new knowledge will be more important than knowledge itself, because knowledge will have a rapidly diminishing value (a very short half-life, so to say). This talent is predetermined genetically and cannot be acquired by learning. A true meritocracy is in the making.

My conclusion is that the shift towards the new paradigm of informationalism, as Bard and Söderqvist describe it, is certainly likely to occur. On the other hand, society under this paradigm will still function – albeit partly – according to capitalist principles. Value and potential value will still be important factors in making decisions, but this value will become much more subjective.

Attentionalism

One of the most relevant chapters of Bard and Söderqvist’s book, considering the research topics, is the chapter called “Network pyramids – attentionalistic power hierarchies”. In this chapter they describe the essence of the shift from capitalism to informationalism, which they would have preferred to call “attentionalism” had the term “informationalism” not yet been established.

Some of the more meaningful passages of this chapter:

"It is reputation, or capital of trust, that is the network’s most important asset; with the help of reputation, attention is attracted to the networks, and there is a great shortage of attention, rather than money, on the net. Money will follow attention, and not vice versa. Attention is the only hard currency in the virtual world. The strategy and logic of the netocracy are therefore attentionalist rather than capitalist." [BS, p.199]

"Capitalists will become an underclass that has to content itself with haggling over old, second-hand information from the scrap heap, while the netocracy – the networking elite – carries off the prize of power and status, as well as experiences and kicks. The netocrats will, of course, also eventually carry off the financial profits, in spite of the fact that these are of only secondary interest; they control the knowledge, after all, and can create the attention that is more valuable than anything else. Only when the netocrats have used the most important information for their own advantage will they sell it, with the blessing of their network, to the highest bidding capitalist. So the capitalists will be forced to adapt and subordinate themselves to attentionalist conditions and play a game whose rules they have not decided themselves, and which they in many cases do not understand at all." [BS, p.201-202]

I think the shift that Bard and Söderqvist envision will be a little more subtle than this, mostly because the view of capitalism is too simplistic. One of the most powerful entities in capitalist society has been the so-called “old boys network”, which certainly already has some similarities to the type of networks that Bard and Söderqvist describe. I sincerely doubt that these multi-millionaire old boys are still preoccupied with making more and more money for themselves. They are interested in power, just like the netocrats. Only this network thrives on knowledge of the game of making enterprises more profitable, so as to increase shareholder value. It is a network in which a ruthless attitude towards cutting costs, mostly by massive lay-offs, is most prized. This is, however, not the sort of attitude that is prized by the netocracy. Becoming and remaining a respected curator requires very good social skills.

The Third World: life outside the Bell Jar

The question whether Bard and Söderqvist’s description for netocratic society also holds for Third World countries is mostly influenced by the question whether the presence of a so called “Bell Jar”, as De Soto calls it, makes any difference.

The main difference between life inside and outside the Bell Jar is that outside, no property systems or personal records are kept, and therefore no formal proof of existence of personality or property rights can be obtained. People outside the Bell Jar do have assets, but they are all informal and can therefore not be used to create capital, e.g. by mortgaging property.

In principle, this situation doesn’t change the basic premise of netocratic society: knowledge is the key to power. It will be much more difficult for people outside the Bell Jar to obtain enough knowledge and contacts to play any significant role in the power games of netocratic society. This is mostly because some assets, i.e. a computer and network connection, are needed for active participation. Those who cannot get access to these objects, will be left with television as their main source of information, this information being mostly adverts. These people will be part of the consumtariat. Those with enough skills, however, will be able to get access to a computer and a network connection, may also obtain significant knowledge and can therefore participate in netocratic society. The true meritocracy can therefore also include those which are now considered to be te proletariat of the world. It will take some time before people in informal areas will get access to the internet at home; however, the ones with enough skills will be wise enough to move to the cities, where internet access will be available, if not in homes in slum areas, then at least in public internet cafes.

The Bell Jar of capitalist society wil not be as exclusive in netocratic society as it is now. Informal assets will suffice in getting internet access, and thus in obtaining information – if you know where to look.

Thus, there is no exclusion mechanism present which prevent the Third World population from joining the informationalist society. One has to say, though, that other mechanisms will take their place. These, however, are mostly connected with talent, which is a genetic fact. Acquiring knowledge of the English language will become a decisive factor in acquiring knowledge, although it must be said many other languages are supported at this time.

The Bell Jar, however, is not a decisive factor in obtaining any position of power in netocratic society.

Answers to the questions

Question 1:
If the nation state is becoming obsolete, what will become of the formal property systems which are managed, or should be implemented, by these nation states?

The nation state is becoming obsolete only in a certain sense, namely as an instrument for governing a society. The property system could well outlive the nation state. Capitalism will not altogether disappear, but capitalism will no longer be the dominant factor in society.

The section "attentionalism" states that capitalists will become an underclass in netocratic society. This doesn’t mean that property systems (or other institutions of the nation state) will disappear, only that the power of the nation state and capitalists will greatly diminish.

The importance of the property system will therefore be reduced. Third World countries may not want to bother with setting up property systems, but instead move straight ahead towards a stronger position in netocratic society. This will be difficult, because a certain amount of capital is definitely needed to provide the necessary infrastructure.

The importance of a good property system will depend on the resources needed to provide the infrastructure necessary for entering the population into netocratic society. One needs to think not only of technical means but also of education (English language, social skills, learning skills).

Question 2:
I wonder if Bard and Söderqvist’s case will stand up if the distinction between money and capital is woven into their book. Wouldn’t exclusive knowledge appear to be another form of capital?

The section on Knowledge Economy shows that knowledge cannot be treated like a physical asset that can produce capital. Some value may be attached to exclusivity of knowledge, but the persons possessing this knowledge will not be primarily interested in making money out of this knowledge. Instead, they will provide other persons with exclusive knowledge, who can offer other exclusive knowledge in return. At least at the top, there will not be a free knowledge market in which knowledge is freely exchanged for money to any person who is able to pay.

Such a market may only exist for knowledge which has been abandoned by the netocrats (i.e. sold to the highest bidder after optimal use by the network).

It therefore appears that the distinction between money and capital is largely irrelevant for the knowledge economy, and thus Bard and Söderqvist’s case still holds.

Question 3:
Isn’t internet access a service that is only delivered to accountable people with a name and an address? Consequently, can capitalism be regarded as a prerequisite for participation in the informationalist society described in “Netocracy”?

Internet access is mainly provided by institutions (“internet providers”) which currently function according to capitalist principles. There are, however, numerous possibilities for acquiring anonymous access to the internet. These may be more expensive than the “normal” providers. Internet cafes are an option. Still, getting an e-mail address may be difficult without leaving a name and address with a provider. However, most providers won’t verify home addresses, I suppose. So even persons without a home address could get access to a connection and an e-mail address. Not everyone will be able to find the providers that allow anonymous access. This requires some networking skills.

For most netizens, getting access will not be a problem. Once most everyone has access, the need for capitalist institutions such as a property registry will diminish as a prerequisite for getting access. Therefore there can only be a prerequisitory relationship during the transitional phase from capitalism to informationalism.

Question 4:
Does Bard and Söderqvist’s meme concept apply to both real world culture and virtual culture, and if so, what role would (national) law play in these cultures in the future?

Real world culture is currently heavily influenced by national law, which partly codifies the moral rules of society. In the virtual world, netiquette will be the “law” that determines culture. Netiquette may vary from network to network, just as law may vary from nation to nation. National law will play no role in virtual culture. Netiquette may start to play a role in real world culture, though.

As for the meme concept: around any meme would be found a cluster of cultural properties, laws and/or netiquette, depending on the context. These interact with each other to form one interconnected system of forces of power. There is no problem in applying the meme concept when national law is taken into account.

As for the future influence of national law, it must be said that its relevance will be greatly reduced over the coming decades.

Question 5:
Isn’t Bard and Söderqvist’s view, which is dominated by intellectual property rights, in essence a capitalist view?

The problem with this question is that it has been phrased incorrectly. Intellectual property rights are not central to the view of Bard and Söderqvist, but are merely the struggle point around which the clash between the old capitalist society and the new informationalist society revolves.

Therefore it shouldn’t surprise anyone that this struggle revolves around a concept which is inherently capitalist, because otherwise the capitalists wouldn’t know what to struggle for. On the other hand it is a capitalist notion that very well suits the interests of the netocrats. Still, for netocrats there could be reasons not to patent exclusive knowledge at all, since patenting requires publication of at least part of that knowledge. If secrecy outweighs the possibility of making money out of exclusivity of knowledge, the netocrat will choose not to patent the knowledge, i.e. follow a strategy of imploitation.

Bard and Söderqvist’s view is not affected by the above discussion: it still holds.

Question 6:
To which extent is Bard and Söderqvist’s view applicable to Third World countries? Is it generally applicable or only inside the Bell Jar (as De Soto calls it), where the capitalist rich of the Third World reside?

Access to capitalist institutions inside the Bell Jar is not decisive in acquiring internet access, network contacts and knowledge. It is somewhat of a hindrance, but those with enough social skills and basic knowledge will be able to find their way in.

Powerful positions in netocratic society can be taken by people from outside the Bell Jar, if they have enough knowledge and skills. They do not necessarily need more skills than people inside the Bell Jar to manage this.

Question 7:
Should Internet be regarded as an informal economy or as a whole new basis for society?

Considering all previous questions have shown the vision of Bard and Söderqvist pretty much holds up, it is quite safe to say that the internet will form the basis for a whole new society, for new cultures, new power structures and the like.

However, this doesn’t mean that in some situations it couldn’t be useful to view the internet als an informal economy. This view has mostly to do with the capitalist view of globalization, however. This view can be used to show that internet trade can only be as effective as “regular” trade if enough safeguards are built in for maintaining trust between trading parties. Institutions such as Trusted Third Parties will be needed to provide public types of encryption, for example. Such institutions will become the internet equivalents of the national personal registries, property registries and banks, i.e. the institutions of Western capitalist society which have lifted the Bell Jar.

Nevertheless, the trading part of the Internet will not be the place where the future power is to be found. The informal economy will mainly be used for trading goods and services, not for trading knowledge. Exchange of knowledge will take place in exclusive networks. The trading part of internet will hardly be exclusive, because exclusivity would mean loss of potential clients. Such sites usually only require subscription, which is mostly aimed at acquiring information to be used for sending personalized adverts.

Conclusion

The original problem I had was the supposed presence of inconsistencies between De Soto’s “The Mystery of Capital” and Bard and Söderqvist’s “Netocracy”. Most of the questions I had about this dealt with the view of capital and capitalism, and its future role in netocratic society.

From this analysis I can conclude that Bard and Söderqvist’s view of future netocratic society hardly needs any change to allow for De Soto’s essence of capitalism: the institutionalization of property rights. However, what I do have to conclude is that De Soto’s recommendations will gradually lose their value as the role of capitalism declines in the coming decades. Access to capital will not be decisive in the struggle for power in netocratic society. Of course, for capitalists, whose aim is to acquire as much capital as possible during their lifetime, additional efforts to lift the Bell Jar will be useful. It will still be a way to lessen poverty. It will not, however, be in the interest of the netocratic class to leave the poor as poor as they are now. The netocrats will want the consumtariat, of which most of the Third World poor wil become part of, to be good consumers, and will supply enough money, food and entertainment to this part of the population in order to prevent riots. It will still be a long time before any society like this is an actual fact and who knows what kind of struggles will take place in the handover of power from capitalists to netocrats.

The formal property system will probably not disappear, but its role in acquiring power will diminish greatly. It is not a prerequisite for participation in netocratic society.

Finally, another interesting notion I got from this research is that the “knowledge economy” cannot function according to capitalist principles, and may therefore be dubbed a contradiction in terms. Patents and copyrights are the capitalist instruments for trading knowledge, or rather exclusivity of knowledge, and it is here that the struggle for power between netocrats and capitalist reaches it zenith.

Literature

Bard, A. and Söderqvist, J. Netocracy, the new power elite and life after capitalism, Pearson Education Ltd., London, UK, 2002. (Original Swedish version published in 2000.)

De Soto, H. The Mystery of Capital, why capitalism triumphs in the West and fails everwhere else, Transworld Publishers, London, Black Swan Edition, 2000.

Klein. N. , No Logo, HarperCollins Publishers, London, 2000.