The Third Industrial Revolution by Jeremy Rifkin
An enlightened individual recommended I read Jeremy Rifkin’s (@jeremyrifkin) book, The Third Industrial Revolution – How Lateral Power Is Transforming Energy, The Economy and the World (2011). Based on the title I thought it was going to be a book principally about post carbon energy production. While Rifkin certainly covers the post carbon topic, he more importantly provides a much broader contextual framework to understand the phase shift occurring in all facets of modern life.
Rifkin first conceived of The Third Industrial Revolution or “TIR” as a senior lecturer at the Wharton School’s Advanced Management Program (AMP) at the University of Pennsylvania. Rifkin continues to speak convincingly about the need for a Third Industrial Revolution. Rifkin himself admits to struggling over including the word “industrial” in the title of his book but I think the importance of the task at hand is “industrial” in nature. Rifkin writes:
I anguished for months over the title of this book, wondering who is going to cozy up to a work with the word industrial splashed on the cover. It seemed so retro. Isn’t industrial something only engineers and trade union leaders care about? Industrial conjures up visions of worker drones spaced along assembly lines, mindlessly attaching small parts to a product as it speeds down the conveyer belt … The Third Industrial Revolution is the last stage of the great industrial saga and the first stage of the emerging collaborative era rolled together. It represents an interregnum between two periods of economic history – the first characterized by industrious behavior and the second by collaborative behavior.
Rifkin defines great economic or industrial revolutions as the convergence of new communications technologies with new energy systems. Rifkin writes, “It is the laying down of a communication-energy infrastructure, over a period of decades, that establishes a long-term growth curve for a new economic era.” Based on this definition, the First Industrial Revolution consisted of the convergence of the telegraph, railroad and coal. The Second Industrial Revolution resulted from the convergence of the telephone, automobile, centralized electricity and oil. Now, we are poised for the Third Industrial Revolution where the the internet will converge with distributed and renewable energy systems.
Rifkin predicts that future generations will describe “this period as the Carbon Era, just as we have referred to past periods as the Bronze and Iron Ages.” Rifkin believes that the Carbon Era is at a crossroads where “the entire industrial infrastructure built on the back of fossil fuels is aging and in disrepair.” Rifkin describes the great recession of 2008 as a symptom of Second Industrial Revolution endgame which started in the 1980s. Rifkin writes:
The credit bubble and the financial crisis did not occur in a vacuum. They grew out of the deceleration of the Second Industrial Revolution. That slowdown began in the late 1980s, when the suburban construction boom – brought on by the laying down of the interstate highway system – peaked, signaling the high water mark of the auto age and the oil era.
From Rifkin’s standpoint, the recovery from the 1980-90 recession was not a genuine recovery. Rifkin writes that “in lieu of a powerful new communication-energy mix, we began to grow the economy by living off the accumulated wealth generated in the four decades following World War II.”
Additionally, Rifken describes an “entropy bill” that is coming due from the First and Second Industrial Revolutions. In Rifkin’s words:
Two hundred years of burning coal, oil and natural gas to propel an industrial way of life has resulted in the release of massive amounts of carbon dioxide into the Earth’s atmosphere. That spent energy – the entropy bill – blocks the sun’s radiant heat from escaping the planet and threatens a catastrophic shift in the temperature of the Earth, with potentially devastating consequences for the future of life.
Rifkin’s description of climate change as an “entropy bill” and description of current policy “sleepwalking” in light of this bill is a worthy read. Even though Rifkin misses the recent North American energy boom, his ‘entropy bill’ still applies because this domestic production just increases the entropy tab.
Rifkin declares that a a new narrative and societal outlook is needed. Rifkin proposes five pillars for the Third Industrial revolution which need to be laid down simultaneously. Rifkin’s five pillars are:
- shifting to renewable energy
- transforming buildings into micro power plants to collect renewable energies on site
- deploying hydrogen and other storage technologies to store intermittent energy
- applying Internet technologies to enable power grid sharing
- transitioning transport fleet to electric
I leave to the reader to explore these five pillars. While I debate some of the pillars, the overarching concept of the need for a new energy paradigm to compliment the new communications paradigm is compelling. Just think of the increasing wave of severe storms that we are witnessing. Why should we be so dependent upon centralized, carbon based energy when decentralized, renewable energy would both make society more resilient from these power outage causing disasters while also reducing our carbon footprint.
Rifkin also explores the wider societal impacts that will come from a Third Industrial Revolution. “The conventional top-down organization of society that characterized much of the economic, social, and political life of the fossil fuel based industrial revolutions,” writes Rifkin, “is giving way to distributed and collaborative relationships in the emerging green industrial era.”
Rifkin believes that “the laying down of the critical infrastructure over the course of the next forty years will require a final surge of mass labor power.” Longer term, however, Rifkin observes that economic theory underpinning previous industrial industrial revolutions will need to be revised if not replaced. Rifkin writes,
This central assumption of economic theory – that supply creates its own demand – has come up against new realities that cast serious doubt on its continued validity.
Increasing supply and increasing productivity are not automatically leading “to increases in consumer demand and more employment but, in some instances, have had the opposite effect – the loss of jobs and purchasing power.” The increasingly productive supply of previous industrial revolutions created supply AND purchasing power demand. Rifkin believes we are entering a period where rapidly increasing “smart tech” productivity increases supply BUT erodes purchasing power demand. “All of which,” writes Rifkin, “begs the question of how to keep hundreds of millions of people employed as we move further into the century.”
In this new world, Rifkin I think correctly writes:
We will need to be prepared by readying the human race to shift out of an industrial existence and into a collaborative future just as our great-grandparents made the shift from an agricultural and rural existence to an industrial and urban way of life.