Capitalism: On the out?

In 1776 Philosopher and early Economist, Adam Smith, helped to radically change the way that the world viewed economics, and particularly the type of system that America's founders would set up for their little country. In the 18th century, the shift was from a Mercantile system to the Capitalist system, the close parallel of a shift from Monarchy to Democracy. But now, nearly 250 years later, could Capitalism itself be on the way out in the Free World? Chris Anderson thinks so.

Goods to Services

 When Smith came along he radically proposed that treasury gold, the goal of mercantilism, should not be the end of a nation's economy. Rather he defined wealth as the amount of goods that a nation can consume and produce in a year's time. Chris Anderson has begun to argue that, at least on the internet, wealth is not really a continuing part of the equation of economics. Rather as the actual price of goods has fallen drastically to "free", that money and wealth have left the products market for services, ones that we are willing to pay for because we believe they will significantly improve our lives.These services, such as paid versions of Skype, Flickr, Yugma, and others not only rake in enough dough to cover their costs, but also the costs of all the free users, called the 1% Rule by Anderson, thus goods and services really are exchanged for $0.00.

Self-Interest to Social Benefits

 One of the founding prinicples of the market economy is the idea that man is motivated by his on self-interest.

It is not from the benevolence of the butcher,  the brewer, or the baker, that we expect our dinner, but from their regard for their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities but of their advantages.

Open movements have successfully begun to over throw this fundamental concept of capitalism. Their motivation? Reputation. So called "Reputation Economies" appear, at least to most, as a farce. How does one eat reputation? Will my local banker take reputation for collateral on my new car? No, they won't at least not directly. But as most things in the world, reputation is about who you know, and who knows you. Companies don't hire you and give you jobs, people do. And if you have helped said person fix a bug in their program, they might be more willing to look at you and your skills when considering a open position. So essentially, nothing has changed, you still want people to notice you, a self-interest, but now the direct benefit is more people knowing your name, or reputation.

But further if Capitalism paralleled Democracy as the new way of life for much of the world, how will the new digital economic change the way we see our politics?