Sharing Economy

The term the sharing economy is thrown around a lot these days with new forms of online interactions. I would like to discuss here what it is and what it is not. The idea of a sharing economy is really very old. In fact, until the advent of capitalism, most people worked on some form of a sharing economy—I share with you what I have and you share what you have.

Sharing-Economy-Cover1-620x350However, these days all sorts of unregulated business, especially these that use the internet, are being referred to as the “sharing economy.” There are such things as Air B&B where people rent out their homes or rooms in their home. Another popular one is Uber and the like where people act as private taxi drivers using their own cars.

The rationale for calling this “sharing” economy is that these are things people have anyway and now they are “sharing” them with others.

However, the idea is really not “sharing” in the traditional sense of the word of what is mine is yours, but rather of making extra income. I do not see the primary motivation of these new businesses (which is what they are) as oh, i have something extra that I can let others have or use, but rather, a need for money. Such  businesses charge real money, and often use the advantage of not being regulated to undercut established businesses or offer a service where traditional business does not exist or do not find profitable. This is what in the rest of the world has always referred to as the “grey” market.

I actually see the growth of this economy not as a paradigm shift away from competitive capitalism, but more as the underbelly of that system, born in this country particularly out of a weak economy where many families can no longer support themselves due to the shrinking of decent paying jobs in the regular economy. Such grey markets have always been a large part of the economy of third world countries. I may have extra time without regular employment, yet I own a car, so I become an Uber driver. My kids have moved out and I have extra room, and am struggling on my fixed retirement, or low wage job—so I rent out my extra rooms.

However, this can actually lead to a downward spiral of income and job security. Regulated taxi drivers and their companies have large overhead and rules to meet. Their jobs are reduced when people can pay half the price to an Uber driver. The same with hotels and inns. Uber drivers and Air B&B types have no job security, no pensions, etc.—as it is based on the idea of it being “extra” income. And in the Air B&B market, some commercial companies are now buying properties in urban markets to run unregulated hotels, undercutting traditional hotels. They do not have to meet all sorts of regulations (as of yet) and do not have unionized protected employees.

I have a different idea of what a sharing economy really means. An authentic sharing economy is about bypassing the monetary economy. I have something that others can use, so I share it with others; others have something I can use, they share it with me. Examples of this from the relatively recent past might be a “roof raising,” when farmers and homesteaders built their own homes. While most of the house a man cold build himself, when it cam to putting up the roof, help was needed. The neighbors would come out and lend a hand. They knew when they needed something similar their neighbors would be there for them as well. No payment was given or expected.

Another example is farming cooperatives, where no one farmer could afford the some of the expensive machinery and they would pool resources and share them. Or even help plow each others field, or help at harvest time.

More recent forms of the sharing economy might be barter networks. While most of these do include some sort of exchange of an alternative “currency” (often in terms of hours of service rendered), they attempt to equalize the inequalities or the worth of some people’s time over others inherent in our current capitalist system. In some an hour is an hour, no matter what service is rendered. In others, their might be some leeway for differentials. Some even have no such accounting.

A real sharing economy is about thinking not how can I make the most money, but about how can I use my resources and skills in a way that contribute to others, giving back to my community. Capitalism is based on a competitive model, how can I get the most for myself and beat my competition. The sharing economy is based on a cooperative model, how can I help others.

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One thought on “Sharing Economy

  1. Nicholas, thanks for a thoughtful column. You might be interested in teacher collaboratives that are developing. There’s a national conference today describing how district & charter educators are coming together to create new teacher powered public schools: http://bit.ly/1Ql02xg

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