What is the sharing economy, and is it actually socially beneficial?

January 29, 2016
By shaz

Sharing is caring, right? Well, actually, it ain’t so simple. The sharing econonmy is increasingly a buzzword that smells of emancipatory potential in a post-capitalist society, accelerated by the possibilities offered by social networking on digital platforms. Yet what does the sharing economy actually mean?

Boiled down to the bare bones, the sharing economy is about producing and sharing things that in many instances bypass money and thus the financial system as we currently know it. Think Creative Commons, lending libraries, and Uber.

In the 10 min video below, Jeremy Rivkin speaks of the new economic paradigm of collaborative commons with the advent of the internet, where there are zero marginal costs and people can be infinitely productive, bypassing the capitalist market.

It’s not fully worked out, especially with the problems that arise when all of this is soley dependent on servers and multinational digital giants (erhum, Google).

As with many explosively popular ideas, there is always going to be some co-opting. Look at what happened to sustainability. So, the sharing economy has also lead to serious problems – the recurring large scale protests of Paris’ taxi cabs against Uber by-passing social protects and union rights is the most prominent recent example.

Indeed, as The Economist already wrote in their 2013 piece on the rise of the sharing economy, the ‘main worry is regulatory uncertainty’. How do you get a handle on something so new? What do you have to protect against? How can we enjoy the benefits of Uber without undermining the social protections in place with licenced taxi cabs?

On the fantastic P2P Foundation’s blog, Martin Bollier has a great piece on ‘making networked sharing socially beneficial, not just predatory and profitable’. He introduces a statement from the Committee of the Regions (CoR), an assembly of elected representatives in the EU that advises the European Commission.

In a landmark paper the CoR says that its actually really difficult to regulate something, like the sharing economy, when you don’t actually know what it is or how it functions.

The Cor statement is remarkable, first, for proposing some worthwhile distinctions in how we think about the “sharing economy.”  It argues that there are really four types of economies –

  • the “access economy” that is renting things rather than selling them permanently;
  • the “gig economy” that hosts contingent work in digital marketplaces;
  • the “collaborative economy” that fosters peer-to-peer governance and production processes; and
  • and the “pooling economy” that enables collective ownership and management.

Each of these distinctions has very important implications for empowerment and building institution-wide social benefits. In the CoR’s model, the collaborative and the pooling economy are the real game-changers.

Once again, much like my recent discussion of community gardening, it is of absolute importance to question underlying assumptions about how society works, and what a particular intervention will do. A theory of change, in other words.

Thoughts on this are very much under development.

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