Why the Sharing Economy Is About Desperation, Not Trust 331
An anonymous reader writes "Wired recently ran a cover story about the sharing economy — shorthand for the rise of peer-to-peer rental services like Lyft and Airbnb — which they call a cultural and economic breakthrough. They say it has ushered in a 'new era of Internet-enabled intimacy.' An article at New York Magazine has another theory: that it arose because of the weakness in the real economy. Quoting: 'A huge precondition for the sharing economy has been a depressed labor market, in which lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways. In many cases, people join the sharing economy because they've recently lost a full-time job and are piecing together income from several part-time gigs to replace it. In a few cases, it's because the pricing structure of the sharing economy made their old jobs less profitable. (Like full-time taxi drivers who have switched to Lyft or Uber.) In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust.'"
Maybe it is neither (Score:2, Interesting)
It may well be that 'sharing economy' is just a manifestation of a deeper problem, the inability of the drivers of development in the past century -- capitalism and democracy -- to cope with the problems the modern world is facing.
The world needs a new political and economic systems that can tackle the problems we're facing, and tackle them efficiently and in a way that makes sense both locally and globally. It is most likely that these will evolve out of what we already have with the experience and frustrations we gain from trial-and-error experiments like the sharing economy, free online education and whatnot.
Re:Sharing is common outside the west (Score:5, Interesting)
Anecdotally, I've had a number of friends who had to go this route with AirBNB. All of them love the money, none of them love the strangers in their apartments. (Though it isn't all bad - they're generally nice people.)
Market theory (Score:4, Interesting)
A market works best if all sides have the same access to knowledge. Prior to the Internet there was no big market for "i have a room which is dont use" because exchanging information was too expensive.
However, it was not at all unusual on the countryside to just put up a sign if you had a room to rent. I remember bicycle trips where we just stopped at some farm and asked and got a room there.
What is new is that you can plan this.
Re:"Necessity is the mother of invention" (Score:4, Interesting)
...but I don't think that the only necessities are economic (...as both dyed-thru Marxists and Neocons seem to? I get that this is not you). While it's true the trigger for my involvement with "sharing"--from free-as-in-beer file-sharing to using Airbnb to potlucks to etc. etc.--may sometimes be economic, "because I can't afford to otherwise" doesn't actually make it in the top three of my reasons, now very much engaged with "sharing," for continuing in it.
The New Intimacy is new not because humans are different, but because more are more available than ever before.
Perceive yourself being modded up 'Insightful'.
It is a new economic paradigm that currently evolves. Until recently, economics was based on the distribution of scare resources. And Marx didn't live to see this new aspect. Therefore, despite of his usefulness of his work in our days, his insights need to be accompanied by the only-evolving paradigm of managing an oversupply.
Combine this with the concept of the necessity of growth, and we all run into troubled times. Because the necessity of growth is by mathematical definition not linear but exponential. Compound interest, in case you don't understand the pure term.
Overall, an exponential growth is needed [so teach us the prevailing economic theories], while on the other hand an oversupply with decreasing prices [due to great leaps in productivity] kind of drowns us in mountains of consumables.
Re:tl;dr (Score:3, Interesting)
The debt in "real money" can also fuel the sharing economy. When you have a negative amount of "government credit units", but can get into a sharing community that issues it's own "sharing credit units" so you can start of with a clean slate there. And perhaps even get more return value out of it than with the "official economy" Which might be the only way left to influence the economical direction.
Since elections don't seem to work any more to change the political direction, the only working answer to "we don't want you to participate as labour in our system because you are to expensive" is a "then we don't want to participate as consumers in your system any longer neither."
Re:tl;dr (Score:5, Interesting)
We've given the power of the printing press to bank managers. They lend money that doesn't exist through the magic of double entry book keeping. We spend it to keep the economy going. And then we have to pay it back with interest. Except we aren't paying it back, we keep borrowing more.
During the 2007-2010 crisis, I was worried about deflation. It should have been worse than the aftermath of the 1929 crash. But it didn't quite happen. This time around it wasn't just businesses leveraged up to their eyeballs. When a business has to find cash to pay back their loans, they can slash prices on inventory, sell what they've got without ordering more and cut staff. All of this leads to a massive reduction in income, without managing to reduce debts much at all. In fact, since incomes fell so drastically, attempting to pay off debts caused them to rise.
While all those things did happen, this time around it was households holding a significant fraction of the debt. What is an individual going to do? Stop eating? Stop needing a roof over their heads?
Plus this time, we've managed to get everyone borrowing again. So the economy is back on track and heading upwards. We've recovered better than they did in the early 1930's. Here in Australia we managed to avoid a technical recession completely. Our PM at the time did everything he could to get spending money into the hands of every day people. He didn't give a cent directly to the banks, he didn't need to.
But we're not out of the woods, not by a long shot. Our mountain of debt is still there. On the average day in the 1930's the stock market was climbing, things were getting better. But then there was another crash. And the long term trend was still downwards. It was only with the outbreak of war and a massive spending spree on the part of the US gov, that debts finally reduced to sane levels.
History doesn't repeat exactly, but it certainly does rhyme. We're going to hit another crisis. The total debt level of the economy is too high for it to be otherwise. Some group of people out there are holding onto a lot of debt and are technically insolvent. At some point their creditors are going to notice and the whole stack of cards is going to tumble again. Who's it going to be? No idea.
Re:tl;dr (Score:2, Interesting)
Deflation is no poison, you are a tool of government propaganda, brainwashed to the core, completely without any sense or understanding. Deflation was the reality of 19th century USA economy, the period of time, when the standard of living of an average American has gone up by orders of magnitude faster than at any point in time. In fact during the 'scary deflationary' period the standard of living for Americans has gone up, but during the government induced inflation the standard of living was and is falling.
Deflation is great for people who have less, they can afford more with less. Deflation is apparently also great for investments, which is shown by history, specifically because more savers are created during deflation, who are able to lend money to the most productive uses, so deflation grows savings, inflation destroys savings. Guess which the world needs to grow the economy... but of course you are so brain washed and brain dead, you will guess wrong.
In fact deflation does NOT stop people from buying consumer goods that they need, this is patently absurd, it's absolutely absurd given a very SIMPLE COUNTEREXAMPLE: CREDIT CARDS. People are buying today on credit cards, which means that they are willing to pay MORE for the goods that they are buying today rather than saving their money and not using credit cards (which means paying for the privilege of using the borrowed money today) they will not save and buy tomorrow to avoid extra borrowing costs, they will instead buy today. That's what time preference is - buying today rather than tomorrow is actually also a function of cost of money.
In any case, you are 100% wrong on all of your economic ideas that were beaten into your stupid head for the entire duration of your pathetic thoughtless life.
Inflation is only useful to force people to buy ONE THING: INVESTMENTS.
The only thing that people will NOT buy today if those things will become cheaper tomorrow are INVESTMENTS. If you know for a fact that your purchase will be valued lower in a year than today, you will not buy an investment like that, so the only thing that the government promotes people buying with inflated money supply are investments, which would cost LESS in a year (thanks to deflation, which is what the USA economy is apparently needing, which is why that is the natural progression that the economy would take right now, given so much misalignment in resource allocation).
You have a lame excuse for a brain.
Re:Growth is not necessity (Score:5, Interesting)
The modern shareholder item where a company must grow no matter what... and if a company is well established, but not gaining new market, it is considered a hot potato and has to be dropped... This is a self-destructive philosophy seems to be fairly recent.
I think part of the reason why Dell went private is exactly this. The desktop/server/workstation market is not growing by leaps and bounds. Is it still lucrative? By far. Companies amortize their computers every 3-5 years on taxes, Moore's law allows more functionality in the same server and workstation space, and new real estate to expand server rooms is a lot more expensive than replacing existing servers for more bang/cubic centimeter. However, is it growing by leaps and bounds? Not really.
Another big issue is that companies that are stable end up getting bought out by others that have the "growth focus". This means that a product made by a firm for 20 years and is tried and true gets replaced by something cheap and shoddy because there is no stake in that one little niche anymore, so the larger firm can cut corners there without risking the stock value all around.
I've seen this happen fairly often in the RV industry. A small firm that has some useful widget gets bought out by a larger, "growing" company, and next thing you know, the well-made, made in USA item that was made to last a lifetime now is made overseas [1] out of a cheaper metal and manufacturing process... or is turned to craptastic plastic fresh out of an injection mold. Of course, the price doesn't go down. Yes, the larger company expanded and seized a narrow market. However, other than that one company, nobody else is benefiting from this.
As described above, exponential growth isn't sustainable. What does a firm do when they reach market saturation? Get bought up by a bigger firm that is "growing"? The result of this are a few companies owning a lot of market niches.
Finally, when a recession hits, the focus on growth can turn so-so times into a death spiral. A company may not be expanding in a sour economy... but it can be holding its own. However, with the growth mentality, no new market additions can push stock values down, causing that company to collapse. The car industry comes to mind here, because the first thing that happens in a recession is that people stop buying new cars, so automakers get hit hard in the stock market when this happens.
[1]: I don't want to bash China on this one. Generally, they try to make stuff to spec, and if a company specs "cheap junk", they will deliver "cheap junk". If a company specs high quality and foots the bill for the better materials/fit/finish/manufacturing processes, it will come off the ship that way.
Re:tl;dr (Score:2, Interesting)
The poor of today worry about where their next meal comes from just like the poor always have.
Re:Old people can't do physical labor (Score:5, Interesting)
In terms of farming, absolutely. By optimizing away the common man's ability to be self-sufficient we've fundamentally altered the nature of the "game".
As for military spending, sure we need a certain level to keep the barbarians from our gates. Though outspending the next 20+ nations combined is probably overkill. But that's getting off topic.
As for taxes, there's lots of other ways taxes can be good for everyone. Roads for example. Dirt ruts can only carry you so far, and toll roads are unlikely to be cost effective. Free paved roads allow the farmer to get his produce to market in a timely fashion instead of having 80% of it rot along the way. Other infrastructure can operate similarly - so long as a 10% increase in taxes provides for infrastructure that increases your profitability by 20% almost everyone wins. Similarly with cleanup and policing (which could both be be conceived of as defense against the carelessness or maliciousness of your neighbors). Then there's things like medicine and eduction, which done wisely can be immensely profitable for all involved when socialized at a basic level. The costs of basic services are minimal when spread across the population, and most everyone benefits from both the direct education and the resulting facilitation of the poor-but-brilliant child being able to get a good start towards becoming an engine of societal advancement. Life-extension medicine is it's own thing, there's unlikely to be any great benefit to society from keeping an octogenarian or permanent invalid alive for an extra cuple couple decades, though one could debate as to whether the occasional Steven Hawking is worth the cost. Fixing broken bones and curing infectious diseases though - that's cheap, and everyone benefits, even if they never personally have cause to partake, since it's increasing the percentage of able-bodied individuals in your society (= decreasing freeloaders), and helping to avoid plagues.