Monday, 7 April 2014

What’s Mine Is Yours, or Is It?

In the past few years we have all become familiar with the idea of the ‘sharing economy’ and this is true even in the absence of a clear-cut definition of it. If I asked you to name some examples of the ‘sharing economy’, your list would probably include Wikipedia, Spotify, Linux, airbnb, ebay, Mendeley. This, I believe, has to do with the fact that there is nothing much new about the logic that grounds it: we have all experienced practices of renting, lending, swapping, bartering, gifting and we have all shared spaces, meals, textbooks, opinions, skills, knowledge, etc. with others. We engage in such practices for various reasons: sometimes it is because we simply cannot afford to buy, and access, rather than ownership, is a more viable option. Sometimes we prefer to re-use unwanted items than to throw them away because, in this way, we reduce the production of waste and, with it, our carbon footprint – all of which seems like a good idea in a world of scarse resources and increasing levels of pollution. Some other times sharing is just more enjoyable; it creates or fosters relationships with other people, and often it leads to new uses and innovative ideas. So, what is different now? Why do we come across a number of articles and blog-posts talking about the rise of the “sharing economy”? And what has turned ‘sharing’ into an ‘economy’ proper?

Digital technology, and the advent of Web 2.0 in particular, appears to be the main driver of this transformation. It’s not just that ‘sharing’ seems to be the fundamental and constitutive activity of the Web 2.0, and especially of social networks (John 2013); the Internet is also changing the way in which we engage in the ‘old’ practices of sharing. This is evident if you consider how easy access to the Web 2.0 scales-up the pool of potential ‘sharers’, and the amount of information about them, thus decreasing the high transaction costs associated with more traditional forms of sharing. In other words, the Web 2.0 allows the creation of systems of organized sharing both in the production (i.e. commons-based peer production) and consumption mode (i.e. collaborative consumption).

By leveraging information technology and the empowerment opportunities it makes available, the ‘sharing economy’ would seem to advance a new socio-economic model, where the production, exchange and consumption of goods and services is based on horizontal networks and distributed power within communities, rather than on the competition between hierarchical organizations. This seems like a valuable characteristic. And, indeed we find that much of the enthusiasm about the sharing economy is generally expressed through the egalitarian language of cooperatives and civic groups. It invokes values like the dispersion of power, sustainability, community-level connectedness and solidarity, the opposition to hierarchical and rigid regulatory regimes in favour of peer-to-peer (P2P) schemes (e.g. “What’s Mine is Yours: The Rise of Collaborative Consumption“). 

But, does this mean that the sharing economy is also changing capitalism from within? Are we all witnessing a switch to a “camping-trip” type of economic organization? Is the Web 2.0 really fostering an egalitarian ethos in our societies? Or is the sharing economy just the hi-tech version of the invisible hand?
These are of course big questions and answering them requires more empirical evidence and critical reflection than I can provide here. That said, I would like to offer one critical insight, precisely about the appropriateness of describing the ‘sharing economy’ as an egalitarian practice. To do so, I will focus on the consumption side of it and the reason is that I find the egalitarian narrative surrounding collaborative consumption more troubling than that of commons-based production.

Solidarity without reciprocity? Often the egalitarian character of collaborative consumption is justified by drawing a comparison with economic systems like the gift-economies. What they have in common is that they are solidarity-producing or enhancing practices. But there is a crucial difference. In gift economies the act of gift giving was meant to be reciprocated: it created obligations to respond in kind and these mutual obligations were the ties that bound society together. Collaborative consumption does not seem to work like that: benefitting from what is shared through the Internet does not create an obligation to reciprocate, and the increasing involvement of capital in the sharing economy (e.g. airbnb has now raised more than $300M in investments) is rapidly substituting reciprocity-driven initiatives with entrepreneurial ones.
Indeed, the more collaborative consumption goes mainstream, the more it becomes just a new business model for large companies. Even when the language and rhetoric of sharing is maintained, what characterized platforms like airbnb and Lyft is the profit-seeking of shareholders, rather than the egalitarian solidarity of more traditional forms of sharing, such as gift giving. With this I am not suggesting that the idea is to be abandoned altogether, but that we should be more prudent in welcoming it as a practice that fosters our egalitarian inclinations. It also means that we should be more attentive to the quick developments that the ‘sharing economy’ is undergoing: indeed, there is very little egalitarianism in tactics like those of “surge pricing” (rising the price of a ride in busy times or during bad weather conditions in order to attract more drivers on the road) that Lyft and Uber have adopted recently.

10 comments:

  1. Sara, thanks for this post. Let me through in one more point, which I picked up from various pieces in newspapers. Some critics say that the web-based sharing economy is even worse: not only does it exploit a language of sharing and equality in order to exploit it economically, it also creates an economic environment in which vulnerable individuals, with few resources, are expected to become micro-entrepreneurs. Don’t earn a living wage? Go offer your living room on airbnb. Don’t have money for a new bike for your kid? Exchange some of your household skills at a local marketplace for someone else’s skill at repairing your kid’s bike. etc.
    I am not sure whether these accusations or worries are justified (do you share them?), but I fully agree with you that the power dynamics in these markets (for that’s what they are, in the end) need to be critically scrutinized!

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    1. Hi Lisa, thanks for your comment. I think you are right: in many cases the most troubling aspect of the sharing economy is not just that it exploits a language of equality, it is that it ends up exploiting people. This concern, I believe, is stronger when it comes to the consumption side. That is because, as you rightly point out, the Internet does in fact create new marketplaces where goods and services are exchanged or bought. These “new” marketplaces however often escape systems of regulation that are in place to protect employees and consumers in more traditional markets. On the one hand, there is a problem with those who engage with the sharing economy by offering goods and services. They are either encouraged to become micro-entrepreneurs and to brand themselves or their activity (e.g. airbnb) or they become de facto empoyees (e.g. Lyft). In the first instance, they escape market regulations because it is not at all clear how the revenues they get from this activity should be taxed (as part of their income? As an economic activity proper?). Moreover, they are not subject to regulations that apply to similar services. Take airbnb for example. When you become a host no one comes to check whether your house is a safe environment or whether you are entitled to offer that service in the first place (maybe you’re renting a big house and your presence on airbnb is just a way of sub-letting an extra-room). The price at which you offer your hospitality, in addition, does not include tourist fees that local authorities usually require from hotels. In other cases (e.g. Lyft), those offering the service just are employees of big companies, with the big difference that they are not formally employed by anyone. This makes them a new category of precariat with no benefits or guarantees for their job.
      On the other hand, consumers also become more vulnerable because no third party is there to make sure that your buying that good or service is not illegal, for example.
      There are two sets of interrelated problems here, which create (or reproduce?) different vulnerabilities. One is that as “new” marketplaces, these activities are able to exploit the loopholes of systems of rules that are meant to regulate “older” types of markets. In many cases, this allows the sharing economy to offer goods and services that are cheaper, precisely because they are not subject to the same regulations of their competitors (or at least not to the same extent). Second (and linked to the first), the economic advantages this creates have huge repercussions on the labour market creating vulnerable workers and further disadvantaging workers employed in similar kinds of activities (here the relevant comparison would be between taxi drivers obliged to have a license and Lyft drivers who are not similarly obliged in spite of offering an identical service). As you can see, I do share the types of concerns that you raise in your comment. I also believe, however, that in order to grasp them there is really a need to be much clearer about what the sharing economy is and which activities are part of it and which aren’t. But, the more the sharing economy is associated with an egalitarian and solidaristic language, the more it is difficult to uncover what’s not egalitarian about it. (Just to have an idea, I think this article by Arun Sundararajan is quite revealing of the kinds of worries I have. He argues that there’s no need to regulate the sharing economy because it rests on relationships of trust and solidarity that are likely to regulate themselves.)

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  2. Sara thanks for this post. I am one of those people who wants to see the best in this more horizontal form of exchange but indeed much of the rhetoric in sharing economies simply hides a capitalistic reality. Nonetheless, I'd like to play devil's advocate and say that the reintroduction of this rhetoric, even in hollow, might help people to better understand and question other forms of exchange. This in itself would be positive. Another point to consider is that in contrast with gift-economies that may/may not have obliged reciprocity (see David Graebers' Debt book for his thoughts on this), perhaps sharing economies empower participation rather than oblige it. Horizontality fights what Hannah Arendt described as the greatest threat to modern democracies run by an economic logic - superfluousness. By enabling more people to participate, sharing economies might help strengthen our fragile democracies.

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    1. Anya, thanks very much for this. Let me answer to your comment by “revealing my cards”. I would define myself as a participant in the sharing economy: I have used airbnb, blablacar, ebay and similar “sharing” websites before, and with enthusiasm. So, I have some sympathies for the idea, but
      I have also begun to question what my involvement with these services entails. As you say, the Web 2.0 does seem to be an instrument for empowering participation, but then the relevant question is: how? I find that the discourses about the horizontality that the Internet makes possible are often misplaced (do not forget that online participation is also profoundly exclusionary of large groups of our society like the elderly, the IT illiterates, and those who are too poor to own or have access to a pc). Sometimes, instead, these discourses are gouged out of a libertarian understanding of empowerment, such that the Internet is a place “free” from the control of the “state” or the rules that govern our society (think of hackers for example). Maybe, I have become too critical, but my sense is that thinking of the Web as giving rise to new types of egalitarian movements just obscures the deep ambivalences that characterize its social dynamics

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    2. It might be interesting to think about the internet and the sharing economy as compared to the local economy of traditional villages. I’m not saying that everything is the same, but some things are comparable: absence of direct state intervention, a certain mutuality (or maybe rather: long-term exchange of equivalences, but not a „closing“ of each transaction by handing over an exact sum of money). But maybe also certain kinds of social pressures and the dynamics of reputational effects. Ceteris paribus, such forms of economic exchange can enrich the economic ecosystem, and exist alongside the „official“ economy. On Anya’s point of these practices allowing people to think about alternatives to the currently dominant form of exchanges: I agree that this could be an interesting potential, but there could also be an opposite effect: people mistakenly thinking that these forms are sufficient to change or supplement the current economic system, without asking about deeper structural changes that might be needed…

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  3. Thanks for the post, Sara. Perhaps it is because I'm not very familiar with the examples you mention, but I don't see how engagement in these kinds of practices fosters a more egalitarian ethos. Is the claim (i) that people engaging in sharing economies go on to act in more egalitarian ways in other aspects of their life or (ii) that engaging in sharing economies is itself more egalitarian than engaging in more hierarchical alternative economies?

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    1. Sara, my query was very similar to Tom’s, so I will add it by tagging an additional possibility to what he says here. One thought that occurred to me was whether (some of) these sharing economies add to an egalitarian ethos (perhaps even a reciprocity ethos) through their long-term impacts. It might be that Wikipedia, for example, advances a general message that information should be pooled and disseminated freely, a message that, over time, encourages a people to think about (certain) resources in a more horizontal or collective manner. Such a line would not apply to all of the cases you mention, but perhaps to some. Would this line be one you would consider?

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    2. Hola Tom :-P and thanks for raising this. You are right in pointing out that I have not been entirely clear about what I meant by “egalitarian ethos”. In part, I guess, that’s because the egalitarian rhetoric I was referring too employs it in both the senses you have mentioned. My take on this is that the confusion goes back to the definition of the “sharing economy” being itself too broad. It includes too many activities, many of which have nothing to do with “sharing” – renting is not strictly speaking a form of sharing (I do not “share” my flat with my landlord, I pay him for living in it). Also, I think it makes a big difference whether one considers the production side of the sharing economy or its consumption mode. The production, or commons-based peer production that characterizes all open-access services and products fosters an egalitarian ethos in both your senses (i) and (ii). That is, in many cases, it just represents a more egalitarian form of production (similar to cooperatives) and it also encourages the spreading of these more egalitarian forms of (economic) engagement. A part from Wikipedia, I think that a good example of this is represented by scholars making their research available (e.g. second proofs of articles and books) via Academia.com, Mendeley or similar platforms. This not only allows a more democratic access to such resources, but it also reinforces the thought that knowledge (especially if publicly funded) should also be publicly available.
      On the consumption side, my sense is that participants in the sharing economy are led to believe (often mistakenly) that they are engaging in exchanges that are more egalitarian than traditional (capitalist) ones. This thought, I would say, also leads them to understand their engagement with the sharing economy as part of an egalitarian ethos in your first understanding. That is, through their participation in the sharing economy (and associated egalitarian rhetoric) they are motivated to seek more egalitarian forms of engagement in other areas/aspects of their lives.
      But, without empirical data, also the contrary would be possible. Maybe those who participate in the sharing economy are people, who already act in more egalitarian ways in their daily lives and choices, so that their participation in the sharing economy fosters a (pre-)existing egalitarian ethos.

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    3. Hi Andrew, and thanks for your comment. As you can see from my answer to Tom, my reply is to you is: yes, I would be happy to consider the line of thought you are proposing. But I would add that, being clear about what forms of the sharing economy one is referring to, is crucial. Perhaps it’s clear by now that I have greater (egalitarian) sympathies for commons-based production. When it comes to collaborative consumption, distinctions make all the difference. Take for example two very similar “service providers” in the transportation sector, Lyft and blablacar. While the first has turned the idea of sharing into a new business model (where drivers earn money for the rides they “offer”), blablacar appears like an evolution of the “old college board” where people are put in touch and end up splitting the costs of the journey. There’s no real income that derives from this, and it may well be that this kind of collaborative consumption adds to an egalitarian ethos in the long run.

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    4. Thanks for your post and the interesting points you raise, Sara. I'm very sympathetic to your general skepticism. With regard to the issue of business models and in relation to your replies to Tom and Andrew, the following article makes some interesting points: http://www.shareable.net/blog/sharing-for-profit-im-not-buying-it-anymore
      One of the general problems with the "sharing economy" label seems to be that it conflates, as you say, cooperative modes of production and consumption that are based on sharing costs of production on the one hand, and business models aimed at making profit on the other. Part of the ambivalence that one may feel about models such as airbnb is that the transactions that they facilitate may be motivated by either of these two motives.

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