A taxi passes by an advertisement for the Uber car and ride-sharing service.  Picture: REUTERS
A taxi passes by an advertisement for the Uber car and ride-sharing service. Picture: REUTERS

THE so-called sharing economy is the new utopia taking form on the extreme fringes of the political left in France. It provides anti-globalists, environmentalists, a few Socialist Party renegades, and what’s left of the communists with a new tool to fight capitalism.

Its somewhat esoteric designation suggests it is the result of a long process of theoretical reflection. It already has its thinkers, its books and its first Nobel Prize in Economics with Elinor Ostrom.

Like all bad ideas, it has every chance to succeed. But what is it really about?

The initial observation is indisputable. The advent of the internet and new technologies has changed relations between individuals. Whether it’s housing, cars, household equipment, commuting, access to knowledge, personal assistance; in other words, material goods or intangible services, everyone can share or exchange with everyone else.

What are the — once again indisputable — consequences of this sharing economy? By replacing individual purchases with common usage, expenditures are reduced.

We consume differently, less in the merchant sense of the term, more as citizens. Services offered on open platforms are replacing, at lower costs, market commodities.

Based on this fact alone, private property is bound to diminish in favour of a more co-operative variation. Meanwhile, market shares, in the traditional meaning of the term, are dropping compared to direct exchanges, which if correctly balanced are similar to cashless barter.

So far, everyone can be happy with such a description. But the ideological extrapolation soon pushes us over the line. Less private property, less demand, less money; the most determined partisans of the sharing economy think they can destroy the three pillars of the capitalist economy.

They foresee a drop in productivity and a shift to a model of sustainable growth; the erosion of the market sphere in favour of moneyless exchange. It is here that we step into a dangerous utopia — based on a double error.

Free goods, by definition, have a cost (the people producing them need to be paid), and they probably provide common satisfaction, but no monetary revenues.

A costless economy is funded by the producers of market wealth — those who make the money.

The two elements of the economy, market and nonmarket, must grow side by side. A country’s national revenue is the compensation for its creation of market wealth. This is why true wealth potential is measured through the market output of the gross domestic product.

All the rest (spending on social protection, administration, local authorities, national education, the "sharing" organisation) — the nonmarket economy as a whole — relies on a gigantic redistribution.

So, do these new anticapitalist idealists really believe that people are ready to swap more collective satisfaction for less individual monetary income?

The second error is more blatant. The apparent free-of-charge nature of some of the largest platforms (Google, Facebook, Apple) cannot hide the fact that their founders are unquestioned champions of digital capitalism, with gigantic market capitalisations. That’s because selling the information of millions of customers to third parties can generate a whole lot of money.

Besides, I don’t believe we are moving to the large-scale generalisation of direct exchanges, of barter with no intermediaries.

Even though they may be located in the same area, the supplier and the customer exchanging products have different interests. The former wants to be paid for his service; the latter wants it to be delivered with an appropriate level of quality.

For this reason, merchants have always appeared in history at the same time as new kinds of exchanges were born. A useful intermediary, he profits from the guarantee of the efficient execution of a transaction.

The sharing economy will keep growing. This doesn’t mean the end of capitalism as the sharing economy ideologues hope, but its transformation into new forms.

No one will be able to stop digital entrepreneurs from investing in profit-making platforms that will help them make a fortune.

In brief, the choice isn’t between the general practice of car-sharing, which is supposedly selfless, and the profit-making motive behind a start-up such as France’s BlaBlaCar. Rather, it’s about knowing, in every industry, which is the right BlaBlaCar to bet on.

New York Times

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