Grouponomics

May 5, 2011 2:56 PM

The Sharing Economy (via)

BONUS
-Rachel Botsman explains how technology is enabling trust between strangers
-Lisa Gansky talks about the future of sharing
-Grouponomics
-The overpayers' club: we underutilize equity arrangements at every level of our society

We have made an error, from which we need to backtrack, that can be summed up by the word 'commodification'. In the name of a false efficiency, we have struggled to cram everything from corn to cars to financial and legal relationships into the mold of widgets that can be competitively produced, objectively characterized, and then priced in fixed numeraire at arms-length by open markets. If only this could work...

But it can't work. Pretending is killing us. Commodification is a reasonable framework for managing trade in corn and manufactured goods, but is an inappropriate for anything or practice whose quality is revealed over time. Commodities are appropriately priced in money and financed by debt. Goods and services that are not commodities require more complex forms of exchange than what's imagined by an introductory economics textbook. What we must 'buy and sell', most of what matters, is relationships. Managing relationships is mysterious, a difficult problem. But we know more than nothing. Just as commodities are naturally exchanged for debt and money, relationship finance naturally takes the form of equity arrangements, in which cash flows are contingent upon variable outcomes.

posted by kliuless (12 comments total)

What I'd really like is a working Maneki Neko network.
posted by Zed at 3:15 PM on May 5, 2011 [2 favorites]

Another article looking at the symptoms of capitalism?
posted by Slackermagee at 3:46 PM on May 5, 2011

relationship finance naturally takes the form of equity arrangements, in which cash flows are contingent upon variable outcomes.

Christ, what an asshole!



(did I do it right?)
posted by Reasonably Everything Happens at 3:55 PM on May 5, 2011

I thought for a moment this would be about social enterprise. Like when you provide free coaching services for a basketball tournament to benefit a local charity. Instead, it's about a couple of smug assholes who need to pay the mortgage but won't give up their favorite things.
posted by parmanparman at 4:20 PM on May 5, 2011

The sharing economy sounds a lot like renting with better PR.
posted by pwnguin at 4:44 PM on May 5, 2011 [1 favorite]

Zed, not only is that a great read, but ABSOLUTELY DOABLE assuming you begin in a small geographic area. Someone needs to get on top of that and design the mechanics.
posted by leotrotsky at 8:07 PM on May 5, 2011

Wow, surprised at the underwhelmed response. I think these ideas are really on to something and we'll continue to see technology have drastic implications for the meaning of ownership and private property.

For example: a few years ago I was walking down the street, and it occurred to me: there are hundreds of cars passing me, almost all of them with multiple empty seats, many of them going where I am going. What a waste! We all own our own cars because it's convenient, obviously. But technology (smartphones, new websites, etc...) is fast changing what is convenient. How hard would it be to do some kind of realtime, spur of the moment carpooling app? Probably it's already been done.

It's not just "renting with better PR", it's whole new modes of consumption, complete with some very interesting new incentives.
posted by ropeladder at 9:45 PM on May 5, 2011

Zed: "What I'd really like is a working Maneki Neko network."

Cool read. Who knew lolcats would end up changing the world?
posted by InsertNiftyNameHere at 11:24 PM on May 5, 2011

Or instead of inventing some kind of real-time, spur of the moment carpooling app you could have stuck out your thumb and hitch-hiked, ropeladder. Do you pick up hitch-hikers when you're driving? If you don't drive, what exactly would you be sharing if you took advantage of people who do? The good thing about hitch-hiking is that you only need a thumb, rather than an IPad and everyone can afford a thumb.

Talk about new modes of consumption all you like but modern society in general, and cities in particular, are amazingly complex entities relying almost entirely on rule based sharing between strangers. Traffic, commerce and everything else relies on trust and co-operation between people who don't know each other and will probably never meet again.

I'm not quite sure how goods and services would be provided without having value assigned to them and being paid for in some way - you can rely on bread at the bakers because he wants to sell it to you, not because he's your friend - but the idea that our whole lives are 'commodified' simply doesn't square with reality.
posted by joannemullen at 3:55 AM on May 6, 2011

Louise gazed out the window into the streets, and shrieked aloud.
"Oh no! A giant swarming mob! They're surrounding me! I'm doomed!"

I'm never quite sure if Bruce Sterling is self-parodic or just horribly badly written. It's so self-satisfied... Sigh. I genuinely believe in changing the world for the better through technology and yet between them Sterling and Cory Doctorow always leave me wanting to get into a position of power, just so I can abuse it.
posted by lucien_reeve at 4:05 AM on May 6, 2011 [2 favorites]

joannemullen: And the bad thing about hitchhiking is that it has become socially unacceptable, because for whatever reason that trust has broken down. My parents used to do it across the country; I have never even seen a hitchhiker, let alone tried to hitchhike. I have, on the other hand, used rideshares on craigslist plenty of times--but when I tell this to my friends they seem surprised and sketched out. Room for improvement.

Sure, cities (and societies in general) are complex entities that already rely on trust. That's the point: our economics ignores this. The other point is that technology (like craigslists or ebay or all kinds of networks we haven't imagined yet) is helping us develop trust through new means.

And nobody is saying that sharing can't have value. (at least I'm not; I didn't read all of the articles) I think what "commodification" in the bonus quote is referring to is the bought/sold one-off product market. The dichotomy I think is sharing versus ownership, not sharing versus prices.
posted by ropeladder at 6:30 AM on May 6, 2011

ropeladder: "The dichotomy I think is sharing versus ownership, not sharing versus prices."

Ok, so it's sharing for profit.... renting? Renting is a great way to put resources to work efficiently of course. People have made such agreements for ages. If you want to generalize a lot, whether you buy or rent depends on transaction costs. Now granted, a lot of economic textbooks and formulas gloss over transaction costs, but it's quite the leap to say the economy itself ignores sharing for profit.

There's a number of factors in transaction costs besides the taxes Louise from Stirling's story points out, and a lot of them do boil down to trust. If you decide to rent on demand, you trust that someone will be there to rent the thing, and they trust you'll return it and not damage it. If you decide to buy a book on ebay and resell it when you're finished, you trust that you won't be stiffed.
posted by pwnguin at 2:42 PM on May 6, 2011