29 May 2014
Developing the sharing economy may be a key step towards building a more inclusive and sustainable future
Business leaders, government officials, civil society and academics gathered in Paris earlier this month for the annual OECD Forum. The question up for debate this year was how to make our economies more resilient and inclusive. Given the organisation’s cold-war legacy (it was created as an economic brother to NATO) and reputation as a hotbed of neoliberalism, the tone of debate was often surprising. Mainstream economic thinking was out; new and progressive thinking was in. Indeed, some sessions wouldn’t have been out of place at a World Social Forum, with concerns about inequality, sustainability, and wellbeing frequently at the centre of discussions. OECD Secretary-General, Angel Gurría, opened the meeting by calling upon everyone to ‘imagine a new type of growth focused on the wellbeing of people, on the benefits of equitable societies… (and on) different policies in favour of human progress’. Interestingly, for many speakers the answer to this challenge seems to lie in promoting greater sharing and caring in social and economic life.
The idea behind the sharing economy is simple: most of the time we don’t need to own something to get what we want from it. You need a hole in the wall, not a power drill (astonishingly, the average power drill is used for just 6-13 minutes ever). The environmental impact of the ownership economy is obvious: 177 million tonnes of waste are generated each year in England alone. Much of this ends up in landfill, polluting the land and releasing harmful methane into the atmosphere. Mercifully, the EU’s Landfill Directive should soon start to mitigate some of the problem. But, even so, the argument is that we can’t carry on like the proverbial ostrich – head buried deep in the landfill: our consumption of ‘stuff’ needs to be reduced.
Numerous social sharing enterprises have sprung up in recent years to reduce consumption and ownership by connecting citizens with other people’s stuff: from empty car seats and bedrooms to lawnmowers and fondue sets. The environmental benefits of the sharing economy (or ‘collaborative consumption’, as it is more formally called) are fairly evident: less ownership means less use of resources and less generation of waste and pollution. The question is: can such initiatives promote any lasting change?
Critics, like the New York’s Kevin Roose, are quick to point out that the rise of sharing is mostly a sign of desperate times: diminished and insecure incomes have forced people to monetise ‘their stuff and their labor in creative ways’. Yet, although many sharing initiatives involve monetary exchange, financial reward can hardly be the main motivation for all. Bill from Bradford is unlikely to be building his retirement plans around his weekly drive to Leeds: spare seats go for only £4 each! On the other hand, someone renting out a room for £80/night is probably very much motivated by financial gain.
What this reveals is an emerging struggle between two sharing paradigms: one commercially-oriented and the other more community-oriented. The first is more appropriately labelled the ‘renting economy’; this is oriented towards profit and sits very comfortably within dominant economic structures (and is thereby highly susceptible to corporate co-option – as seen in Avis’ purchase of Zipcar). The second is oriented more towards solidarity and may be engaged in by those seeking to disrupt an individualistic and materialist economic system. What is more, for those keen to see this alternative paradigm prevail, there are reasons to be optimistic. The field of ‘neuro-economics’ is generating insights into how ‘mental training’ can result in brain changes that heighten the influence of capacities like compassion and empathy in economic decision-making, and ultimately result in more ‘pro-social’ behaviour. A team of Swiss-based researchers is exploring how this can promote a shift towards an economy centred on ‘care’ – something more cooperative, pro-social and sustainable.
But should we really be trying to get homo economicus into the lab for his mental re-training? Is a sharing and caring economy really such a good idea? Critics suggest that the informal sharing economy is dangerous since it lies beyond the reach of public regulators responsible for protecting consumers and workers. Who, after all, is responsible for ensuring your host’s kitchen is sufficiently clean, or that car-pooling drivers aren’t ‘sacked’ on the basis of poor ratings? In most cases, of course, no-one is responsible.
Others argue that this informal activity syphons taxable income away from registered businesses like taxi companies and hotels, and thereby strains the public purse. Fair point. But to reject the sharing economy on these grounds is surely to throw out the baby with the bathwater. There is no necessary reason for sharing to occupy an informal (and unregulated) space within the wider formal economy. Lessons here can be drawn from the Korean experience. While the UK has seen its ‘sharing infrastructure’ diminish in recent years (think libraries, local museums and other public cultural services), the city of Seoul has been transforming itself into a ‘Sharing City’. This has been used as an opportunity by the metropolitan government to create jobs, minimise waste and recover ‘trust-based relationships’.
Fostering and regulating social sharing enterprises ensures that this economic activity functions in the public interest, rather than for the private benefit of a few. It also ensures that all citizens – rather than just the ‘bourgeois bohemians’ – have the opportunity to share cars, books, tools, housing, meals, clothes and ideas. For Seoul’s Mayor, Park Won-soon, sharing is more than just a feel-good exercise. Instead, it is an essential element of transitioning to a sustainable system. This sort of leadership and imagination is precisely what’s required to make our economies more resilient and inclusive.