This is a really interesting perspective thanks for sharing. I don't think anyone intended to create this shadow economy. The founders of AirBnB, TaskRabbit, Lyft, and the like did not create those services with the intention that people hustle full-time. More that it was a stopover to get some cash in an economy where you might need it and a place where cost of living is high. But I very much agree that this piece demonstrates perverse incentives. As someone else posted on here, it's not right if people hustle to the extent of crashing with their friend's parent's cousins every day just so they can list their places on AirBnB.
The other point though, is that I don't think we'll have decades of hustle anyways, because the point of many of these services is to catalyze a culture of sharing that we've lost. Once we gain it back, then Lyft, Uber, and the like (as one example) can shift from drivers that drive around looking for rides (which is hardly sharing so much as a homegrown taxi), into truly picking up people when convenient for their usual routes. Of course, this depends on these organizations not being swayed by perverse incentives themselves.
One thought that occurred to me while reading this was the similarity to how tuition increases by however much the government provides in subsidies.
Perhaps the reason we'll all need to "hustle as a way of life" is because by making it easy enough for everyone to do, everyone's earning potential is increased, and our entire earning potential gets soaked up by higher rents and other limited-quantity commodities we all compete for.
how tuition increases by however much the government provides in subsidies.
Problem with that theory is that much of the increase on college tuitions and fees has come about as the government has withdrawn subsidies (though it's continued guaranteeing loans, and more recently, making them non-dischargable).
Money is a leaky abstraction. What epicureanideal was really saying is that everyone's potential to create things or services of value to other people increase. Assuming people act on this potential and the monetary base stays constant we will get deflation. Of course, Uber and AirBnB are partly replacing taxi rides and hotel rooms - the total amount of rides and rooms for hire will stay more or less constant. So deflation for that reason is unlikely. It's not about the value of money overall.
But what are taxi drivers or hotel staff going to do? They can lower their prices (and thereby limit Uber/ArBnB) or they can do something else. Probably something less enjoyable and/or lower paying, or they would already be doing it. So money moves from professionals to hobbyists and the firms that organize the hobbyist movements. But who are the hobbyists really? Not millionaires, I would bet. The Uber drivers may be hotel staff and the AirBnB hoteliers may be taxi drivers. People who need money, in other words. So lower-class services get less expensive, low-class people get less purchasing potential and the potential go to the middle-upper class people at Uber/AirBnB directly, and to other trades not suited for hobbyisation indirectly.
> They can lower their prices (and thereby limit Uber/ArBnB) or they can do something else. Probably something less enjoyable and/or lower paying, or they would already be doing it.
I'm not really sure that the money-flow works the way you think it does. When I stayed in London last week at AirBnB instead of the hotel which was literally next door, the savings wasn't just hotel labor (which I mostly didn't need). It also meant money that could have gone to the hotel owners (capitalists with multi-million pound investments) instead went to a family which was spending time abroad on a cycle-tour through Germany.
> It also meant money that could have gone to the hotel owners (capitalists with multi-million pound investments) instead went to a family which was spending time abroad on a cycle-tour through Germany.
The money you would have paid to a hotel would have been split between the employees and the owners. For your Airbnb stay, a 6-12% guest service fee [0] and a 3% host service fee [1] was paid to Airbnb, who are analogous to the owners in the hotel situation.
You are perfectly right that you made savings by not paying for services you didn't want, but the "sharing" model hasn't eliminated the role of the capitalist class, which is implied by your post.
To take a much broader view, although our global production capacity has increased markedly, so has our consumption, which ultimately causes prices of these goods to remain relatively high to people on locally average incomes. One might hypothecate that we could maintain our higher production with a significantly smaller global population (and correspondingly lower consumption), which would make real inroads into lowering prices for common goods, but I really have no idea as to whether or not that is true.
Not mostly. Inflation is the rise in price of all goods, because there is (physically or effectively - see Velocity Of Money) more money in circulation. In this case, "increasing our earnings potential" means making people better at making stuff, and that stuff should see a fall in prices, with rises restricted to things we can't effectively (for whatever reason) make more of.
> the point of many of these services is to catalyze a culture of sharing that we've lost. Once we gain it back, then Lyft, Uber, and the like (as one example) can shift from drivers that drive around looking for rides (which is hardly sharing so much as a homegrown taxi), into truly picking up people when convenient for their usual routes
You say this as if it would be a step forward instead of a huge step back. The whole idea of a market economy is that you can trade what you have for what you want, even if the person who has what you want doesn't want what you have. Money is used to facilitate this kind of indirect trade. This system is superior to the system you advocate, wherein, if I have ten pounds of corn and want a painting, I need to find a painter who wants corn.
If the only place Lyft will take me is the football stadium, Lyft isn't a useful app, or a useful anything else. I won't bother to use it even on the rare occasion when the football stadium is where I want to go. The point of a transportation service is that it takes me where I want to go, not that it takes me to a random location depending on which driver I happened to contact, and not that if I want to go someplace out-of-the-way I need to wait for possibly a period of months.
I don't think the GP advocates a barter economy, rather he defines what sharing really is. If 50.000 people go to the stadium, there's a large chance close neighbors go there so there's no point using four cars when they can use a single one. No economic product is generated but our lives are suddenly better, less congestion, less resources wasted, etc. So the sharing platforms should find these synergies, when they exist, and you should purchase a transportation service otherwise.
What they actually end-up doing is competing the incumbent services in a fly bellow the radar illegal operation which actually makes the taxi drivers themselves poorer while diverting most of the extra cash to the ring masters.
Cornoholio has captured my meaning well. Though to be fair, I do partially think that a barter economy in some cases could e better option. To tsotha's point then, I think this is especially true because of the technology that we have.
In the original barter economies, it was difficult to find someone who had something you want in exchange for something you had, but now there are much more efficient ways to streamline that search process.
As to the potential value, to tsotha's question, this is very philosophical. Some will see it as valuable, others will be terrified. For me personally, I like not being too abstracted away from what I'm producing or consuming.
Gambling uses chips because chips are easier to give away than money. Using that logic, at least for me, giving away money is easier than trading something, especially if that something I have created and poured my energy into. The transaction without money then forces me to think about true utility and value, and would greatly discourage conspicuous and contrived consumption.
>This system is superior to the system you advocate, wherein, if I have ten pounds of corn and want a painting, I need to find a painter who wants corn.
That's a good point. The question is how likely it is for new technology to connect you and the painter such that you don't need money.
The question I have is what's the utility of avoiding money beyond tax dodging?
I realised that AirBnB and its ilk had reached the mainstream when I saw an article in my wife's copy of Woman's Weekly, a UK mag targeting middle-aged and older demographic.
Alongside recipe for strawberry flan and knitting patterns: how to use AirBnB to make supplementary income or find a companion.
Supposing we have robot cars in a few decades, it wouldn't be unimaginable to think of a family getting a robot car for their own routine use on a commute, then hooking it up to the new Uber-R robo-car pickup network with a snazzy piece of software. Then it could be used on the network while the family is away on vacations, or asleep at night, or whatever.
Why send a car ahead (wasting lots of energy on moving it) when simply getting an identical one when getting out of the plane should be much cheaper?
I mean, you pay $X for getting that car, and you get $X minus a fee percentage for your own car that gets rented for the same time. And you can get a much different kind (or number) of vehicles than you have at home, which would suit the vacation needs.
I don't think anyone intended to create this shadow economy.
That's one of the conclusions I'm reaching about the economic system in general: much of it isn't so much planned as it just happened (though there have most definitely been very long-lived efforts to influence both how people think about the system and how it functions -- going back to Smith and before).
But I also feel that much of what "just happened" is also less than beneficial through both perverse incentives and externalities.
Your "truly picking up people when convenient for their usual routes" existed for a time in the form of hitchhiking, and survives today in limited forms such as casual carpool arrangements.
Yes I completely agree with you! We plant the seeds of systems, be it legal, educational, political, economic, etc., and then they evolve, grow, and spiral (fueled by their own momentum and interesting side effects) to a state where we often lose control of the system completely, and then have to submit to it, instead of the other way around.
You might enjoy some of Kim Stanley Robinson's talks on YouTube and elsewhere. One point he brings up is the idea that as human systems evolve, they tend to have the elements of the precursor, present, and successor systems in them. So presently, capitalism has elements of its precursor, feudalism, and whatever its successor will be.
With capitalism, we can say that it has very strong residual elements of feudalism. It's as if feudalism liquefied and the basis of power moved from land to money, but with the injustice of the huge hierarchical feudal differences between rich and poor still intact. What is emergent in capitalism is harder to identify, but there may be something to the idea of the global village, also the education of the entire world population, so that everyone knows the world situation and wants justice, that may be leading the way to a more just global society. Seeing and exaggerating these emergent elements is something utopian science fiction tries to do. So the dichotomy is a sort of x/y graph in a thought experiment.
The other point though, is that I don't think we'll have decades of hustle anyways, because the point of many of these services is to catalyze a culture of sharing that we've lost. Once we gain it back, then Lyft, Uber, and the like (as one example) can shift from drivers that drive around looking for rides (which is hardly sharing so much as a homegrown taxi), into truly picking up people when convenient for their usual routes. Of course, this depends on these organizations not being swayed by perverse incentives themselves.
We'll see!