The "sharing economy” is sometimes seen as a fairer and greener alternative to capitalism and sometimes as its newest and most efficient form. Please provide arguments for and against each perspective and state your personal opinion on its contribution to sustainability!
The sharing economy appeared with the development of sharing platforms on internet, such as Craigslist or Ebay. The exact definition of sharing economy is complex because of its novelty and its multiple shapes. We can however draw several points that can make a common base for this moving concept. The first one is the development of internet and the fact that it allowed the apparition of online platforms. The second one is the usage of an idle capacity (e.g. the empty places in the cars), which can be possibly monetized (Frenken et al., 2015). The sharing economy allows a new consumer-to-consumer interaction, and a temporary access to physical goods. Capitalism is defined as the economic system where capital goods are held by corporate or private ownership, where production, prices and private decision determine the investments, and where competition in a free market determines the distribution of products.
In this essay, we will discuss the positive and negative impacts of the sharing economy, by comparing this new kind of economy with the actual capitalist system. In a first part, we will first provide arguments to show that the sharing economy can be seen as a fairer and greener alternative to capitalism. In a second part, we will see how the sharing economy may be seen as the newest and most efficient form of capitalist. Then we will state a personal opinion about the contribution of the sharing economy to sustainability.
I.The sharing Economy is a fairer and greener alternative to capitalism
In this first part, we will see in what the Governance, Social and Environmental aspects of the sharing economy are able to change the basis of capitalism. Stokes and al. assume that “the idea of collaborating in new ways to consume and to produce” is at the,core of collaborative economy. In this way, the sharing economy opens the economy to alternatives of capitalism, which is more focus on the monetization than on the sharing. In the environmental scope, the sharing economy is widely seen as a greener alternative to the consumption logic of the actual market. This assessment is based on the fact that some goods, like cars and houses, offer an idle capacity that can be used for free (or few money), which reduces the amount of used good and maximizes the usage of each product’s capacity.
A recent study showed that carsharing participated to a measurable reduction in greenhouse gas emissions. A similar study, conducted for Airbnb, showed that “living like a local”, is better for the planet than choosing an hotel, because of the significative reduction of carbon footprints, waste, energy consumption and so on. With the sharing economy, consumers will less depend on ownership. Botsman and Rogers (2010) assess that consumer will have cheaper access to products by lending or renting them from the platforms: they won’t need to purchase new products. Thus, there will be less goods produced in the market: those spared goods will be as much spared energy consumption and carbon footprints. In a social point of view, the sharing economy can be seen as a system more human and less competitive than the capitalist system.
Capitalism encourages a free market and the competition between actors: a system based on sharing and open access can disrupt this competitive atmosphere. In the GNU Manifesto, Richard Stallman defines the rules of the first open source communities: he puts knowledge and sharing above competition and profit. Juliet Schor says in her work Collaborating and Connecting : the emergence of the sharing economy, that there had been a historical tendency between people not to share outside their own social networks. Sharing was only of family, neighbours or friends, in whom people could have trust. The sharing economy introduces new ties in the actual system, creating more social connections. Paolo Parigi says that the website Couchsurfing had created new friendships. The sharing economy tends to reduce the social stratification, and to increase social mixing. In the point of view of governance, the sharing economy may also open some new perspectives, alternate to the capitalist paradigm. Sharing economy is a way to reinvent the democratic system, as stated in Internet et les mutations des démocraties, by opening new virtual place where the citizen debate can be open. As stated by Grégoire Postel-Vinay (id.), the sharing platforms are numerous and they multiply the needs of regulation. The regulation is made by peer review and self regulation, as well as from moderators. The open source experience showed that non-hierarchical relationships between users were the basis of the sharing communities. The capital owners are not necessarily the decision makers: with projects like online crowdfunding, investments can be outside of the traditional financial institutions. As consumers can also be producers, the relationship between states, governments and consumers is renewed (Botsman and Rogers, 2010). Consumers become prosumers. Some governments are trying to integrate this economy, like the example of Ecuador government who launched an initiative based on open production, open networks and sharing at the scale of the state. Such initiatives are something new compared to the capitalist mind, which is based on free market and competition. In this way, the sharing economy can be seen as a fairer and greener alternative to capitalism. But the sharing economy is evolving in a mainly capitalist system, and tends to be the prey of predators like corporates.
II. The sharing Economy is the newest and most efficient form of capitalism
Under its promising aspects, the sharing economy can also be a newer and more efficient (and perverse) form of capitalism. In his work Le Nouvel Esprit du Capitalisme, Boltansky assumes that capitalism is taking the arguments of its opponents to make them its own arguments. In this precise case, the sharing economy that can be seen as a green and anti capitalist movement, has been invested by capitalism, to make it the most finest way to create innovation and profit. In one hand, the sharing economy can be sustainable, but only at a local scale. In the conclusion of their work, Frenken and Schor assume that “with limited network externalities, there is scope for alternative platforms”.When it comes to the global scale, the sharing economy is a great opportunity for corporates and the capitalist market. Sharing platforms are creating new transactions that were not possible before the internet, and the transaction costs are reduced. Indeed, the cost of the transaction of the information was huge before internet.
The transaction costs are not the only gift given by the sharing economy to the capitalist machine : with the sharing economy, innovation becomes more profitable. As suggested by Rachel Botsman in the Harvard Business Review article “Sharing’s not just for start-ups”, the sharing economy is a nest to create innovation in the places where the actual capitalist system fails to create it. Indeed, the idle capacity or the underutilised assets, possible source of profit, is unlocked by the sharing economy.In the environmental point of view, experts say that despite its footprint decreasement promises, the sharing economy had not proven yet its real green impact : apart from car sharing, where little reduction in CO2 emissions had been observed. The real green side of the sharing economy seem to be an illusion: as Frenken an Schor assumes it in Putting the sharing economy into perspective: “the sharing economy is creating enormous amounts of wealth, and that it has been using a socially-progressive feel-good rhetoric to do so”. The fact is that green is profitable; as Rachel Botsman states in “Sharing’s not just for start-ups”, big corporates entered the sharing economy market: Avis bought Zipcar $500 million, Google placed $125 million in the sharing platform Lending Club, and GE put $30 million in the website Quirky. Platforms like to be under the banner of the “sharing economy”, because of the green and positive value of sharing. (Frenken and Schor, 2017).
The sharing economy represents an enormous potential market that is conveted by big corporates. On the social point of view, the sharing economy is creating a new competition system, as seen with the rating system. In the peer-to-peer platforms like Airbnb or Ebay, the platforms needs to encourage the transactions: it forces prosumers to meet more and more strangers, to increase the probability of a transaction. The competition is increased, making the capitalist atmosphere more important. What’s more, this competition tends to create gaps between the users of the platform, between the good sellers who gain more and more and the bad sellers who tends to be rejected from the transactions (Schor, 2014). The real inclusiveness of the system had not yet been significatively proven. On the contrary: Frenken and Schor deplores “the mostly white, highly educated, able-bodied urbanites” which are the main population of the sharing platforms. The platforms are either exclusive, or totally anonymous, as the “increasing willingness to share with an anonymous crowd” (Frenken & Schor, 2014) of the users proves it. One of the main motivation of the people remains the saving and the earning of money, sometimes not even using the comforting umbrella of doing a good action for the planet or the society. Sharing had been since long in the center of human societies, and it seems that the new aspect of this market is only a marketing effect, most welcome in a system where innovation creates profit. From the governance point of view, the self-regulation we told about in the first part, which was the apanage of open source communities, tends to have pervers effects when applied to some sharing platforms. As stated by Frenken and Schor, the apparition of the sharing economy has three main consequences on the economy: negatives effects on the concerned markets, externalities on third parties, and unequal distribution of the profits made. (Frenken and Schor, 2014). The algorithmic management of the peers creates a new mechanical regulation structure.
A lot of platforms practice sharewashing, which is the risk shifting of platforms owners onto employees under the guise of “sharing”. The sharing economy is a good way for actors to avoid the taxes and regulations usually operated in the “usual” version of the business (e.g., Airbnb is a tax free version of an hotel). Rachel Botsman suggests that corporates must be inspired by sharing economy startups to renew their way of governing and innovating. In other ways, the actual capitalist may find it finest forms in stealing the good manners of the sharing economy. III. My personal opinion on the contribution of sharing economy to sustainabilityThe sharing economy may open a whole perspective for the future of communities, but this system can work only with mature humans. Airbnb has turned to an huge and fancy capitalistic platform (with a lot of incitations to buy, more numerous than the incitations to share). It seems like a big reproduction of a capitalist system, with a green and fancy mask. The possibility of an opportunistic behaviour (e.g. the acquisition of a new house and its rent on Airbnb, in order to avoid taxes and regulation), even with trust indicators like reviews and rating, is screwing all the possibilities of trust in the system. Yes, the sharing economy, extended to a global scale, is the newest and most efficient form of capitalism. And the sharing economy itself had been proven not to be sustainable in a global scale, as capitalism ate and digested the whole thing. Yet, in a local scale, everything is possible.