August 17, 2015
This morning in a small Croatian village my family partook in something called ‘Radna Akcija’ (Work Action). This is a throwback to communist times in Yugoslavia when everyone in the village was expected to “muck in” and help build something for the benefit of the village. In the old days, this may have been building a road, helping extend the water supply, digging the channels for a new sewage system or simply cleaning up after a village party.
This type of communal activity glued the socialist system together and older villagers wax lyrical about the sense of community and the bonds these Radna Akcija initiatives created. The people are proud of the infrastructure that they built for themselves. As a result, they keep up the tradition every month. It’s like a turbo form of our own Tidy Towns.
Interestingly, we know that humans like to share and collaborate.
The ability to share, inform, exchange ideas and therefore organise through language is what propelled humans into poll position in the animal kingdom.
The entire idea of storytelling is the notion of sharing experiences. Where do you think the great Irish expression, “Come here till I tell ya” comes from?
We like to involve others in our world, to talk and exchange ideas. A sense of humour is nothing more than sharing your own funny ideas and hoping to get a laugh. Humans have always shared ideas and we have always collaborated for the greater good.
The Yugoslavian communists exalted a greater force – the notion of the moral superiority of the collective over the individual. But this collaborative model wasn’t conceived by Karl Marx; it goes right back to Aristotle, who first observed that “the whole is greater than the sum of the parts”. When people collaborate and share, there are enormously positive things that can come from such endeavours.
As I watched all this collaboration in Dalmatia and the use of people’s time, abilities and tools, I thought of the recent news about Airbnb in Ireland where the Revenue are in cahoots with Airbnb to tax the income people are getting from renting rooms, flats and houses.
The news underscored just how many people are involved in the likes of Airbnb right now. It seems that in the past year Airbnb has grown very quickly indeed. I know loads of people renting out rooms and apartments on Airbnb, and I have stayed in two Airbnbs this year alone.
At its essence, Airbnb isn’t so different from what the villagers were doing this morning, except it’s a capitalist version.
The thousands of Irish people renting out rooms are an example of a new form of economy – the sharing economy.
The sharing economy is going to change the way we live because the sharing economy offers society an opportunity to use stuff that we are wasting – such as an unused room – and, at a personal level, the incentive is income in a cash-strapped economy.
Crucially, this potential income isn’t something new, it’s just converting a wasted resource into cash. What can be more attractive?
An unused resource is a wasted resource.
Karl Marx understood that, at its heart, the consumer economy is grotesquely wasteful, but his solution, rather than being Aristotlean, was brutalist.
Communism preferred confiscation over collaboration and, as a result, ended up with the truly bizarre situation that the whole was actually less than the sum of the parts because lots of the parts were seized and sequestered before they could be shared.
All this is now changing. The mass use of the internet – all three billion of us internet users – has opened up a new way in which the waste of individual consumption can be shared and reused over and over.
This will profoundly affect income, GDP and living standards.
In the past we could only share with people we knew. Now with platforms like Airbnb – as well as eBay, Uber and Kickstarter – we can create second-hand or shared value and we can generate income out of nothing.
The new sharing economy, exemplified by Airbnb and Uber, will be transformative. We are moving from individual consumption towards something that is called collaborative consumption.
To get an idea of how much waste individual consumption generates, think about your car.
Did you realise that on average in the developed world a car will be idle for 92 per cent of the day and night? This is a monumental waste and a huge financial and environmental cost to all of us.
Is it any wonder that Uber is exploding all over the world given that it turns the unused car into an income stream?
The sharing economy isn’t just a new form of taxi driving or a glorified version of the old-fashioned B&B. It is going to become an entire economic ecosystem built around the sharing of human and physical resources.
It includes shared creation, finance, production, distribution and trade. At its heart, the sharing economy could become the core of environmentally friendly capitalism driven by the three Rs: recycle; reuse and repair.
The Revolution is already here.
A report in April by PricewaterhouseCoopers said that five sectors in the sharing economy could see their combined global revenue jump from $15 billion to $335 billion by 2025 at the current rate of growth.
The areas referred to were: travel, car-sharing, finance, the jobs market and music- and video-streaming services.
PwC also cited one of its surveys as showing that 18 per cent of adults in the US have participated in the sharing economy as a consumer, and 7 per cent as a provider.
The future will be a shared one. Fancy it? Why wouldn’t you?