The shabby economy

by
Frances Coppola
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Yesterday, I attended a panel discussion on the "Sharing Economy" at the Battle of Ideas. Benita Matovska, who describes herself as "chief sharer" of the comparison website Compare & Share, enthused about how the Sharing Economy would build communities, transform capitalism and restore the planet. "It's all about trust," she said.

No it isn't. It's all about money.

Here's what Matovska herself says on the Compare & Share website.

I was trying to book a family holiday in Morocco - when we travel as a family we're quite adventurous, we like to share, meet real people and have those amazing money can't buy experiences....

I spent hours searching through site after site and not finding the unique holiday experience I wanted at a price I could afford. I wanted to go to one single site. And that was my light bulb moment - a comparison site for the Sharing Economy. I wanted to be able to car share at my destination, find sites where I could experience the holiday through the eyes of a local, to contribute to the local economy (I care) and of course to discover hidden vintage markets and cool collectibles.

Last summer - once Compare & Share had launched accommodation - my dream holiday in Morocco became a reality. We stayed in a gorgeous beach house near Essaouira. The highlight was being invited to a rural beach wedding and my daughter and I dancing barefoot at 2 am on floor drums with a room full of Berber women and girls celebrating - a priceless experience!

But didn't it ever occur to her that the "rural beach wedding" she attended was probably created as a tourist attraction to fool people like her into believing they are "experiencing the holiday through the eyes of a local", because, you know, "genuine" local events sell holidays? The natives aren't stupid. They know how to milk tourists for money.

Anyway, more power to Matovska for disrupting the holidays industry, just as AirBNB is disrupting the hotel trade and Uber the entrenched self-interests of regulated taxi services. Travel agencies and car hire firms are badly in need of a shakeup. And if as a result of cutting out the middlemen the "local economies" in tourist spots get more money, that's all to the good. But please don't call this "sharing". It's trading.

Letting your spare room out through AirBNB is not "sharing your house". It's letting a room for money. Working part-time for Uber is not "sharing your car". It's driving a car for money.

Ah, but we all know that AirBNB and Uber are wicked capitalists ripping off the genuine sharers, don't we? They aren't part of the real "sharing economy", which is all about people doing things for each other and sharing unused assets. Apparently no-one does this any more, so we need websites to help us do this.

This would be fine if "sharing" websites actually encouraged sharing. Buying things collectively so everyone can use them. Lending your lawnmower to someone who needs to cut their lawn. Or better, cutting their lawn for them. For free, because they are your friend or your neighbour, or simply because you want to help them.

But by and large, that's not what these "sharing" websites do. They are trading platforms. Marketplaces, where people can sell services and rent out or exchange assets.

Selling seats in your car is not "sharing car rides", it's transporting people around for money. People "sharing" their house with you are letting out their house for money. People inviting you to share their meal are not doing so because they like your company, they are making money from cooking and entertaining. Locals offering you "experiences unlike any other" are not doing that because they love you, they are doing it because you will pay them.

Websites like these are simply Ebay for services. Street traders, online. My friend Mervyn Dinnen calls it the "Who will buy?" economy, 21st century version. Instead of looking out of the window at the street traders, Oliver checks his iPad.

These websites have 21st century marketing, too. People who wouldn't like to see themselves as doing anything as wickedly capitalist as selling describe themselves as "sharers", even though their form of sharing involves charging people. And their customers are also "sharers", even though they have to pay. How to hook the gullible, 2015 edition.

To assist with hooking the gullible, the mix is lightly spiced with genuine sharing opportunities. Matovska's website, in the same paragraph, brings together Tabl and Grub Club, both of which are distributed marketing platforms, with Casserole Club, which encourages people to support needy neighbours by providing food for free. Altruism and trade become indistinguishable. Both are "sharing".

There are also "sharing" sites whose real purpose is to make money by providing intermediary services. BorrowMyDoggy, for example, hooks up dog owners with people who would like a dog but can't have one themselves. But both sides have to pay a subscription. So it's a commercial dating agency. For dog lovers.

Of course, some forms of trade in the "sharing economy" don't involve money. They are barter. You could see Casserole Club as bartering food for friendship, for example. But defining an altruistic enterprise in such terms is a very slippery slope. Any charity could be seen as bartering services for self-esteem or status. I'm not sure this is particularly helpful.

Definitely barter, however, is this.  "Did you know that there is £3.5 trillion of stuff going unused globally?" trills Matovska's website. "Why not start sharing some?" Yes, it's a jumble sale. Or a charity shop. Beloved of churches and the Women's Institute for generations, the "sharing economy" has discovered them. But there's a twist. Let's not sell old stuff for money. Let's just put up a sign saying "Share" and let people take what they want in exchange for dumping their own old stuff.

But charity shops and jumble sales make money for local communities and good causes. How is undercutting them "building communities"? How is dumping your stuff on a table for it to be taken by a total stranger "making connections"? Pardon me, but this is just getting something for nothing, isn't it? It contributes absolutely nothing to the economy, local or otherwise.

Indeed the whole idea of the "sharing economy" seems to be based not on the idea of working together to produce something for mutual benefit (the cooperative principle) but on millions of people scraping a living by selling services and renting assets to each other. How does this add value to the economy over the longer term? There is no production. It is entirely consumption. Recycling is all very well - and we do need secondary markets - but we cannot build an economy solely on sweating existing assets. An economy that exists solely on consumption has no long-term future.

The sharing economy is the shabby economy, the frugal "make do and mend" society where no-one will buy anything unless they absolutely have to and everyone is running down their existing assets. The Victorian novelist Elizabeth Gaskell wrote about this in her novel "Cranford": genteel elderly ladies making a virtue of thrift because they were actually dirt poor but too proud to admit it. It's the hallmark of a society in decline, a society that has nothing innovative to offer, a society so fearful of change that it dare not create anything new. The sharing technology may be innovative, but the economic vision underlying it is stagnation, not prosperity.

And it's an unpleasant vision, too. Sharing is a fundamentally generous act: it is giving goods, services, time, for nothing. But people who are always looking to make money aren't being generous. If everyone is constantly looking for ways to make money from "sharing", we will be not only economically but morally poorer.

Sharing is also an act of faith. You lend someone your car if you trust them not to steal it and not to crash it. If you don't trust them, you either don't lend your car or you charge them to borrow it - in which case you are in a trading relationship with the borrower, not a sharing relationship. Money is an expression of LACK of trust. So the "sharing" economy, in seeking to monetise the generosity that people show towards others, is not "building trust". It is destroying it.

So the "sharing economy" is shabby, unproductive, stagnant, mean and distrustful. I don't want to live in such an economy. I would much rather have Mike Wright's vision of an economy founded on advanced manufacturing and high-tech services, in which skilled people earn high salaries. Mike is an executive director of Jaguar Landrover. He's a filthy capitalist. So am I.

And so, actually, are Benita Matovska and her kind. After all, they don't do this sharing stuff for free, despite their altruistic spin. They make money from it. That's old-fashioned capitalism. Not "transformed" in any way.

Related reading:

The something for nothing society
GDP transactions in secondary markets
Generosity