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Thoughts about the sharing economy

Summary:
Recently, Eurostat published data on the sharing economy. Its huge (graph, source: Eurostat). And this digital enhanced sharing economy should be (and is) included in GDP. But the private, non-monetary use of digital GPS apps which enhance your life as they enable you to find your way when, after attending a wedding, you get lost in rural Kent, 2:00 AM (happens…): not. There is a discussion going on if GDP tracks the changes in our life caused by the use of all kind of digital gadgets. It doesn’t. And it shouldn’t. But it should track the rise of the sharing economy – as this is a monetary economy. Aside: if wisely regulated, airBnB is of course important for the sustainability of our societies, as it means that much less hotels have to be built. While it possibly exerts a benign

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Thoughts about the sharing economyRecently, Eurostat published data on the sharing economy. Its huge (graph, source: Eurostat). And this digital enhanced sharing economy should be (and is) included in GDP. But the private, non-monetary use of digital GPS apps which enhance your life as they enable you to find your way when, after attending a wedding, you get lost in rural Kent, 2:00 AM (happens…): not. There is a discussion going on if GDP tracks the changes in our life caused by the use of all kind of digital gadgets. It doesn’t. And it shouldn’t. But it should track the rise of the sharing economy – as this is a monetary economy. Aside: if wisely regulated, airBnB is of course important for the sustainability of our societies, as it means that much less hotels have to be built. While it possibly exerts a benign downward pressure on labour supply, enhancing the negotiating position of labor. But there is nothing new about the sharing economy. In ‘Der Blaue Engel’ high school teacher Immanuel Rath lives in a rented a room. So did high school teacher Antoine Roquentin, in La Nausée. Which might explain their wish to escape – but that’s another issue. Letting and renting rooms or houses is nothing new and has, as it is about monetary transactions also been included in GDP ‘forever’ and it does not matter if rooms are rented via AirBnB. Mapping monetary transactions is what enables us to gauge the (dwindling) labor share or (with a little additional tinkering) to estimate, how much of growth goes to the 1%. But private non-monetary use of apps (or cars, or furniture), interesting and important as it is, is non-monetary. Which is a different ball game. Using cars or GPS apps is what people actually do, ‘real consumption’ if you like. It is what changes life and lives – think of the relation between the rise of car ownership and suburbia or, nowadays, the relation between the rise of precarious jobs (anytime, anywhere) and car ownership (or at least the possibility to use one). But this ‘use value’  should not be included in GDP – as it would mix up the monetary economy with the non-monetary one. Let’s give a not so ridiculous example. Prostitution is part of GDP – as its paid. Eurostat even tracks prices. But does this mean that we also should include normal sex in GDP? Or a hand on a knee? Don’t think so. GDP is and should be (even more than it is today) a monetary metric.

Here, Lola and professor Unrath

Merijn T. Knibbe
Economic historian, statistician, outdoor guide (coastal mudflats), father, teacher, blogger. Likes De Kift and El Greco. Favorite epoch 1890-1930.

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