The Chronicle Review

The Sharing Economy Comes to Campus

Al Seib, Los Angeles Times via Getty Images

Ride services like Uber can enable "micro-entrepreneurship," a new book says.
January 29, 2017

No economy ever achieves an absolute separation of commerce and cooperation. Market traders have always needed some basis on which to trust one another, be that recommendation, regulation, or repeat interaction. In his new book, The Sharing Economy, Arun Sundararajan, a professor in New York University’s Stern School of Business, argues that the border between market exchange and social reciprocity is becoming more porous than ever.

The term "sharing economy" captures a spectrum of combinations, from the most co-operative (think Couchsurfing, in which people take in guests without any money changing hands) to the most commercial (think Uber), with various new forms of peer-to-peer rental agreements and asset-pooling in between (think Airbnb). Sundararajan sums things up with a wonderfully intriguing proposition: "Some of the shifts we will see in capitalist exchange over the coming years will reflect a reintegration of gift economies into a system that has become inefficiently impersonal and commercial."


The Sharing Economy By Arun Sundararajan

(MIT Press)

Gift economies involve forms of exchange that are based on memory, trust, and reputation. For example, I am willing to feed my neighbor’s cat because she has done the same thing for me. Such economies tend to prosper in close-knit communities, but digital technology broadens their scope. The idea of capitalism becoming inefficiently commercial sounds like an oxymoron. And yet within this term lie both latent hippie idealism and hard-nosed capitalist realism.

The idealism derives from the growing social connectivity that digital platforms are helping to weave. Sundararajan has high hopes on this front, suggesting that the blurring between the commercial and the gift in this new economy will "create new social contexts to replace the ones Durkheim lamented we lost through the Industrial Revolution." The idea of the commons, which existed in the form of shared agricultural land in preindustrial times, is revived by platforms such as Couchsurfing.

Yet The Sharing Economy is not simply another paean to the collaborative potential of the internet. Sundararajan claims that our economy can become both less commercial in nature and more efficient at the same time. How does this argument work?

First, it’s important to note that Sundararajan (unlike many who have sipped the Bay Area Kool-Aid before him) is celebrating a new model of capitalism, and where there is capital, so there is exploitation. His argument is that we often fail to sweat our assets and ourselves as hard as we could, because we fail to recognize the full range of possibilities available to both. Just as Napster demonstrated that there was untapped value in all the music scattered around the world on hard drives, Airbnb demonstrates that there is untapped value in all those empty bedrooms. The internet may not add to the stock of productive capital, but it increases the impact of the capital that already exists.

Achieving these benefits requires a whole new way of viewing economic activity. Economists, regulators, and common sense have tended to classify people and things in terms of the market that they’re in. A plumber is someone who does plumbing and gets tax relief on the equipment he needs in order to do it. A home is where one lives, not where one works. And so on. Everything from taxation to consumer protection to labor laws to the calculation of GDP depends on these traditional market-based classifications, all of which Sundararajan believes are now harmfully constrictive.

The Sharing Economy implores us to consider the full range of uses that a car, building, or piece of equipment might offer. What’s much more challenging, however, is to do the same for how we look at ourselves. The toughest injunction of "crowd-based capitalism" is that we abandon our traditional assumptions about our own professional identities.

Sharing-economy platforms enable new forms of "micro-entrepreneurship," with TaskRabbit, Uber, and Etsy allowing people to earn money in exchange for individual chunks of labor time. Thanks to these platforms, "work can take place in … increments as short as a minute or two," Sundararajan argues. But to exploit this new labor market properly, we need to view all work as entrepreneurship. Out go clear boundaries between paid and unpaid work; in comes an economic identity that is constantly shifting among employee, contractor, and volunteer. There is no regular 9-to-5 under these conditions.

When a car is constantly shifting identity among consumer good, capital asset, rental service, and community asset, the main challenge lies with the regulator grappling with this new fluidity. But when a worker is expected to shape-shift in the same way, it represents an existential problem for the individual concerned.

What kinds of new psychological strains will we confront in an economy that requires us to move seamlessly from one market to another? We are heading toward a society in which nothing and nobody can ever sit idle. Every material thing and every moment in time is a potential resource, ready to be exploited.

Sundararajan is optimistic about the merging of commerce with community. But this process works both ways: Organizations and associations that are traditionally somewhat insulated from markets (such as universities and professions) will be invaded by the entrepreneurial injunction to disrupt and reinvent.

Universities have already seen this with the rise of MOOCs and freelance teaching contracts, not to mention essay mills. Given that much of this has been achieved without the aid of sharing-economy platforms, there is presumably still a great deal of untapped potential in exploiting both paid and unpaid time. How much spare capital and spare time may be underutilized across campuses? What other tasks or spaces could be "shared"? Empty library desks? Could reading for pleasure or curiosity become viewed as wasteful, and more efficiently farmed out to freelance researchers who can mine books for relevant information? Idleness in all its forms will come under scrutiny.

Sundararajan might reply that it is easy to defend idleness when one already earns enough to enjoy it. Perhaps we should think of those on the fringes of the labor market who sorely need additional chunks of work, and ideally need them to fit around family commitments and other employment. By this thinking, academics and professions are like cartels, which insist that knowledge can be accessed only via tightly controlled, old-fashioned gateways.

But then the argument for ubiquitous, platform-based entrepreneurship becomes circular. On the assumption that employment is already precarious, and social security already dissolving, the case for new digital labor markets and gift economies becomes compelling. For those who’ve already lost any coherent career structure or work-life balance, platforms may enable them to wrest back a modicum of control over their own working lives.

Given how Silicon Valley is at the forefront of efforts to disrupt stable institutional structures, it is difficult to escape the conclusion that "crowd-based capitalism" is, as Karl Kraus said of psychoanalysis, the disease for which it claims to be the cure.

William Davies is a reader in political economy at Goldsmiths, University of London. He is the author of The Happiness Industry (Verso, 2015).