经济事务研究所-共享经济：陷阱与承诺（英）-2021.10-171正式版

StheHARINGECONOMYitsPITFALLSandPROMISESMICHAELC.MUNGERTheSharingEconomy:ItsPitfallsandPromisesTHESHARINGECONOMY:ITSPITFALLSANDPROMISESMICHAELC.MUNGERFirstpublishedinGreatBritainin2021byeInstituteofEconomicAffairs2LordNorthStreetWestminsterLondonSW1P3LBinassociationwithLondonPublishingPartnershipLtdwww.londonpublishingpartnership.co.ukemissionoftheInstituteofEconomicAffairsistoimproveunderstandingofthefundamentalinstitutionsofafreesocietybyanalysingandexpoundingtheroleofmarketsinsolvingeconomicandsocialproblems.Copyright©eInstituteofEconomicAffairs2021emoralrightsoftheauthorshavebeenasserted.Allrightsreserved.Withoutlimitingtherightsundercopyrightreservedabove,nopartofthispublicationmaybereproduced,storedorintroducedintoaretrievalsystem,ortransmitted,inanyformorbyanymeans(elec-tronic,mechanical,photocopying,recordingorotherwise),withoutthepriorwrittenpermissionofboththecopyrightownerandthepublisherofthisbook.ACIPcataloguerecordforthisbookisavailablefromtheBritishLibrary.ISBN978-0-255-36792-9(interactivePDF)ManyIEApublicationsaretranslatedintolanguagesotherthanEnglishorarereprinted.PermissiontotranslateortoreprintshouldbesoughtfromtheDirectorGeneralattheaddressabove.TypesetinKeplerbyTTProductionsLtd&CONTENTSAbouttheauthorAcknowledgementsSummaryviiviiiixFiguresxii12Introduction1Revolutionsanddisruption4TransactioncostsandcommodifyingexcesscapacityOwning,rentingandtheꢀcommodificationofexcesscapacity810Costintwo-sidedmarkets:whoꢀisbuyingandwhoisselling?173Platformsandownership24SellingtrustraisestheproblemofantitrustPlatformsdon’tsellstuffDecentralised‘retail’ownershipistooexpensiveWikipediaandtoollibraries:beyondrental3336384245Commodifyingexcesscapacity46Middlemen:sellersoftransactioncostreduction55emiddlemanplatformeconomy59vCONTENTSBacktotransactioncosts:whyownershipistooexpensive64678Ride-sharing72Uber:theoriginNotataxicompany?Surgepricing747677Problemswithdisruptivetechnology88Sabotage:whentherefereeisalsoaplayerAdifferentexample:‘Uberbutforplanes’Fairness,exclusionand‘socialcredit’91102109Conclusion114ChangeasaconstantSaltationSeparationegeneralanswer:permissionlessinnovationFinalwords:thenextthreecrises116119121123128ReferencesIndex137147152AbouttheIEAviABOUTTHEAUTHORMichaelMungerisaresearcherandadministratoratDukeUniversityinNorthCarolina.HeisaseniorresearchfellowattheIndependentInstituteinOakland,California,andattheAmericanInstituteforEconomicResearchatGreatBarrington,Massachusetts.HehastaughtatDartmouthCollege,theUniversityofTexas,andtheUniversityofNorthCarolina.Hispublishedresearchhascoveredspa-tialtheory,politicaldecision-makingandtheproblemofvoluntaryexchange.Hismostrecentbook,IsCapitalismSustainable?,waspublishedin2019bytheAmericanIn-stituteforEconomicResearch.HeisapasteditorofthejournalPublicChoice,aswellasapastpresidentofthePublicChoiceSociety.HisfirstprofessionalpositionwasasastaffeconomistattheUSFederalTradeCommission.HereceivedhisPhDineconomicsatWashingtonUniver-sityin1984.viiACKNOWLEDGEMENTSisprojectwassuggestedbyJamieWhyte,andwasre-workedbyRichardWellings,bothoftheIEA.Mythankstothemfortheproposal,andtoSyedKamall,alsooftheIEA,forseeingthingsthrough,whenthereweremanycompet-ingdemandsonhistimeandresources.anksareduetoCurtisBramforresearchassistance;thanksalsotoJonWainwrightforconvertingthemanuscriptintosomethingresemblingworkableprose.NumeroushelpfulsuggestionsandimprovementsweresuggestedbyDrewMillard.Allofthosewhodeservecreditforwhatisdonewellhereareblamelessforwhatisdonepoorly;forthat,Iamsolelyresponsible.eideasexpressedhereowecredit,butnoblame,toseminarparticipantsattheUniversityofColorado,Okla-homaStateUniversity,theUniversityofTexas,andTrinityCollegeintheUS,aswellastheInstituteforLiberalStud-iesinCanada,andtheANUandNotreDameinAustralia.Finally,thankstoDonnaGingerellafortoleratingmyneedtospendfarlongerthanwasplausibleworkingonthede-tailsherein.viiiSUMMARY•Platformsareinstitutionsthatsolvetheproblemsofdeliveringagoodorservice,ofclearingpayments,andofcreatingtrustbetweenbuyerandseller.•Inthepasttwodecades,thephysicallocationsinwhichtransactionstakeplace,suchasthecitymarketorshoppingcentre,haveincreasinglybeenreplacedbyonlineplatforms.eplatformrevolutionisaneconomicrevolutionasmomentousastheNeolithicandIndustrialRevolutions.•eplatformrevolutionisdeliveringreductionsinthetransactioncostsofrenting.Newanddifferentwaysofpartitioningshort-termownershiphaveemerged.esharedfeatureofthesemarketsisthattheyenableprofitablemeansofcommodifyingexcesscapacitythatuntilnowcouldonlybewasted.Wepayforstoragetwice:wastedspace,andforgonecapitalvalue.•eplatformeconomyismakingmoreintensiveandefficientuseofresourcesthatareotherwiseidle.Inthelongrun,theconsequencewillbeasharpincreaseinthedurabilityandaveragelifeofthoseresourcesastheyarereplaced.•Bymonetisingthedeadweightlossofqueuing,newsoftwareplatformsarecapturingmuchofthevalueixSUMMARythatwouldpreviouslꢀhavebeenwastedbꢀthefrictionoftransactioncosts.•Entrepreneurscannowmovefarbeꢀondaspiringonlꢀtosellproductsorservices.eꢀcansellreductionsintransactioncostsalone.•ServicessuchasUberaresoftwareplatformswhichmakepossibletransactionsthatotherwisecouldnottakeplace.Uberisadisruptivetechnologꢀwhichsellsreductionsintransactioncosts,enablingawidevarietꢀofpeer-to-peerexchangesandarrangements.•eplatformeconomꢀismakingproductsandservicesthatoncedidnotexist,orwereavailableonlꢀtothewealthꢀ,availableuniversallꢀandpracticallꢀfreeofcharge.•Somenewsoftwareplatformsarebeingprohibitedbꢀregulatorspreciselꢀbecausetheꢀworkbetteranddisrupttheexistingsꢀstemsofcronꢀism.RegulatorswhoplacerestrictionsonservicessuchasAirbnbtꢀpicallꢀignoretherealpricesignalbeingsentbꢀthecreationofthenewplatforms,whichisthatsupplꢀisbeingrestricted.ecorrectsolutionistosethousingfreetoexpandresidentialoptions.•Regulatorsmustembracepermissionlessinnovation,adoptingastrongpresumptioninfavourofallowingexperimentationwithnewtechnologiesandnewbusinessplatforms.•Ontheotherhand,regulatorsmustavoidoutdatedthinkingaboutantitrustpolicꢀasfocusingonmarketstructure.Platforms,bꢀtheirnature,aregiants.AnꢀplatformisbꢀdefinitionamonopolꢀwithinitsownxSUMMARyboundaries;infactthatistheadvantageofplatforms.enewregulatorꢀframeworkmustfocusonlimitingthepowerofplatforms,especiallꢀtheirpoliticalpower,ratherthanforcinginefficiencꢀandwastebꢀrestrictingtheirsize.xiFIGURESFigure1HousingbytenureinEngland:1918–2019Figure2SharingeconomyusersandUSpopulation14191INTRODUCTIONisbookaddressessomerecentchangesinavarietyofmarketsandbusinessactivities.ecoreargumentisthatmoreandmoremarketsare‘two-sided’,withconsumersandsellersbothactivelyseekingwaystotransact.Acommonwaytocharacterisetwo-sidedmarketsis‘peer-to-peer’;thereasonthisisimportantisthattwo-sidedmarketsaredifferentfromthetraditional‘price-takingbe-haviour’modelsusedintextbookeconomics.Atthetimethisbookisgoingtopress,theglobalCovid-19pandemichasgiventhistransformationanewurgency.e‘place’wheremanytransactionsoccurwasoncephysical,suchasatacitymarketoramall.Butinthepasttwodecadesthesephysicallocationshaveincreasinglybeenreplacedbyvirtualdomainscalled‘onlineplatforms’.OneofthefirstattemptstomodelthisphenomenonwasRochetandTirole(2003:990).Astheyputit:Buyersofvideogameconsoleswantgamestoplayon;gamedeveloperspickplatformsthatareorwillbepop-ularamonggamers.Cardholdersvaluecreditordebitcardsonlytotheextentthattheseareacceptedbythemerchantstheypatronize;affiliatedmerchantsbenefit1THESHARINGECONOMy:ITSPITFALLSANDPROMISESfromawidespreaddiffusionofcardsamongconsumers.Moregenerallꢀ,manꢀifnotmostmarketswithnetworkexternalitiesarecharacterizedbꢀthepresenceoftwodistinctsideswhoseultimatebenefitstemsfrominter-actingthroughacommonplatform.Iwillarguethatplatformsshouldbethoughtofassellingreductionsin‘transactioncosts’,orthecostsoforganisingandconsummatinganexchange,rentalorothermarketaction.1ethreeaspectsoftransactioncoststhatarerelevanttoonlineplatformsaretriangulation

(findinginformationandotherpartiestotransactwith),transfer(thedeliverꢀoftheproductorservice,andmakingthepaꢀment),andtrust

(theabilitꢀtorelꢀonthetermsoftheagreementwithoutresorttoexternalenforcement).Inthissetting,muchoftheactioninexchangeis‘peer-to-peer’.Ownersandpotentialusersofdurablessuchascarsorflatsfindwaꢀstoshare,withthetransactionslook-inglikerentals.evalueoftheseexchanges,takenindi-viduallꢀ,issmall,andcanbeblockedbꢀtransactioncosts.Platformsactasmatchmakers,ormiddlemen,arolethattradershavetakensincetheirverꢀfirstexchangesthou-sandsofꢀearsago.edifferencenowisthatthematch-makersaresellingonlꢀreductionsintransactioncosts1Oneofthemostgeneraldefinitionsof‘transactioncosts’wasgivenbꢀDouglassNorth(1992),whodescribedfourcomponents:measuring(bꢀunit,bꢀweight,orbꢀperiodoftime),enforcement(ensuringhonestꢀandcompliancewithcontractualobligations),ideologꢀ(attitudestowardthetransaction),and‘thesizeofthemarket’(problemsofscale,aswellastransportation).2INTRODUCTIONandoftenhavenodirectroleinbuyingorsellinganything;theyjusthelpbuyersandsellersintwo-sidedmarketsfindeachotherandtransact.isisquitedifferentfromthewaythatmanufacturersareoftenconceivedinacademiceconomics(EvansandSchmalensee2016:2):Traditionalmanufacturingbusinesses,forinstance,buyrawmaterials,makestuff,andsellthatstufftocustom-ers.Butmatchmakers’rawmaterialsarethedifferentgroupsofcustomersthattheyhelpbringtogether,notanythingthattheybuyatall.Andpartofthestufftheyselltomembersofeachgroupisaccesstomembersoftheothergroups.Allofthemoperatephysicalorvirtualplaceswheremembersofthesedifferentgroupsgetto-gether.Forthisreason,theyareoftencalledmultisidedplatforms.ey’replaceswhereallofthesedifferentgroupscanmeet[emphasisadded].Platformshavealwaysbeenwithus,asameansofreducingtransactioncosts.Butthedramaticincreaseintheimpor-tanceofplatformsinthelasttwodecadesisrevolutionary.32REVOLUTIONSANDDISRUPTIONEconomicrevolutionsdonotcarewhatwethinkofthem.Forpeoplewhobelievetheyarethecentreoftheuniverse,orfortechnocratswhowanttopullstringsandpushleversto‘runthings’,thatcanbeverydisquieting.Butfailingtounderstandthateconomiesareorganiccomplexsystemscancauseproblemsthatmakethingsmuchworse.esesystemshaveinternaldynamicsthatoperateindependent-lyofthewillofthestate,orofanyindividualforthatmatter.1isbookisanattempttoexplainthedynamicsofthecomplexsystemscalled‘platforms’andtoexplainwhy,whenplatformsareworkingproperly,wenevernoticeproblemsinthefirstplace.Wefacetheintersectionoftwogreatsourcesofturmoilformarketsandsociety:theconstantconflictoverthede-greeofstatedirectionoftheeconomy,andtheprofoundlydisruptiveeffectofthenew‘platformeconomy’.Eitherofthesealonewouldmakefordisquietingpolitics;together,1‘Complexsystems’ineconomicsconsistofsetsofinteractingindividualswhomaynotbefullyawareoftheirmutualdependence–whoupdatetheiractionsandstrategiesinresponsetotheoutcometheymutuallycreatebutthatnonemayintend.isdefinitionisgiveninArthur(1999),butitisconsistentwithHayek’s(1988)notionofthe‘extendedorder’.4REVOLUTIONSANDDISRUPTIONtheyhavethepotentialforwrenchingandunpredictablechange.Inarecentarticle,Littlewood(2018:444)triedtopeeratleastalittlewayintothefuture:ItisnotoftenthatIquotewithapprovalthewordsofTonyBenn,theerstwhileleaderoftheLabourleft.HisvisionofasocialistBritainfailedinhislifetime,butashesaid,‘Everygenerationhastofightthesamebattlesagainandagainforthereisnofinalvictoryandnofinaldefeat’.Hewasright:theidenticalargumentappliestothestruggleforfreemarkets.Inademocracythebattleofideasisneverover.etriumphalismfollowingtheatcherandReaganyearsandthefalloftheBerlinWallwasmisplaced:itturnsoutthattheintellectualadvanceofmarketliberalisminthe1980swasnotsomeperma-nentGalileo‐likediscoverychanginghumanunder-standinginperpetuity.Itwasmerelyaprotractedskir-mishwhichisnowbeingre‐enacted,notnecessarily,onthisoccasion,totheadvantageofthoseofuswhofavourfreemarkets.Towinthisclashofideologiesforasecondtime,freemarketproponentsneedtorecalibratetheammunitiontheyaredeploying.Simplystatingthatargumentsaboutthemarketwereaddressedandresolvedseveraldecadesagowillnotpersuadeanewgenerationthatbigadvancesinstatepoweraredeeplyundesirable.Nofinalvictory;nofinaldefeat.Policyreactionstothedy-namismofmarketcapitalismanddemocraticpoliticsre-quireagilityintacticsandnimblenessofmind.isbook5THESHARINGECONOMy:ITSPITFALLSANDPROMISESconsiderssomeoftheimplications,problemsandprom-isesofthenewplatformeconomꢀ,andtriestomakesomerecommendationsforthefuture,suchasitcanbeseen.Butthedifficultiesthatwearefacinghavesomeimpor-tantprecursors.e(probablꢀapocrꢀphal)storꢀistoldthatoneNedLudd,anapprenticeweaverfromLeicester,smashedtwoknittingframesafterhavingbeenabused–theabusemaꢀhavebeenawhippingbꢀhismaster,oritmaꢀhavebeenmockingbꢀlocalꢀouths.But,inanꢀcase,theapprentice’spetulancewaselevatedtomilitancꢀandsacrificebꢀLordBꢀroninhis1816‘SongfortheLuddites’:Asthelibertꢀladso’ertheseaBoughttheirfreedom,andcheaplꢀ,withblood,Sowe,boꢀs,weShalldiefightingorlivefree,AnddownwithallkingsbutKingLudd!Bꢀron,bꢀromanticisingtheLuddmꢀth,wasreflectingawidelꢀsharedimpulsetodelaꢀorimpede–bꢀviolenceifnecessarꢀ–thekindsofchangesthateconomistsnowcall‘creativedestruction’.Bꢀ1810,thefollowersof‘KingLudd’wereactiveinmanꢀpartsofEngland,soactiveinfactthattheBritishgovernmentdeploꢀedmoretroopsagainstdomesticrevolutionthanitsenttofaceNapoleoninSpain.Oneimaginesananalogousmovement,sparkedbꢀoneUrLudd,about8,000ꢀearsago,whensomeonestartedtopokeatthegroundwithasharpstick,fashioningaholeintheloosenedearthinwhichtoplantseeds.UrLuddislikelꢀ6REVOLUTIONSANDDISRUPTIONtohavebrokenthestickandkickedtheseedsabout,hop-ingtofendoffthemovetofixedagricultureandpreservethehunter-gathererlifestyle.Allthecustoms,allthewaysofmakingalivingandalife,thatUrLudd–andNedLudd–knew,wereboundupinanolderwayofdoingthings.e‘oldway’wasverydifferent,withhunter-gathererclansforUrandruralsemi-feudalfixedagricultureforNed,buttotheextentthattheythoughtviolencemightdelaychange,theywerehappytoriot.Ofcourse,real

violence–focusedandeffectivevio-lence–typicallyreliesontheactivecomplicityofthestate.ecurrentapostlesofKingLuddfindreadyalliesinthehallsofCongress,Parliamentandespeciallyinlocalgov-ernment.Withhindsight,wecanseethattheopponentsoftheNeolithicandtheIndustrialRevolutionsweredoomedtofail.Butthosebattleswereneverreallywonandneverreallylost.Bothrevolutionscorrodedtheculturalandeco-nomichabitsthatpeoplehadtakenforgrantedforcentu-ries.Bothchangedlifefortheworse,atleastatfirstandforsomepeople.2Buttheyhappened,andbeforelong,lifestartedtogetbetter.2ꢀuvalHararicalledtheswitchfromnomadictoagriculturallife‘history’sbiggestfraud’.Hearguedthat‘Ratherthanheraldinganeweraofeasyliving,theAgriculturalRevolutionleftfarmerswithlivesgenerallymoredifficultandlesssatisfyingthanthoseofforagers.Hunter-gatherersspenttheirtimeinmorestimulatingandvariedways,andwerelessindangerofstarvationanddisease.eAgriculturalRevolutioncertainlyenlargedthesumtotaloffoodatthedisposalofhumankind,buttheextrafooddidnottranslateintoabetterdietormoreleisure.Rather,ittranslatedintopopu-lationexplosionsandpamperedelites.eaveragefarmerworkedharderthantheaverageforager,andgotaworsedietinreturn’(Harari2015:79).7THESHARINGECONOMy:ITSPITFALLSANDPROMISESenewrevolution,the‘platformrevolution’,ishavingitsfirsteffectsrightnow,allaroundus.Itwillbeenor-mouslꢀdestructive.Inmanꢀwaꢀs,itwillchangelifefortheworse,atleastatfirstandforsomepeople.Butitisgoingtohappen,becausethiseconomicrevolution,likeitspredecessors,doesnotcarewhatwethinkofit.erevolutionishappeningbecausetheeconomiclogicisineluctable.epurposeofthisbookistoexplainwhatishappening,sothatwecanpositionourselvestoenjoꢀthebenefitssooner,andperhapsmitigatesomeoftheproblems.TransactioncostsandcommodifyingexcesscapacityIntheearlꢀ1930s,whilejustbeginninghisworkasaneconomistatwhatisnowtheUniversitꢀofDundee,RonaldCoasetravelledtotheUSandinterviewedanumberofcorporateCEOs.Coasefocusedonadeceptivelꢀsimplequestion:economiststalkaboutthevalueofpricesanddecentralisedmarketsinorganisingcooperativehumanbehaviour,butifmarketsaresogreat,whꢀaretherefirms?Afterall,noonecomeshomeattheendofaharddaꢀandsaꢀs,‘Holꢀcow,prices

wereinsuchabadmoodtodaꢀ!’Instead,theꢀsaꢀthattheirboss,anactualhuman,wasinabadmood.Workersdonotreceivesignalsfromprices;theꢀgetordersfrombosses.Firmsdevelopedinordertobꢀpassthemarketmechanism,becauseusingpricesandmarketscanbe‘expensive’.ekindsofexpensethatCoase(1937)identifiedweredubbed‘transactioncosts’.8REVOLUTIONSANDDISRUPTIONPricesguideeconomicactivityatsomelevel,bothintermsoftheopportunitycostofcommodities–someoneelsewillpaymorethanthevalueoftheuseIenvisionforthething–andintermsofthe‘profittest’,whichforcesfirmstoconsiderwhethertheiractionsaresociallyvalu-able.Butatthelevelofday-to-dayactivity,pricesneverspeakdirectlytomostofus.ImaginethatIworkonaproductionline,addingtwoscrewstothewiringconnectorsonanappliance.IdonotgotoeBaytoselltheincompleteframe,althoughIcould.Whathappensinsteadisthattheconveyormovestheap-pliancechassistothenextpersonontheproductionline,whoattachesacoveronthemotorhousing,andsoon,downtheline.enextworkersrespondtotheordersoftheforeman,whodecideswhichstationonthelineeachpersonwilloccupythatday.Forthosewhofavourplanningoftheentireeconomy,ofcourse,thisseemstosuggestthatitisamistaketousemarketsatall;nationsshouldbeonebigfirm,asmanysocialistshavebeentellingusallalong.Butthatisnotright,either.Pricesandmarketprocessesreallydomakeitpossibletoorganiselargegroupsofpeopleacrossgreatdistances,andwithnocentraldirectionorpersonalknow-ledgeofwhatotherpeoplearedoing.Prices,thedivisionoflabourandmarketsystemsallowhumanstocooperatebetter,andtohavemorestufftouse,towear,toeat,ortoplaywiththananyothersystem.Withoutthedivisionoflabour,thecreationofwealthandprosperityislimited,andcanonlybeenjoyedbyelites.AsAdamSmith[1776](1981)famouslypointedout,‘divisionoflabourislimited9THESHARINGECONOMy:ITSPITFALLSANDPROMISESbꢀtheextentofthemarket’,sothatthelargerthenumberofentitiestradinginamarketsꢀstem,thegreaterthedivi-sionoflabour,andthegreaterthewealthtobeshared.Owning,rentingandthecommodificationofexcesscapacityCoase’sobservationsabouttransactioncostsarevitallꢀimportant.AsIpreviouslꢀargued(Munger2015),ifCoasewerealivetodaꢀhewouldask,‘Whꢀdoweownthings,in-steadofsharingthemincommon,orrentingthem?’eremarkablethingisthatthis‘differentquestion’hasthesameanswer:transactioncosts.Toseewhꢀ,rememberthattheconventionornormofexclusiveprivateownershipisanotablefeatureofhumandevelopment.Overthousandsofꢀears,inmꢀriadsettings,theviewbecameacceptedthathavingan‘owner’ofapieceoflandoratoolorafirmwasbetterthanhavingthosethingsownedincommon.Whꢀwouldthatbe?Afterall,Rousseau[1754](1984)famouslꢀargued:efirstman,whoafterenclosingapieceofground,tookitintohisheadtosaꢀ,thisismine;andfoundpeoplesimpleenoughtobelievehim,wastherealfounderofcivilsocietꢀ.Howmanꢀcrimes,howmanꢀwars,howmanꢀmurders,howmanꢀmisfortunesandhonours,mightnotanꢀonehavesavedthehumanspe-cies,whopullingupthestakesorfillinguptheditchesshouldhavecriedtohisfellows:Bewareoflisteningtothisimpostor;ꢀouarelost,ifꢀouforgetthatthefruits10REVOLUTIONSANDDISRUPTIONoftheearthbelongequallytousall,andtheearthitselftoꢀnobody[emphasisadded].Today,itisnowwidelyrecognisedthatRousseau’sroman-ticassessmentactuallyleadstocatastrophe,the‘tragedyofthecommons’.Buttheideaofsharingisattractive,bothbecauseit’scheaperandbecausehumannatureiscoop-erative.Itturnsoutthatprivatecooperativedivisionofaccesscanwork,andthatplatformscanmakeitpossible.Anownerofasecurepropertyrightcanplanforthefu-tureandstewardtheresourceorcapitalasset.erightofanownershipclaimalsogivestheownerresidualandpre-sumptiverightsofcontrol,givingbothincentivesandcap-acitytoensureactionistakenwhencontractsaresilentorincompletelyspecified,orarebreachedbyotherparties.eownerorholderoftheseresidualrightscanthereforeactunilaterally,withoutaskingpermissionorhavingtonegotiatecontractsforuseoftheownedresource.3Uncertaintyandfrictioningettingthingsdonearecen-tralfactsoflifeinanyeconomy,soRousseauwasjustwrongabouttheimaginaryadvantagesofasystemwhere‘thefruitsoftheearthbelongtoall’.Privateownershipisheretostay,inanysystemthatworks.Butthedistributionandexchangeofcontractsinhowthingswillbeusedisadif-ferentquestion.Inthisbook,Iwillusetheword‘sharing’inthewaythathasbecomeincreasinglycommoninavariety3eimportanceoftheserights,andtheconventionofownership,hasbeenremarkedonvariouslybymanytheorists.Adiversesamplingwouldin-cludeHume(1740),Demsetz(1967),Hardin(1968),Williamson(1975,1985),Barzel(1989)andLibecap(1989).11THESHARINGECONOMy:ITSPITFALLSANDPROMISESofapplicationsandnewbusinessessuchasUber,AirbnbandBlaBlaCar.eunderlꢀingassetbeingshared,throughrentingorsomeotherprocess,isprivatelꢀowned,andtheinterestsoftheresidualrightsholderareoperatinginthebackground.Butthereductionintransactioncostsimpliedbꢀthenewsꢀstemfostersthecommodification

ofexcesscap-acitꢀ,tothepointwheretheuse

oftheassetcanbeboughtandsoldseparatelꢀfromtheunderlꢀingrightsofownership.Ineffect,aseverꢀfirst-ꢀearlawstudentlearnsinthe‘IntroductiontoContracts’class,ownershipimpliesabun-dleofrights.Someoftheserightscanbeshared,orrentedout,andothersareretainedbꢀtheprimarꢀresidualclaimsowner.atiswhꢀhavingajoband‘rentingout’one’sla-bourisnotslaverꢀ;thatiswhꢀIgettostaꢀinanAirbnbfortwonightsandhaveexclusiveuseoftheflatduringthattime,buttheownerretainsalltherights(andresponsibil-ities)oftheresidualclaimsholder.So,whꢀdoweown,ratherthanrent?eansweristhat,untilrecentlꢀ,rentingout–sharingthe‘temporarꢀuserights’portionofthepropertꢀbundle–hasbeenassoci-atedwithtransactioncoststhatoverwhelmtherevenuethatcouldbeearnedthroughcommodification.Butthatisnotobviouslꢀ,ordefinitionallꢀ,true.e‘sharingecon-omꢀ’isawideassortmentofapparentlꢀdifferentwaꢀsofpartitioningshort-termownership;thesharedfeatureofthesemarketsisthattheꢀenableprofitablemeansofcom-modifꢀingexcesscapacitꢀthatuntilnowcouldonlꢀbewasted,oratbeststored.echoiceofrentingorowning,oroccupꢀingsomehꢀ-bridform,isofcoursenotsolelꢀdrivenbꢀgeneralmarket12REVOLUTIONSANDDISRUPTIONconditions.emostimportanteconomicelementof‘dur-ables’istime.atis,wedon’twantthethingitselfasmuchaswewantthestreamofservicesorvalueweassociatewiththething.Idon’twantahammer;whatIwantistohavethesenailsdrivenintoawallinjusttheplaceIwantandatwhatevertimeImightwantit.Asaresult,Iownthehammermyselfandkeepitinatoolbox,takingupspaceinmycloset.Onabroaderscale,IwantlivingspaceandIwantsub-stantialcontroloverthatspace’ssecurity,temperature,lightingandlocation.Icanobtainthosethingsbyowningthespace;alternatively,Icanobtainthosethingsbyrent-ing,signingacontractthatleavesresidualcontrolrights(andresponsibilityfornormalrepairsandupkeep)inthehandsofthelandlord.erelativepreferenceforrentingversusowning‘hous-ingservices’variesacrosspeopleandovertime.Butthecost,includingthetransactioncost,ofeachofthetwochoicesalsomatters.e