Will the Sharing Economy Replace Capitalism?
A new book to be published on 30 July, Postcapitalism by Paul Mason (above), was given three full pages in last Saturday's Guardian newspaper where Mason was permitted uncritically to make the case that the sharing economy will replace capitalism, and that the main driver for this is information which 'wants to be free'.
(Paul Mason is the Economics Editor of Channel 4 News and previously wrote Meltdown: The End of the Age of Greed and Why It's Kicking Off Everywhere: the New Global Revolutions.)
On this very website you will find further, similar claims that are almost as extreme made by some bloggers. Mason argues that capitalism is in its death throes because of the 2008 banking crisis, austerity and growing inequality found all over the world.
He claims that 'postcapitalism' will be made possible because of three changes brought about by information technology: the reduced need for work which will increase due to growing automation; the abundance of free information; and the spontaneous rise of collaborative production, known as the sharing economy.
But is this true?
The sharing economy is certainly making waves in some sectors, notably rental. In both transportation and accommodation, this new business model has been replicated widely and become associated with new brand names: Uber and AirBnB.
Peer-to-peer finance, online staffing and video and music sharing have also seen a huge rise such that the existing corporate giants like Apple are being forced to change their own business models.
Such is the size of this phenomenon that it has unsurprisingly attracted the attention of financial consultancy firms such as PriceWaterhouseCoopers (PwC).
Big deal. Similar claims were made in the 1990s about the Internet, when it was a much smaller phenomenon, and whose growth was driven by largely voluntary activity: idealistic young people, often politically motivated or passionate about social and environmental concerns.
Claims were made then that the Internet would see the dissolution of national boundaries as people would be able to freely trade beneath the radar of customs barriers. Peer-to-peer cooperation would facilitate global revolution.
Of course, hidden behind this was the growth of online pornography and the gradual emergence of the use of Tim Berners-Lee's World Wide Web as a new kind of sales brochure.
The dot-com boom saw this trend explode into a massive multi-trillion dollar economy with the establishment of new corporate giants even bigger and more powerful than those which were there before.
Capitalism is still in place.
Similar claims are now being made for the sharing economy and history will prove them wrong. Firms such as Uber and AirBnB and others will, like Google and Microsoft, agglomerate and centralise power and control on a global scale. True, they will enable peer-to-peer sharing at a local level but their owners will become mega-rich.
Why the sharing economy will fail to displace capitalism
But the real reasons why Mason's claims are unlikely to be true run deeper than this. Despite quoting Karl Marx, who famously said that the contradictions inherent in capitalism would engineer its downfall, Mason fails to recognise the real basis of capitalism: the ownership of land, resources and the means of production.
Not in my wildest dreams can I imagine the hardware – computers, cars, homes, not to mention the energy to drive them – used by these smiling social collaborators of the sharing economy being made in sharing economy style.
The entire project is dependent upon capitalism to function.
Inequality is perpetuated by the uneven distribution not only of capital but of ownership, particularly of land.
As an example, the acute lack of access to affordable housing in many places around the world is caused by the artificial inflation of land values in certain places rather than others that is inherent in the capitalist approach. Developers bank land in areas where they think value will accumulate. Most land is owned by a tiny minority while the rest of us are landless. Will these land owners give up their land without a fight? Who will take it from them?
In modern times, only in a communist economy has adequate housing been given to everyone regardless of their location or abilities. That is because in such an economy all land has equal value. It was either violent revolution or nationalization which took the land from the bourgeoisie. Show me the modern equivalents. ISIL?
In his analysis of the history of economic development Mason misidentifies the drivers of the Renaissance revolution. He identifies them as humanists, scientists, craftsmen, lawyers, radical preachers and premium playwrights. In fact, they were traders, merchants, a global network of colonialist bandits, who stole resources from indigenous peoples around the world and brought them to Europe to sell at a profit. It was they who paid the wages of the humanists, scientists, craftsmen, artists, etc. who would not have been able to survive otherwise.
Later, behind the Industrial Revolution lay a similar process: the theft of minerals from the earth by those who had grabbed or who already owned the land, a trend which still continues and is now seen for what it is: unsustainable and with no accounting for the external costs. This revolution was often led by ruthless company managers who treated their workers shamefully, behaviour which still continues in the relatively unregulated countries and 'enterprise zones' where modern corporate giants often outsource their factories.
The growth of human rights and trade unionism was a reaction to such exploitation and slavery, but these social movements are still engaged in titanic battles with unscrupulous employers.
The thing that makes me laugh the most about Mason's utopian nonsense is the notion that information is really free.
As a writer, I need to be paid, for the surprising reason that I need to eat and pay my rent. If I wasn't being paid I would not be able to write this column. Yes, it is free to you at the point of delivery, but it is not free to my employer, Social Media Today. In fact, because they cannot find anyone at the moment sponsor this website I will soon be out of a job and you will be reading no more columns from me here.
Or perhaps Mason would like to pay me?
Most of the writers on this website are paid by someone or other. It is part of their job. They are either academics, or they work for an NGO which has sponsorship from a corporate donor. Hardly anyone does it for free.
Most evangelizers of the sharing economy cite Wikipedia as a shining example of the success of this approach but it would not survive without donations (and who pays the donors?), or the Internet, its corporate pimps and the energy which powers it. If nobody was paid for anything we might be able to eat but we would not be able to transfer surplus value in such a way.
Blogging aside, all artists need to survive, whether they are producing music, films, books, artworks or dance. That is why copyright, or intellectual property, is important. Copyright allows me to have an income from the royalties on the sale of my books. The length of copyright prevents the unfair exploitation of it by those who have not produced it, and allows the copyright holder (e.g. me) to continue to produce more work.
People like the Pirate Party in Germany who believe copyright should be abolished would, if their dream were to come true, find themselves in a sad world indeed, where the quality of published work would become progressively more miserable.
No one would love to see the abolition of capitalism more than I, but whatever is to replace it, if it is to achieve the technological feats that it does, would need to be tightly regulated and highly organised. This is not outside the bounds of possibility, but I don't recognise such a thing anywhere now and certainly not in Mason's examples.
Even the new financial models, whether they are people's banks, green pounds, credit unions or crypto-currencies still depend on the conventional banking system. Even though Greece has developed alternative networks of social sharing and alternative currencies in order to weather out its capitalism-induced current crisis, the networks are nowhere near strong enough to replace capitalism and bring wealth and security to Greece's inhabitants.
The sharing economy is to be praised for encouraging considerate social values and the creation of communities. It's great to trade outside of the capitalist economy. But on present form it lacks any hint of how it could replace the foundations of the endlessly adaptable aggression of capitalism.