Some Thoughts on Sharing Economy Potential

Timothy Taylor notes that the "sharing economy" nickname is a triumph of public relations artistry, particularly since much of the digital realm has given rise to "low pay" and temporary work. It's not that there's anything wrong with this. After all, people are utilizing creative means to gain economic access which otherwise might not be possible. What's not to like?

Eventually, these changing trends could evolve from their present "negative" uncertainties into more stable and positive formations, at local levels. For instance, some features of the sharing economy alignment are relatively horizontal, in terms of resource utilization. This suggest further capacity for economic alignment in a horizontal direction, particularly for knowledge use. Once local groups are better able to capture the potential of horizontal alignment, more stable growth becomes possible. Even though the digital beginnings of the sharing economy are fragmented, they are already having effects on economic activity in areas of high population density and economic complexity.

Sharing economies are also part of what the Government Accountability Office refers to as a contingent workforce. While one might initially think of cashiers and day laborers, the contingent workforce category now includes high skill workers such as business consultants, as well. From Lauren Weber at the WSJ:

The GAO found that contingent workers, broadly defined, comprised 40.4% of the workforce in 2010, up from 35.3% in 2006. Most of that growth came not from typical freelancers or temp workers but from an increase in permanent part-timers, a category that grew as employers cut hours and hired fewer full-time workers during the recession.

One of the main features which cuts costs for the digital sharing economy, is the internalization of important trust factors. Knowledge use systems would also seek to internalize means for reliance on group members. Perhaps most important, knowledge use systems would seek to provide internal stability and cohesive structure which go beyond the temporary nature of today's sharing economy. Not only would the horizontal nature of time arbitrage make it possible to coordinate skills in lower population densities, the time arbitrage relationship would be one of mutual benefit. In other words, no "boss" involved. Not "natural"? Recently, Mark Perry highlighted a relevant quote from J.R.R. Tolkien:

...the most improper job of any man, even saints (who at any rate were at least unwilling to take it on), is bossing other men. Not one in a million is fit for it, and least of all those who seek the opportunity.

Just the same, many individuals have long been willing to accept bosses. After all, working for others meant stability, as long as many who are still alive can remember. Hence it is confusing now, to find those earlier promises gradually slipping away. Even the imperative to take responsibility for one's life trajectory, no longer quite means what it once did. What's more, recent developments are not just a matter of seeking out the "right" places to work, because the time has come to extend economic complexity well beyond the prosperous regions of the present.

Fortunately, the efforts involved in such an endeavor are more closely aligned with the work of the mind. Horizontal - or equal - wealth flows don't always seem advantageous because they don't offer the same differences in income which have driven previous economic activity. However, much of this problem can be overcome by treating matched time as new wealth which can be directly reimbursed. It would not be possible to fully utilize today's vast knowledge potential, without a similar approach.

After all, once someone requests higher time value in relation to others, their skills sets have to be reinforced by secondary means, such as redistribution or preexisting wealth. Economies have been able to rely on this approach for long periods of time. But ultimately, monetary flows become distorted and overly reliant on further long term government backing for knowledge use. The standard approach has also become problematic at local levels, for it is increasingly difficult to coordinate "special" skills sets in other local group formations, unless the economic region is also "special". Unfortunately, the seemingly reasonable calls for higher wage levels, continue to exacerbate this problem.

Key to moving ahead, is maintaining understanding regarding the vast differences between horizontal flows of knowledge, and the more vertical flows which remain the province of product which is separate from personal time use. After all, the vertical flows of production's first order, are what could continue to provide further choice in economic life. These choice sets extend beyond the valuable settings which coordinated time value can create. Perhaps one could imagine local time arbitrage as production's second order, in the sense of value added knowledge use.

With a little luck, personal choice sets will continue to be augmented by the still vast options which mass production has created, alongside access to the intellectual energy which the world has to offer. The challenge ahead is to create understandable links between horizontal flow potential for knowledge use, and the lateral flows of product which remain separate from time.