Is the Sharing Economy Here Yet?

Most of the Western world’s financial and commercial activity occurs within what we’ve come to call the Industrial Growth Economy. This economy has been around since the start of the industrial age roughly a couple of centuries ago. It requires exponential (and ultimately unsustainable) growth in production and consumption of goods and services to survive. It also requires the use of ‘fiat currency’ (state-issued notes, deemed by the state to have value) for all transactions.

Living quietly alongside the Industrial Growth Economy is another economy, an ancient one. In this pre-industrial economy, financial and commercial activity occurs through what Dmitry Orlov calls “tribute, barter and gift”. Tribute is when you give something of value to another out of respect to enable them to do something — to your church, your overseer or lord or landlord — without the expectation of reciprocation. Barter is when you trade something of value to you for something of value to another. And of course gifting is giving something of value just “out of the good of your heart“. Dmitry argues that philanthropy is not gifting, but rather the laundering of guilt money with the tacit expectation of praise and reward for doing so. I see his point but I’m not absolutely sure I agree with him.

The poor have always lived principally in this ancient economy — let’s call it the Sharing Economy, a name made popular by Charles Eisenstein in his essays and talks and his book Sacred Economics. That’s because the poor don’t have any ‘currency’ in the Industrial Growth Economy, so they are shut out of it. Despite the globalization of the Industrial Growth Economy in recent decades, that hasn’t changed much.

But it’s complex — these two economies exist side by side, and everyone participates to a greater or lesser extent in both. Even the poorest pay what they can with what cash they can earn, beg, borrow or steal, and if they live in cities (which they increasingly do) they are forced to find money to pay for food (since they can’t grow it themselves any more), and often even to pay for ‘security’ (extortion and shakedowns). And even the richest, philanthropy aside, participate in the Sharing Economy — their spouses may raise their children without ‘pay’ as such, for example.

The chart above attempts to differentiate these two economies.

The complexity of living with a foot in each economy leads to some unexpected results. Our tax, legal and accounting systems are built around the Industrial Growth Economy and don’t deal well with Sharing Economy activities. Our measurement of economic prosperity is based on GDP, which recognizes paid child care and the clean-up of pollution as positive GDP-creating activities, but not unpaid child care or pollution prevention (unless that prevention activity is ‘paid for’). Balance sheets and income statements aren’t suited to showing the value of Sharing Economy activities. And as Janelle Orsi has explained, complex, convoluted laws designed to inhibit abuse of power by large multinational corporations often make small Sharing Economy start-ups and operations impossible, drowning them (mostly unintentionally) in red tape.

So what good is the Sharing Economy, beyond something we will have to have in place when the Industrial Growth Economy repeatedly stumbles and finally (and probably gradually) collapses?

Its greatest good is that it allows people who are partly or totally shut out of the Industrial Growth Economy to obtain what they need and offer their gifts when otherwise they could not. It’s how much of the world copes with little or no fiat money.

Its other major advantage is that it leads to greater equality of wealth and well-being, while the Industrial Growth Economy is engineered to do the opposite. Sharing Economy activities tend to drive down prices and work around artificial ‘manufactured’ scarcities (e.g. oligopolistic practices and intellectual property ‘usage fees’). They also encourage local entrepreneurship (finding and meeting local needs), which the Industrial Growth Economy (in its zeal to homogenize, centralize, commoditize and ‘consumerize’ everything) discourages. The Sharing Economy is, while much less efficient, more shock-resilient, personalized, sustainable and effective than the Industrial Growth Economy.

So we should try to encourage more Sharing Economy activity, and to ‘starve’ the Industrial Growth Economy by participating in it as little as possible. The means to do that are pretty obvious (e.g. boycott large corporations, create a living for ourselves instead of working for large organizations, encourage public sector activities and reverse the trend to privatize everything). But since the line between the two economies is pretty grey, we need some means to assess which activities are in which economy, and which are kind of in between.

I’ve had several discussions about this in recent weeks, and there seems to be no clear consensus or ‘formula’ for assessing where different activities and organizations fit, and hence whether we should be encouraging them or not. What I did come up with is a set of five general criteria that tend to make an activity more Sharing Economy-like and less Industrial Growth Economy-like. Here they are:

A. Well-being created — Does the activity produce real value for the recipients of goods and services?
B. Ethical behaviour / non-exploitative & sustainable — Is the activity that funds, accompanies and/or ensues from the transaction moral?
C. Generosity — Is the gifting bona fide, without ulterior motive or reward?
D. Non-reciprocality — Is the gift without cost or strings (tacit or explicit) attached?
E. Non-monetization (in fiat currency) — Does the activity avoid the use of money? And if any money changes hands, is it in a local community-based non-debt-creating currency?

I would argue that something needs to meet at least three of these criteria to really qualify as a Sharing Economy activity, and that the more criteria it meets, the better. So a true gift, along the lines of the repentant Ebenezer Scrooge’s Christmas Day gifts, would score 5 out of 5. Here’s how I would score some less obvious activities, in declining order of ‘sharing’:

• A library, seed swap, community garden or tool exchange: 5 (ABCDE).
• Providing ‘community space’ or workspace free of charge: 5 (ABCDE).
• Providing free education, information, counselling, child care, health care or couchsurfing/’warm showers‘: 5 (ABCDE).
• A gift of time to a charity: At least 4 (BCDE) out of 5. If it’s time spent doing something really valuable to the charity, then 5.
• A gift of money to a charity: If by a poor person, 4 (ABCD) out of 5. If by the Koch Brothers, 1 (A) out of 5.
• A gift in a community currency: Same as above, plus 1 (E).
• Free expert advice given (e.g. by a hardware store) in the hopes you will buy something ‘in return’: 3 (ABE) to 4 (ABCE).
• A barter exchange where both participants get roughly equal value from the trade: 3 (ABE).
• A service charging a ‘sliding scale’ based on ability to pay and recipient’s perceived value: 2 (AB) or 3 (ABC).
• ‘Subsidized’ housing and food ‘banks’: Not sure — depends I think on quality and how demeaning it is to qualify.
• Co-ops and co-housing: On average I’d say 2 (AB).
• A barter exchange where one participant gets the short end of the trade but feels compelled to do it anyway: 1 (E) to 3 (ABE).
• Bike share, car share, ‘Airbnb’-type room-sharing etc.: 1 (A) to 3 (ABC).
• An interest free or low-interest loan: 1 (C) to 3 (ABC). Some would argue that even a low-interest loan is usury and unethical.
• A ‘market-rate’ loan or investment; or a regular ‘market-price’ sale or lease: 0 to 1 (A).

As the economy continues to wobble and the rest of the middle class disappears, more and more of us will be, both purposefully and of necessity, engaging more with the Sharing Economy. In the meantime, many communities are starting to create local directories and maps of Sharing Economy activities. (I participated recently in a Sharing Economy ‘map jam’ in Eugene, Oregon, hosted by Tree and Kindista, and they’re great fun and terrific learning and networking opportunities.)

When you’re tied to the Industrial Growth Economy (as most of us in affluent nations are), it may seem like a huge leap to a Sharing Economy where there is no accounting, no money changing hands, and absolute trust that one’s local community will give you what you need, and that you should give what you can offer without asking for compensation. But up until a couple of millennia ago that’s how we all lived, and until a couple of centuries ago that was still the main economy in most people’s lives. There’s lots we can do in the meantime practicing making the transition gradually, so that when the bottom falls out of the Industrial Growth Economy it will be a manageable last step to the Sharing Economy that will replace it. And as a bonus, gifting and re-use are better for the environment as well.

The next time you’re thinking of buying, or selling, or discarding something, imagine how you might share it instead — move the activity up a couple of points on the 5-point scale. What do you have to offer that’s surplus to your immediate needs that someone else in your community could use? And what needs do you have that, instead of being satisfied at the mall cash register, could be satisfied by another’s offer? And what could you do with others in your community, through organization, ‘map jams’ and directories, to make it easier for the Sharing Economy to bloom there?

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11 Comments on "Is the Sharing Economy Here Yet?"

BillT on Fri, 15th Nov 2013 1:21 pm 



“… their spouses may raise their children without ‘pay’ …” LOL

The wealthy have ‘nannies’ or paid servants to ‘raise’ their kids. Can you see Bill Gates going home and changing diapers and cleaning the bathroom tonight? Can you see his wife doing that? I cannot. He was 39 before he even married. Too busy becoming a billionaire to think of a family.

Going from a ‘for profit’ capitalist lifestyle to a gifting lifestyle will be difficult, if not impossible, for most Westerners. The ‘me / my’ is too deeply planted to morph into equality or a ‘communist’ lifestyle without being forced to do so. That will take a total collapse of the economy to ever become popular.

However, it is more common here in the 3rd world. Filipinos are more into the gifting economy and commonly help others to get ahead or to deal with disasters like the present one. Even the poor will share with their neighbors.

wildbourgman on Fri, 15th Nov 2013 2:03 pm 



I don’t mind a sharing economy as long as it’s not brought about by force. I live in a small community where we already engage in this to some extent. As little as 60 years ago or even less my ancestors lived this way in South Louisiana, but don’t think for one minute that they didn’t keep a mental tally of who pitched in and who didn’t. Shame and gossip, were the main tools used to keep folks in check, but that’s when “honor” meant something.

J-Gav on Fri, 15th Nov 2013 4:11 pm 



Elements of a sharing economy can and do exist even in big cities and, in my experience, it’s usually the ‘relatively’ poor who do most of the sharing and volunteer work. It rarely reaches the level of an entire neighborhood, however.

You’re right, Wildman, any such community-wide system would be crazy not to have some safeguards against freeloaders and ego-trippers.

BillT – “Going from a ‘for-profit’ lifestyle .. to a gifting lifestyle will be difficult, if not impossible, for most Westerners.” That’s for dang sure! I’m not at all certain that even a total collapse of the economy would make it happen. It might rather lead to a rise in an “everyone-family-tribe for themselves” attitude.

Jerry McManus on Fri, 15th Nov 2013 4:20 pm 



I’ve been reading up on the Northwest Coast tribes of Native Americans, they had a very interesting tradition called “potlatch” in which the headman of a village would throw a big party and either give away or destroy accumulations of “wealth” mostly in the form of stockpiles of food.

This was made possible due to the fact that for a very long time food was very abundant relative to population in the fertile and temperate Pacific Northwest.

Other tribes would come from miles around to receive this bounty, which was freely given as a display of the wealth and power of the headman. High status was conferred to those who could give away or waste the most “wealth” in this manner.

This would also occasionally include the ritual slaughter of slaves captured in war.

Dave Thompson on Fri, 15th Nov 2013 4:35 pm 



A man at the grocery store asked me if I could give him a jump. I said I could but I had no cables and neither had he. So I went home and got the cables and upon returning gave him a jump. I had been in the same predicament in the past and was helped out by strangers. Most of us understand this.

wildbourgman on Fri, 15th Nov 2013 10:38 pm 



Dave, what if the owner of a grocery store needed a jump and you gave it to him and then someone needs a loaf of bread next week?

It gets tricky. According to Professor Walter Williams, currency is supposed to be a certificate proving that you have served your fellow man. In a large sharing economy you could have trouble providing that proof without currency or barter.

I think a sharing economy works much better on a small scale, where you have a better relationship with the people you share with. Trust is very important in a gifting society.

Mike in Calif. on Fri, 15th Nov 2013 10:40 pm 



Half of the time, when I hear the likes of “sharing economy”, “social justice”, “sustainable” or “stead-state”, I also hear a chorus of angels in the sky singing Kumbaya. The other half of the time I hear the howls of Marxists past gurgling up from the pits of Hell.

First of all, it just ‘industrial economy’, not ‘industrial growth economy.’ Industry does not require ‘growth’ to survive and produce. That’s the banks handiwork. There are thousands of small companies in the US that have operated for generations just getting by.

Unless you really want to live the short life of lice-transporting primitive, you’re going to need a real economy, a currency and industry. A “Sharing Economy”, which in truth exists no where on the planet, will not work beyond the nature-imposed human social horizon (a hundred people, give or take) much less scale up to even a small town. And scale up it MUST in an over-populated world. Failure, a priori.

We could go on. But all five points of definition for the “Sharing Economy” only work on the very small scale within that social horizon. And even within that horizon they fail more often than not, as dozens of communal experiments in the US have shown.

Norm on Fri, 15th Nov 2013 11:51 pm 



Lets say we try to share a car. So the way that works is, I wash it, wax it, put gas in it. I put air in tires, and change motor oil. What you do, is drive all around town. Drive thru muddy puddles and dirt lots. You get a nail in the tire and you burn up the gas. Your muddy boots get the car mats dirty.
when you get back, you toss the keys on the counter, and you say, here ya go you got hour work cut out for ya. AF that point I got a rag and tools in my band, you got a beer and a joint in yours.
This is exactly what will happen, and its why I won’t share my car with you. Talk of sharing comes from clueless car left elites, or from deadbeats who want others to clean up their mess.

action on Sat, 16th Nov 2013 3:37 am 



The problem with all that is fitting 7 billion (and counting) people into that little barter scenario. I’m thinking food will be the dominant thing people will want to barter for, and a lopsided deficiency in farmers will develop. This is hippy idealism utopian fantasy that will prove impossible because of the number of people (zombie idiot robot slaves).

BillT on Sat, 16th Nov 2013 9:16 am 



If you ever notice, most of the people portrayed or shown in these articles are middle or upper middle class playing at ‘commune’ living. If they had to give up their 1st world income, toys and comforts, I wonder how sharing they would be?

ghung on Sat, 16th Nov 2013 2:39 pm 



@Mike – A sharing economy and a formal currency-based economy aren’t mutually exclusive. I’ve been operating successfully in both for decades. I submit that one is much more resilient than the other.

I can’t speak to the “lice-transporting primitive” thing, even though I prefer things more primitive than my contemporaries seem to,, and try to not think in absolutes.