Upstream - The Sharing Economy with Doug Henwood

Episode Date: April 23, 2016

Doug Henwood is a columnist for The Nation, Harper's, and Jacobin Mag; the radio host of Behind the News; author of Wall Street: How it Works and for Whom; and most recently of My Turn: Hillary Clinton Targets the Presidency. We spoke about his research on the "sharing economy", as well as the history of capitalism, Ralph Waldo Emerson, and possible solutions to the growing precariousness of labor.  This episode of Upstream was made possible with support from listeners like you. Upstream is a labor of love — we couldn't keep this project going without the generosity of our listeners and fans. Please consider chipping in a one-time or recurring donation at www.upstreampodcast.org/support If your organization wants to sponsor one of our upcoming documentaries, we have a number of sponsorship packages available. Find out more at upstreampodcast.org/sponsorship For more from Upstream, visit www.upstreampodcast.org and follow us on Twitter, Instagram, Facebook, and Bluesky. You can also subscribe to us on Apple Podcasts, Spotify, or wherever you listen to your favorite podcasts.

Hello and welcome to Upstream, part of the Economics for Transition project. Today we're speaking about the sharing economy with Doug Henwood, an author, radio host, and columnist for Harper's The Nation and Jacobin. So just to start making sure we're all talking about the same thing, because I know that people use different words to talk about the sharing economy. I'm wondering if you use the word sharing economy when you talk about Airbnb, Uber, and Lyft, or is there another term that you use, just so we can be on the same page? Well, I use that because it's a term that people know, and it's kind of hard to make up your own terminology, given that language is a social thing. So yeah, I use it, but I hope you can hear the air quotes when I do use it, because it's a strange concept of sharing.

We learned in kindergarten that sharing is a good thing, but the way that sharing operates in the Uber, Airbnb world isn't exactly the selfless thing that we all aspire to back in kindergarten. But yes, it's a term I use, but quickly go into an explanation of what it's all about. Can you talk a little bit about your background and what brought you to particularly writing and talking about the sharing economy? Well, my background is, my academic background, if we go back into ancient history, was in English. I was an English major in college and did three years of graduate work in English. I was going to write about American poetry. And then one of the things I was going to do with my dissertation was look at some of the psychological changes underlying a lot of canonical American poetry

and related to the changes in the economy, and the move from a small-scale competitive capitalism in the early 19th century to a large-scale finance bureaucratic capitalism of the 20th. And I had studied economics in college, so I wasn't completely naive about the subject, but I was, like I said, an English major and really spent a lot of time studying critical theory and that sort of thing, and poetry, much less so fiction. And when I started to write the dissertation, I started reading more economic history to beef up that side of my study, and realized I found that a lot more interesting than writing a dissertation about modern and 19th century

American poetry. So I just got more and more interested in that. And in 1986, I started a newsletter, Left Business Observer, which I published in 2013, and I sort of went on vacation from it. I'm not sure if I can go back to it, but that's how I got started writing about economics. I didn't really know what I was doing when I first got started. I kind of taught myself, and I wrote my book about Wall Street. It got published in 1996.

That was really how I really learned what I was talking about. It was a development economist called Learning by Doing. That's how I got into it. And the sharing economy, I've been interested in it just as it was such a new phenomenon. I was also interested in the way so many things were getting financed by venture capitalists. getting financed by venture capitalists, the sharing economy things were a very large part of what the venture capitalists were funding and still do now. So I just got interested in it from that angle, and then The Nation magazine asked me to do a piece about the phenomenon about a year and a half ago, I guess it was.

And that's how I really got serious about talking to a lot of people and doing a lot of research into it. But I had this pre-existing interest in it because of the use of the word sharing was interesting, but also because that's what all the venture capitalists were interested in, to see what they were all about. Yeah, so your financial history background kind of played into why, what was interesting about this story and also the historical context. So what is the historical context about the sharing economy?

What are kind of the economic conditions that have led to the rise of the sharing economy? The early ventures in that space, as they say, in the Silicon Valley, were, I think, had a lot to do with coming out of the Great Recession. A lot of people who didn't have jobs or barely had jobs, a lot of insecurity around. That, I think, provided a uh... already labor force for the uh... entrepreneurs who developed uh... the sharing economy in its early days and of course

then uh... the iphone was uh... unleashed in what two thousand six two thousand seven so that uh... provided a technological basis uh... for making connections that make uh... the sharing economy possible so i think the combination of combination of the technology of the smartphone plus a large semi- or unemployed labor force and growing precariousness among formerly middle-class people, I think that provided a catalyst for the development of this. Then, of course,

the venture capitalists got involved, and they tend to herd a lot. So when one or two of these things become successful, they want to fund another 20 of them. So I think all those things together really got it going. The technology, the pool of unemployed or underemployed labor, plus the willingness to finance on the part of the venture capitalists. So you talked about the precariat, or you talked about precarious labor. What is the importance and the significance of that rise of the precariat class in this issue? Yeah, I think I'm a little uncomfortable with that term because it sort of overestimates the security that a lot of working class people had in the past.

There certainly has been an increase in insecurity, but sometimes the severity of that break is exaggerated. All the working class jobs going back decades're no more secure than jobs are today. Benefits were rare. There was a tendency to normalize the period of the 1950s and 60s into the early 1970s when there were stable jobs with decent wages and good benefits. But that was really the exception in history. So in a lot of ways, we're just going back to the 19th and early 20th century model of the labor market. But that objection aside, there just really are a lot of people who maybe expected more,

older cohorts expected more, younger cohorts are maturing into a world in which they expect basically nothing out of the economy. That plus this ideology of entrepreneurship that really grew up in the 80s and has grown ever since. Being your own boss, Americans have long wanted to be their own boss, so that also has a longer history that people might think. But somehow the reverence for entrepreneurship that grew up starting in the Reagan years provided an ideological framework for people to embrace this sharing economy. You can be your own boss, run your own business. And most people who are involved in this world are not making a whole lot of money,

but the appeal of entrepreneurship and self-control, self-reliance, all that sort of thing, runs deep in the American psyche. And putting a nice spin on insecurity, you can become an entrepreneur. You may not have a good, stable job, you may not have benefits, but you're an entrepreneur, and therefore that gives it the glory that the reality of it is lacking. So then, going back to the term precariat, the problem that you see with that is that you're saying it's not a new thing. The precariat is not a new thing. It's more that it was before the 50s and then now since

the 80s that we've seen the precariat. Yeah, we've got a new name for it, but it allows an awful lot of working class experience in the labor market. Many decades before, in the 19th century and to the first half of the 20th was extremely insecure people populations were actually more mobile than 19th century they are today people were more likely to live far from their place of birth of 19th century than they are today so there's a sense that people think that everything is new but in a lot of ways we're just going back to the old the kind of self-reliance and the lack of benefits and all that sort of thing that people think of as characterizing the present has a long history in American economic life.

Yes, and would you say very related to capitalism as an economic system? And would you say very related to capitalism as an economic system? Yeah, the great innovation of capitalism was to sever people from their own means of production. If we look at the words of farming, peasantry, even early America, where a lot of people grew their own food or had some sort of artisanal labor, blacksmiths or soap makers or whatever. Then they got taken away from that means of production and ended up getting thrown into factory life, urban factory life. And that was, for a lot of people, a rude shock. They had gone from maybe not a glorious, prosperous existence, but to a certain degree of independence, then getting thrown into a factory life in personal, anonymous cities, and tried to get by.

And then certainly with the growth of unions in the 1930s, the growth of a welfare state in the post-World War II years, there was a degree of insulation from the insecurity and anonymity of the factory life of the early 20th century that gave people broad growth in incomes, broad prosperity for much of the population. growth in incomes, broad prosperity for much of the population from roughly the early 50s into the mid-1970s. And then things started going badly awry in the mid-1970s. Things got less and less secure, and benefits got destroyed, and unions got broken. And that temporary period of broad prosperity and security ended, and since then it's been a huge polarization between the rich and everyone else. And you mentioned a little bit ago about entrepreneurial spirit and the glorification of being an entrepreneur, and I know that you've also written about the Californian ideology,

and I'm wondering if you could talk a little bit about that term and how that's played out in the sharing economy. You know, it's an interesting series of events that a lot of what became free market ideology for entrepreneurship in the 1980s has roots in hippie culture, the 70s, and the Whole Earth Catalog, Stuart Brand. and the Whole Earth Catalog, Stuart Brand. He went from being that kind of hippie to being an apostle of entrepreneurship and self-reliance and high-tech culture. So there was that shift, and a lot of it centered in California,

from hippiedom, which really had its own bit of self-reliance about it. As I said earlier, I started by studying American poetry, and I spent a lot of time studying Ralph Waldo Emerson, who was all about individualism and self-reliance. So this does have deep roots in American culture. And I think the hippie experience reproduced a lot of that. But then it got all mixed up with the early tech culture in California in the 1980s,

that you could just develop some glorious machine in your garage or use one of those machines to develop a new way of doing business or whatever. And that kind of technology plus self-reliance and, again, kind of attitude of revolution, we're going to overturn everything, overturn the existing order. That's another point of continuity between Emerson and the hippies and the California ideology of high tech. And now you hear about it all the time with the venture capitalists who just love to disrupt everything.

They're all about disruption. And they often forget that that kind of disruption they're talking about is often somebody else's mode of existence. So we're seeing in the sharing economy, they talk about disrupting incumbent or legacy models like hotels with Airbnb or traditional cab driving with Uber and Lyft. But they're also undermining a lot of formally decent or half-decent jobs at the same time. So they celebrate the disruption and the innovation, but often don't think of the consequences of who's being disrupted. And, yeah, we've been learning a lot about who's been disrupted

and also the amount of money that's being earned and through profit of these companies. And we also see how some people say that, you know, Airbnb and Uber are just allowing people to make enough money to make ends meet. And so the question arises as to, you know, is this about something that's illegal or is it something that's immoral? Is this about something that's illegal or is it something that's immoral? And is it something that the government should do more to regulate or that, you know, it's just something inherent in the system that a company should not make this much money so quickly? You know, what are you seeing as kind of the bigger issues here with the rapid rise of these companies? Well, there's a lot of things at stake here. One is, as I said earlier, that the people who came out of the Great Recession with very poor employment prospects, we're still not very concerned about that. The population is still underemployed. We're about

8 million jobs short of where we would be if the same share of the population were employed today as was employed before the recession in 2007. So while the conventional job market has recovered significantly, it's still not a good one, and a lot of people are still outside it. So there's that, and there's this large problem where a lot of people just can't find employment and can't make ends meet. And then if you look at the specific businesses, there are all sorts of problems with Airbnb, for example. I know people who make a decent amount of money renting out a spare room or renting out their house because,

again, they can't find work. I interviewed a bunch of graduate students in New York who, because it's so expensive to go to school, they rent out a couch or a bedroom and pay their bills that way. But there are also consequences in the housing markets in cities with tight, expensive housing prices. So, for example, I think something like a quarter of the number of units available for Airbnb rental in New York City is equal to about a quarter of the total apartment vacancies. And the real estate market in New York is very tight and very expensive. So taking a lot of those rooms off the real estate market in New York is very tight and very expensive.

So taking a lot of those rooms off the conventional rental market and putting them into Airbnb means that everyone else is scrambling for a decreasing share of vacant space. It also enables gentrification in lots of ways. So when I talk to people both in New York and Los Angeles who use Airbnb to pay their bills. One of the strategies that they use is to take on rent, say, more space than they would do otherwise or rent it in a better, more expensive neighborhood than they would otherwise, and then use Airbnb to subsidize that choice. So that really is enabling gentrification. It allows

people to pay higher rents than they would otherwise. At the same time, it's taking units off the market. It's also enabling people to pay rents higher than they could otherwise because of Airbnb. It's also undermining the hotel business in some big cities. And some hotel jobs are decent, unionized jobs with benefits. So undermining those is actually harming the prospects of people who had fairly stable and have decent employment. So the consequences of that are more complicated than people might think of when they just say, oh, it's easy for me to get a vacation rental, or it's easy for me to pick up a few bucks by renting out a spare room.

It does have these larger effects on the housing market, especially in cities like New York or in California, where markets are tight and rents are high. In the taxi industry, the market in New York is somewhat different for Uber and Lyft than it is elsewhere. In New York, all the Uber drivers have to be certified by the city's Taxi and Limousine Commission. And they're not really, they're none of these amateurs with their own cars who can drive on their own. So that has less of an effect on undermining existing cab drivers. But in other cities, like Washington and Chicago,

and I believe Los Angeles as well, where I talk to people in all those places, they're not making very much money. They hear these fantastic stories from Uber that you can make $60,000 a year driving a car in your spare time or some fantastic thing like that. And the reality is that

after they pay their expenses, they're lucky to make $7 or $8 an hour. And there are a lot of people getting into this who don't really quite understand what running a business is all about. I talked to one guy who's driving an Uber who said, well, how much do you make? And he quoted a number. And I said, is that before or after expenses? And he said, I don't know, really. So I think people are not really thinking through the consequences of what they've gotten themselves into. The turnover among Uber drivers is very, very high. People don't stay very long, I think, because it's so hard and you make so little money. The dreams they had when they got into it, running their own business, don't really pan out.

And they leave after six or eight months of very unsatisfactory labor people don't understand their insurance coverage or lack of it but they think that this is also true of airbnb i believe that if your regular uh homeowners or rental insurance or car insurance may not cover a commercial uh enterprise which is what you're doing if you Airbnb or Uber. And then they find out they didn't have the insurance they thought they had. So a lot of people get into these sharing economy gigs and then find out that things aren't quite as rosy as they might have seemed. But if you just go back and get to the Uber situation, it's never been an easy job to

be a cab driver. It keeps getting harder. The owners squeeze the drivers. cab driver, and it keeps getting harder. The owners squeeze the drivers. Now to have this competition from Uber, which is undermining the existing fares, means that it's gotten even harder to be a conventional cab driver. It's driving down prices, driving down incomes, increasing competition, and making things harder for the workers. It is nice if you're a rider, I have to admit. I use Uber. It's really hard to keep your hands clean in a dirty world. I wouldn't frown on somebody for using it by any means, which is one of the reasons I think the whole thing has to

be regulated better than it is, because it is very nice and very convenient to be able to pick up your phone and summon a driver and have a driver be there several minutes. Certainly in parts of Manhattan, it's easy to find a cab on any street, but in lots of other neighborhoods, it's not easy to find a cab. So that makes it a lot easier for people to get from one place to the other. But the consequences of it for the broader labor market and the broader society are not always apparent when you're pressing that button on the Uber app.

Absolutely. And so what about the idea of unionizing app-based drivers, which I know is happening a little bit in the California Labor Commissioner's Office recent ruling in Uber versus Berwick and also the recent ordinance that was passed in the Seattle City Council. So I know that there's a lot of cities looking towards unionizing as a way to maybe mitigate some of these issues. What do you think about how these decisions are maybe changing things for the landscape that you just talked about? Well, I think it would be great to unionize drivers, not just Uber drivers, but also regular cab drivers.

There's been some success of doing that in New York and a few other cities with traditional cab drivers, but it's really, really hard. These are people who don't normally work together. If you're looking at a regular, more conventional workplace, people know each other. They have social ties, perhaps beyond the workplace. They're friends and colleagues, whereas with Uber drivers, they may see each other at the gas station, and that's about it. And I remember talking to a number of people who tried to organize cab drivers in New York City, and they go to restaurants where cabbies hang out or go to gas stations where cabbies hang out.

But it's hard. And the turnover, with the turnover being as high as it is among Uber drivers, it's especially hard. It's very hard to organize people who may be only in a job six months and then gone and replaced by another set of transients who will burn out after six months as well. But I'm all for the attempt, but it does seem very, very difficult. Another possibility, which is, I think, very interesting, is having some sort of driver-owned cooperative version of Uber, not owned by Travis Kalanick and his colleagues, but owned by the drivers themselves. Right now, the only people

really making a lot of money off Uber are the owners and maybe the venture capitalists who put money into it in the early stage. But if they had some sort of driver-run cooperative that used Uber-like software to summon drivers and handle payments,

that's another way besides unionizing that might make things more stable and more just for the drivers. You've been listening to an interview with Doug Henwood on Upstream. He'll be back in the second half of our program. Running on a sacred horse All through the night We came across The effortless way On a hood of a parking lot dancer Into the days and into the nights

Dwelling waves to put up a fight Upside down, the least cost Under fire bridges Cynali sgwrs, oedd yn ffwrdd o'r llawr Rhain yn sgwrs, a'r llawr yn llawr Gwasgwch yn sgwrs, byddwch yn gwneud y gwaith Bye. Thank you. Saturday night, we're ready to go Fade my days and boy, it's the turn She's a smile, you face me Fade my teeth and voids into Sheets of smiling faces And blonde and jiggly flowers

Into the days and into the nights Jumping in waves from the stars and daylights Upside down, on the east coast We can waste our time and day but upside down we'll at least go under fire and jade. Rally in, hands in the air, don't reach your own hand, and don't defend. Dancing on the sand Ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, ooh, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I Welcome back to Upstream. That was the track Nature by Valet. Today we're in conversation with author and researcher Doug Henwood about his research about the sharing economy. I've read that you've compared the sharing economy to feudalism,

and I was really interested in you talking a little bit more about that comparison. I think it's really interesting. Well, it seems like there's a bunch of desperate people who are placed in this kind of permanent subordination to their masters. You have a vast, insecure population. The way the Uber thing is set up is that you get a certain amount of money for a fare, but a large portion of that has to get paid over to Uber. So there's usually a flat fee plus a percentage of the fare goes straight over to the folks in San Francisco. Maybe they're venture capitalists as well.

It's almost like a feudal serf paying tribute to his master. It's almost like a feudal serf paying tribute to his master. The way the feudal serf blew food and then had to pay a bunch of it over to the landlord. It feels somewhat like what the driver has to do with the Uber and Lyft masters. And another kind of more theoretical level question. We spoke with Dr. Keeley McBride of University of San Francisco, who talked about how TaskRabbit and WAG, similar apps in the sharing economy, foster sort of a modern servitude, kind of like a servant class, which I think is related. I was going to ask what you think about that idea. Yeah, there's actually a service in India that's called something like Rent a Peon. So they make it really explicit over there.

Rent a Peon? That's the name of it? Something like that. Peon is in the title. I can't remember the precise name, but there's a peon in the title somewhere. Yeah, that's an Indian word. I don't know. I guess people are ruder than they are.

The Americans thought it was a misnomer. But, yeah, the woman who started TaxGraphic, I remember the story. She came home one night after a day of work and was too lazy to call out for food or something and said, wouldn't it be nice if I could just summon somebody to get food for me? So it's like back in the 19th century

when an aristocrat would ring a bell and summon his servant to bring him food. This is a high-tech way of doing that and democratizing it, I guess. So the people in the middle and upper middle class can summon someone below them in a social ladder to do a task for them. And the founder of TaskRabbit used a lot of very nice language about neighborliness and sharing. This is one of the origins of the whole concept of the sharing economy.

But in fact, you're looking for some desperate person who really has no stable employment to pay him a few bucks to come over and perform labor for you. There's no benefits, no assurance of stability, no assurance that they'll be at work tomorrow. It's just a very temporary servant relation. And there's nothing neighborly or sharing about it. It's very anonymous, something you're never going to see again, probably. And there's really no sense of obligation, no sense of continuity. That has nothing to do with neighborliness or sharing, but it sounds nice that way.

But it does seem like it's a way for a relatively well-off person to summon someone who's not quite so well off to perform a task and then go away. It's, I don't know, it seems like portioning of human relations to me. Yeah, and it definitely comes back to language, like you mentioned earlier, and how, yeah, absolutely, we do see these kind of value-laden terms and phrases that are kind of kind of value-laden terms and phrases that are kind of incongruous, like collaborative consumption, you mentioned sharing, community, neighborly, things like that. And one thing that we've seen is that instead of the sharing economy, that the real sharing economy is the solidarity economy.

And kind of looking at kind of like what you said about cooperatively owned platforms and also companies more like couch surfing, or we found some different car companies where if you're LGBT and you need a safe ride, you can call someone and then they'll give you a ride for free, things like that. So we are seeing other examples. I'm wondering if you're kind of looking at the comparison between the sharing economy and the solidarity economy and how those two use language or are different. Well, yeah, they're certainly very different. They're based on very different principles. One is based on a transient monetized relation,

the other is based on some kind of human contact solidarity over the longer term. But it's interesting to me, and I first started thinking about this during the dot-com bubble of the late 90s, how much this allegedly revolutionary tech centered kind of economy draws upon a human longing for cooperativeness and solidarity.

Back in the 90s, there was all this rhetoric about flattened hierarchies and self-management and making work fun and spontaneous. There's all a lot of nonsense, but it did draw on people's utopian urges to do things more humanely and more decently. And we're seeing that again. I think that people like the idea of sharing. There's a certain appeal to that, and I think people who use this language

understand that there's an appeal to it, that people have a more utopian longing to get away from this atomized individual world we all live in and to have some connection with other people. I've talked to people who do Airbnb hosting, and I like the idea of offering accommodation. Now, with Airbnb, I should say a lot of people are actually not renting out a spare room or a

spare couch. They're doing this as a business. So they will buy apartments or buy houses with the explicit intention of just running a business through Airbnb. So that's not what they're supposed to be doing. It's illegal in a lot of jurisdictions, but that is also what's happening. It's got nothing to do with that language of solidarity or sharing or neighborliness. It's just a new way of doing business in the old sense. But I think that the feeling that these people want, the promoters of the sharing economy, use all this language, which is warm and fuzzy in a lot of ways, to sell what is basically a cold-hearted economic proposition.

It's interesting to me. It suggests that there still is a utopian longing somewhere in the broad population that is not really acknowledged in any other way other than through this perverted use of that language. What do you see then as the future of the sharing economy? Do you see that, because I know that you talked about the Uber website where people can post their grievances, people who work for Uber, and I know that you spoke with people who are hosts on Airbnb.

So are you seeing people make kind of the larger connections? Like they're seeing, oh, this doesn't actually feel like sharing or, you know, I'm really doing this to make ends meet because I don't have stable income elsewhere. Like, are people seeing the larger picture and are you seeing that there's maybe a move towards a more of a solidarity economy? Or do you feel like this might just get bigger and bigger? Because, you know, some might say the size of Airbnb and Uber are so big that it can be really hard for a cooperatively-owned platform economy to actually compete. There's a lot of discontent, especially among the Uber drivers. I talked to a bunch of them, and I read their message boards where they post their complaints.

So a lot of people feel betrayed and cheated by the promises they heard when they got into driving for Uber. And then they find out the reality of it is something very different. There's a lot of bitterness about that. I talk to drivers who, perhaps not knowing that the drivers also rate the riders, they say that the fact that the riders rate the driver at the end of every ride on a one to five star scale, they get really uppity about it.

And like one driver told me a story of having a passenger say, run red lights, I want to get there in a hurry. Like, you know, drive really recklessly, I want to get there in a hurry, or I'll give you a bad rating. And if a driver gets a bad rating, they get disabled, I think is the term they use.

They're fired. So the drivers are constantly nervous that they're going to get bad reviews because they'll lose their job very, very quickly. It's not something that happens over a period of time. It can happen very quickly. So there's a great deal of resentment about that, the pressures they're under, not making much money and yet being constantly evaluated like that. But something that does perhaps threaten the growth of the sharing economy

is that financing conditions are getting a lot less friendly now. The Federal Reserve pumped an enormous amount of money into the financial system after the financial crisis of 2008, they're now withdrawing some of that money. They stopped pumping in and they've begun to withdraw some of it. And we're already seeing crunchiness in some of the financial markets, and a lot of the venture capital money is drying up. So Uber's valuation is so preposterously high that it could possibly never make enough money to justify all the money that's been put into it.

So, as the financing conditions get less friendly, some of the, certainly the newer entries are going to have a hard time making it. But even some of the older ones might, too. I don't know if Airbnb or Uber are sustainable over the longer term without that constant infusion of fresh capital coming from the guys in Palo Alto. So that's something that threatens the long-term viability of these things. Now, as we talked earlier about the possibility of maybe setting up kind of a cooperative platform that's driver-owned, driver-run, that too would need financing to get it going. And it's hard to see where that might come from. Certain venture capitalists are not going to fund that kind of operation. So maybe we could imagine some philanthropies or governments or something could fund it, but no, it does need funding.

And as the financial markets get less accommodating now, it's going to be harder to find fresh sources of funding. So we have to think about how to get that going. So this idea, though, that the Airbnbs and Ubers of the world are going to continue to grow indefinitely may run up against the reality that the financial markets are not as accommodating as they were a couple of years ago. And then the other question that arises for me is, if you have a system that is mainly run by companies that are profit-driven, profit is the bottom line, and then you have the introduction of other types of companies or organizations like cooperatively owned organizations or B Corps or, you know, companies have a triple bottom line, things like that. You know, can they compete against profit driven organizations if the system values those profit

driven organizations? Like I was talking to a friend recently who said, you know, communism or socialism can only work if everyone abides by it. It doesn't work in kind of a mixed model. I'm wondering, especially with your historical perspective of, you know, how, like, what would that look like if we did see this rise in cooperatively owned platforms? Like, could there be a turning point or do they really not have a chance? Well, I think there's some areas in which publicly run or socialized systems are more efficient. The most glaring example of that would be health care finance. The public systems outside the United States do so much more efficiently than we do.

Costs are much, much lower. And the private insurance is extremely inefficient. It adds layers and layers of administrative bureaucracy that eat up about a third of our health care costs. So that's one example where socializing the system would actually lead to greater efficiencies and lower costs. the system would actually lead to greater efficiencies and lower costs. But on the other side of things, something like Uber or Airbnb rely on driving down costs and underpricing existing providers. That would be very, very difficult for cooperative models to compete with. We want cab drivers, for example, to be better paid, not worse paid.

We want them to be able to have good benefits, vacations, things like that. And now they have none of that. And one of the ways that Uber has succeeded in some cities, not all, but some, is succeeded by underpricing existing cab drivers. And that's not the direction we'd like to go in. We'd like to see cab drivers better paid, not worse paid, have more security, not less. And they can't compete in a conventional market against that kind of drive to lower prices, lower costs, lower wages. There's no way a more humane model can compete with that. So you would need much more severe regulation in order to make that happen or just drive those guys out of business one way or the other. Because there's no way that a cooperative or socialized system could

compete with these ruthless cost cutters. Yeah, so it sounds like we would need a better welfare system for, you know, a better social net system for folks. And then also, we've been reading about the idea of potentially a basic living wage. So something like that, there would need to be certain protections or certain help for people to be able to have these kind of more cooperatively owned platforms. Would you agree with that? Yeah, I would say two things about that.

One is that having a decent welfare state would make it in some ways easier for people to be entrepreneurs. If you knew that your health care was paid for, you might take an economic risk that you wouldn't otherwise. So the social democracies of Scandinavia that Americans like to make fun of sometimes are actually extremely innovative. extremely innovative. And it's because so much of the risks of economic life are insulated against by the provision of a decent welfare state that people can take entrepreneurial risks. So the American way of doing things in which basically nothing is provided for you and you're just entirely cast in your own resources doesn't actually serve entrepreneurship necessarily the way some of this professional ideologues would have you believe.

I would say that being able to have a really decent framework of social welfare being provided for, that would make it a lot easier for people to take adventures in life. to take adventures in life. If you had a basic income, that would also make it impossible for ruthless cost-cutters to impose their model on everyone. That's like, if they started driving wages down so low

that it went below the basic income, that would make it very hard to get workers then. So having some sort of floor under living standards, broad floor under living standards, broad floor under living standards, would also make it better for these kinds of uber models. They just couldn't cut the wage below a certain subsistence level because people wouldn't have to be forced to take whatever was on offer. They would have other choices. And that would also make for a less brutal society than the one we live in. it as the looking around your life, you know, in need of extra income and saying, okay, what can I commodify or what can I capitalize off of, you know, oh, my parking space and my clothes in my

closet or, you know, my car, that kind of thing. I'm wondering if you've looked at that and how that maybe has affected people. Oh, yeah, absolutely. It just leads to such distorted consciousness and such a terrible view of the world that the consciousness of a real estate developer who looks at an empty field, says, oh, let's just knock this down and build a housing development here. That kind of attitude is being spread throughout the entire society. There's nothing that it seems that people don't want to put a price on. And for younger people who've grown up in a world where they haven't known a different way of doing things. For older folks, people my age and older, we didn't grow up in a world where everything had a price tag on it. It certainly was tending in that direction for sure. But the intensification

of the capitalization of it, the commodification of everything we've seen since the early 1980s, it's now pervasive that people just see everything as a commodity or a potential commodity, and the commodifying nature to an unprecedented degree, commodifying the air, the water, our emotional lives, our bedrooms. It's very depressing to think of that kind of monetization of social relations, the complete monetization of social relations. We've been tending this way for centuries, andism is many centuries old and it's been spreading that consciousness and that model into more and more areas of life. What we've seen over the last few decades is

commodification of a lot of domestic life, food preparation, child care, elder care, sort of what used to be the exploited, unpaid nature of labor of women. Let's say that a lot of what women used to do for free, the cooking and the care for others, the care for dependents, is now getting turned into commodified labor done disproportionately by very low-paid women, but there is that pervasive commodification of everything. It's just become, to I think especially younger generations, it's so normal now that it's impossible to say, like, stop, there's something wrong with this, we're losing something. We're losing parts of our humanity by monetizing everything, and it's this so-called

sharing economy, by commodifying sharing even. It's just a further brutalization of life. I know that when we play this episode, a lot of people are going to be thinking, okay, well, what can I do about it? What should I do? Should I not use Airbnb? Should I not use Uber? what should I do? Because people do want to be able to put all that they're learning into action and live in integrity with the values that they have and what they're learning is the real reality or, you know, things like that. And so I'm wondering, you know, you've challenged people to think about the impact, right? So that when you sign up for an Airbnb rental or an Uber, like who are you impacting or what industries are you

impacting? Just to kind of be more aware of that. So you've said that kind of think about your impact, you know, but you've also said that you still use Uber, you know, because you said it's good for the consumer. So I'm wondering, you know, what are some of the behavioral changes that maybe you've done since you've learned about the sharing economy and also all that you've learned about economics and economic history and maybe some things, you know, not like prescriptive, like everyone should do this, but, you know, invitations for people to maybe think differently about the ways they consume or the ways they travel or even, you know, like we have a presidential election coming up, you know, should people be thinking about the different candidates surrounding these particular issues? Because I know you've written a little bit about Hillary and different candidates. So I'm wondering if you have any kind of behavioral invitations or action steps that people can take now after learning about all this.

action steps that people can take now after learning about all this? Yeah, as I said earlier, you can't keep your hands clean in a dirty world. It's very, very difficult. My wife wrote a book about women workers at Walmart and the systematic exploitation and sexism at Walmart. And people would ask her, should I not shop at Walmart? And a lot of people don't have any choice to shop at Walmart because of location or price or whatever. It's very, very difficult to, I think Theodore Adorno said, wrong life cannot be lived rightly.

So it's hard to do these things on your own as individuals. And in some places, if you need to get from point A to point B, sometimes you have no choice but to use an Uber. Or if you want to go on vacation, you might find it impossible to afford one without using Airbnb. Or if you are desperate for a little money and you might want to rent out your spare bedroom or your spare couch or whatever. So I wouldn't say that individuals who use these things are being immoral or wrong. These are political questions. We need to have organizations like unions and cooperatives and then government regulation. We talked earlier about the benefits of a broader welfare state,

of a universal basic income. These things are all political interventions that are going to make life better and more just and more stable and less brutal. But I don't really think that individuals on their own can do much to change things. We really need to get together on a collective level to change these things at the political realm and not just think that individual behavior can change much of anything. So do you have any examples of political actions that people can do or campaigns people can

get involved with? Well, I think, for example, any kind of political campaign that people can do or campaigns people can get involved with? Well, I think, for example, any kind of political campaign that seeks a broader welfare state, that seeks a better health care financing system, city governments that might want to regulate Airbnb and Uber, support those sorts of efforts, support efforts to unionize drivers in Uber and Lyft. Do what you can to raise consciousness, too, as well. I mean, people said earlier that people don't necessarily think about the consequences of using Airbnb or Uber. I'm not one to feel guilty. I just want to think then about what we might do to change this world and make it better for everyone, and political efforts to regulate these enterprises and to provide broader economic changes that would make the labor market more humane.

Those are the sorts of things that people should think about and do. One of the effects of neoliberalism over the last 30, 35 years has been to erode people's sense of political possibility. They tend to think in very individualized terms, and even their sense of doing good gets very individualized. It's just whatever consumption choices they make. You can see this with a lot of environmental things, for example. If you buy the right products or recycle or do these sorts of things,

it will help, no doubt about it. But what we really need to avoid environmental catastrophe is really large-scale efforts to come up with cleaner forms of energy and less destructive and wasteful ways of manufacturing and distributing commodities. Individual behavior is not going to do too much to change that, but people don't always think in those terms. They tend to think first of either. Those who come to some degree of consciousness, that is.

A lot of people just carry on life without thinking twice about what they're doing, but those who do think twice about what they're doing, they tend not to think about how we can get together in large groupings politically as parties or organizations or whatever. They tend to think of smaller scale individual actions, but we need to get beyond that and go against this neoliberal trend in which we're all just lonely individuals in this world making choices and think about more solidaristic models of organization and action. That's what people need to think rather than just what kinds of good choices they can make when they shop.

Wow. Well, thank you so much, Doug. This has been a really great conversation and I really appreciate all your wisdom and all the work that you're doing. And I'm wondering if you have any upcoming projects that you want to tell us about, or if you have any kind of websites you want to point people to, to learn more about you and the work that you do. Well, I do a blog every now and then. It's lbo-news.com. And I also am just out with a book about Hillary Clinton, My Turn, Hillary Clinton Targets the Presidency, from Orr Books, which you can get from the Orr Books website. So that's the thing I'm touting presently, the awful history of Hillary Clinton, and figure out what she's really all about, despite her current rhetoric.

But that's a topic in itself. Wonderful. Well, thank you again so much for your time. Really appreciated it. Thanks for having me. You've been listening to Upstream, which is part of the Economics for Transition project. To listen to more interviews and episodes, please visit www.economicsfortransition.org. The smoke is rising in the hallways Flowers blooming from our boats that break Into the morning we run To shoreline

Calling us to speak outside Waves under the earth and rocks Casting ghostly shadows, tall like niles Fire to the sea As we set fire to the sea As we set fire to the sea Snowgates rising in the hallways Flowers blooming from our boats that break Into the morning we run

To the shoreline Calling us to speak the sight Blades under the earth and pearls Passing mostly in shadows Tall like giants As we set fire to the sea As we set fire to the sea As we set fire to the sea As we set fire to the sea

As we set fire to the sea As we set fire to the sea Succes! I am the light of the world. © BF-WATCH TV 2021 Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh,