The ‘Sharing Economy’ is a Hoax

Time MagazineStop calling it the sharing economy. It’s an oxymoron, like ‘creation science’ or ‘sustainable capitalism.’ It’s not collaborative: it’s the new indentured servant economy. If you believe these corporations are all about sharing and collaboration, then you’re mightily gullible. You’ve been had.

These are big, multi-billion dollar corporations whose executives are millionaires. They are more akin to drug cartels than to cooperative economics. The economic similarities are evident: both use others – the users or subscribers – to break the law for them, to generate their wealth for them, to do their dirty work, then leave those users to face legal, moral and social ramifications – and costs – on their own.

What, you think the CEOs of Uber rent their own BMW’s or Audi’s seats out to strangers and drive them around when they’re not in the office? That the CEOs of Airbnb rent their spare rooms – and they have a lot in their mansions – to strangers for weekend stays? No: you do it for them so they don’t have to take the risks. They’re laughing at you all the way to the bank.

And to icing the cake: these firms get their service providers to put their own property and even their lives at risk – and the lives and safety of their customers – without having to compensate them for it! It’s a capitalist wet dream! A gold mine of cash flowing one way into the corporate coffers. Open another bottle of that bubbly, James, we’re expanding.

As Dean Baker wrote in the Guardian in 2014:

…this new business model is largely based on evading regulations and breaking the law… If these services are still viable when operating on a level playing field they will be providing real value to the economy. As it stands, they are hugely rewarding a small number of people for finding a creative way to cheat the system.

You’re not getting to “share” your home or your vehicle: you’re working for a company to help buy someone a new yacht. Someone who doesn’t give a shit about your welfare, safety or income. You’re contributing to the 1%. Shame on you.

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Apps are making us criminals

Uber protestAlmost every week you read in the news about another taxi driver protest against Uber and its drivers. Taxi drivers go on strike, some rage against Uber and attack the drivers or damage their cars.

Similar protests – albeit not yet as violent or large – have been made against Airbnb for its effects on local property values and changing social conditions like the loss of rental properties.

These are just two of the apps whose effect on our society and culture are challenging laws and policies. There are others now that attempt to clone the success of their competitors with similar service (like Lyft and Homeaway – but I’ll concentrate on these two as examples of what can and does happen).

And in the process making criminals of its users.

That’s right: using these apps, both as a service provider for the companies and a user of those services often breaks existing laws, such as zoning or licensing. Renting your home for short-term rentals through Airbnb, for example, is illegal in many Ontario municipalities – including Collingwood – because zoning bylaws prohibit short-term rentals in residential areas.

Municipalities worldwide are increasingly challenged by these and similar programs that function counter to municipal bylaws, policies and operations. And they eventually cost taxpayers money.

It’s not a small deal. These can hurt our economy, kill jobs, and put people and property at risk. The corporations that operate them don’t give a shit. They’re too busy laughing all the way to the bank every time you use them.

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Was Marx right after all?

While Marx didn’t say exactly that the “rich get richer and the poor get poorer,” he did state that under capitalism, poverty would inevitably increase while more and more wealth would concentrate in fewer hands. Increasing profits and increasing wages, he claimed, were contradictory. Adam Smith – the “father” of capitalism – said much of the same thing, by the way. They were right.

Karl MarxMarx’s economic and world views were fermented in the mid-19th century’s industrial age, an age without any of the mass communication technology of today. He was right about many things, but wrong about others. He did not, for example, see the rise of the financial class, nor did he predict the offshoring of manufacturing jobs. To be fair, none of his contemporaries did. But he got quite a bit right, given today’s economic crisis.

Nope, I’m not a Communist, let alone a Marxist, and certainly not an economist. But look around you: if you’re not a banker, investment or hedge fund manager, if you’re not the CEO of an international corporation whose products are being made overseas, if most or all of the manufacturing jobs in your town have moved overseas, if your wages are proportionately lower compared to your expenses than they were a decade ago, if your prospects of a good-paying job are slim because those are getting sparser in your city and being replaced by minimum-wage Mcjobs, or if you live in Greece, Portugal, Italy, Ireland or Spain, then capitalism has probably failed you.

I’m not the only one who thinks capitalism today has serious problems (its failings have been analyzed to the nth degree since the last recession and the US bailout of its financial sector). Many now think that perhaps we should not have dismissed Marx so cavalierly when Communism fell. And some of those who think Marx may have got more than one thing right are pretty prestigious thinkers.

Over at the conservative Harvard Business Review, Umair Haque, author of Betterness: Economics for Humans and The New Capitalist Manifesto: Building a Disruptively Better Business, wrote about Marx in late 2011:

Marx’s critiques seem, today, more resonant than we might have guessed. Now, here’s what I’m not suggesting: that Marx’s prescriptions (you know the score: overthrow, communalize, high-five, live happily ever after) for what to do about the maladies above were desirable, good, or just. History, I’d argue, suggests they were anything but. Yet nothing’s black or white — and while Marx’s prescriptions were poor, perhaps, if we’re prepared to think subtly, it’s worthwhile separating his diagnoses from them.

Marx, it seems, it getting a sort of facelift from intellectuals today; people are beginning to realize that after the Berlin Wall fell, that Communism – a fault-ridden, overly-bureaucratic system few will miss in the nations that cast it off – was not actually based on Marx’s theories, just used Marx as a sort of bumper-sticker economics, so perhaps the old guy deserves a re-think.

In spring 2011, Yale University Press published “Was Marx Right?“, by Prof. Terry Eagleton. He examines ten of the most common objections to Marxism and attempts to demonstrate “what a woeful travesty of Marx’s own thought these assumptions are.”

In an interview with Bezinga in August, 2011, noted economist Nouriel “Dr. Doom” Roubini stated that, “Karl Marx had it right. At some point capitalism can self-destroy itself. That’s because you cannot keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand.” Roubini continued, “We thought that markets work. They are not working. What’s individually rational…is a self-destructive process.”

The article that follows goes on to criticize Roubini for his comments, but makes the classic fallacy of not dissociating Marx from Communism, or rather from the systems that took the name Communism but were usually little more than military dictatorships with poorly implemented, centrally-planned economies, and only nodding allegiance to anything Marx wrote. It’s easy to point to the collapse of the Soviet economy and claim it proves that Communism and therefore Marx’s economic ideas were faulty. But that’s really Leninism, and not what Marx meant by “Communism.”

It’s popular among the uber-right in the USA to label anything left of Genghis Khan as “Communist” or “socialist” but that only underscores the intellectual poverty of the right. It doesn’t actually mean anything in the political debate except that you’re arguing with fools.

Communism as Marx saw it was never actually implemented, and probably never could be today. We’re as far from his industrial age world as the Internet is from Gutenberg. But that doesn’t mean that every aspect of Marx’s thinking was wrong. Despite being drearily dense and notoriously difficult to read, his economic works contain some valid points about capitalism that – like his predecessor Adam Smith’s writings – make some salient points about capitalism that we can’t reject by tossing them out with the Soviet-tainted bathwater.

None of the above writers would be classified as Marxists or even neo-Marxists, but there are still some old, dogmatic Marxist thinkers around who treat Das Capital as gospel. As Mike Beggs wrote in Zombie Marx,

What I call Zombie Marx is different – the reanimation of a corpse which still holds organically together in some way. This is the reconstruction of Marxist economics as a coherent body of thought, not a collection of quotations… the need to ground everything in a 140-year-old text…. it is obviously a lot of intellectual hard work to “interpret Marx correctly.” It cannot be taken for granted that Marx was right; it must be proven anew with each generation, against both rival interpretations and the revisions the previous generation had found necessary to make.

Marx got some things wrong. And he got some things right. That’s pretty much true of every economic theory or policy since Adam Smith. Marx was probably more right than some – say Alan Greenspan, whose disastrous economic polices have led to much to today’s problems – but I think the point here is that we should be re-evaluating Marx in light of today’s failing capitalism and not simply dismissing him as the tail wagging the Communist dog.

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