Last week I saw this pro consultant on Linked In … a colleague, you might say, in the great consulting constellation … trying to do a take down of Uber, Airbnb, Instacart, etc. The influencer, Victoria Pynchon, was essentially ripping off that great font of economic misunderstanding, Robert Reich, who’d published this absurdity on Salon.com the week before.
This discussion just cries out to be swatted. The reason is that if we even begin to accept the premises, we are sunk … our understanding of economics and business -human organization, for that matter- will be hopelessly flawed.
These pieces make the argument that proprietors of software driven business models that create liquid marketplaces where none existed before (think eBay) are the new “exploiters”, busily destroying the “middle class” and sowing alienation among the proletariat.
Apparently, Uber, Airbnb and Instacart are stealing the real value of participant’s assets and time. The math is a bit fuzzy, but according to Pynchon and Reich, there is no way you are getting fair recompense from Uber for picking up someone at the airport, or renting out your guestroom on Airbnb. At least give Ms. Pynchon props for trying to unpack the economics (even if she demonstrates she slept through the concepts of sunk costs and opportunity costs in Econ 101).
Contrary to the argument that Uber, Lyft and Airbnb are taking a free ride on your assets, they are actually helping you recover a portion of the sunk costs of owning a car or home. Meanwhile they remove the opportunity cost of deciding whether or not to open a Bed & Breakfast or buy a Taxi Medallion. How good is that?!
Underlying both arguments is another, more pernicious idea that the participants in these schemes -the drivers, shoppers, and room renters- are desperate, Skid Row types who’ve been cashiered by the modern economy and left to the scraps thrown them by the fat cats who run Uber, Airbnb, Amazon and others.
Let’s dissect Reich for a minute. He thinks these businesses represent a new low in the history of capitalism because they don’t provide full time jobs. These firms, in his little mind, are immoral because they don’t make you an employee, give you healthcare benefits and a full pension. So, even though they create a market for your talents and assets that NEVER existed, they actually destroy things.
Say what? Dude, I’m just trying to rent my cottage! Or make a few bucks between client gigs driving people to the airport!
Apparently, I’m too stupid to make these choices and understand the deal. Thank goodness Father Reich is there to save me. Thank goodness Ms. Pynchon is there to suggest these businesses need to be regulated so as to protect the “laboring classes.” And the sooner the better! (By the way, who in the world calls people the “laboring classes” anymore?)
I’m never quite sure how we come to ascribe the term “liberal” to these points-of-view. They are actually Luddite … the height of reactionary response to innovation.
Folks like Reich and Pynchon appear stuck in a frame of mind that seeks a corporatist future as the ultimate objective and end state for modern society: Government elites lording over an assemblage of giant corporations. The elite know-it-all’s direct the operation and “the people” all have safe, little, life-time jobs in the corporations.
The corporations translate the will of the elite and transmit the benefit package. Shut up and take your medicine!
This kind of sharing is somehow good. Your kind of sharing … one that is unregulated, free, full of trade-offs, successes and failures … is very bad. Got it?
Friends, this isn’t progressive, this is fascist … and the true road to the middle class (i.e., all of us) becoming peasants.
You have it completely backwards. And unregulated business is an animal that will always go for the bottom line without respect to employees who make it work. Free trade is a fine goal. But, because of human nature, free trade becomes oppressive and no longer free when it abuses the workers and rights of others.
Who, pray tell, is being abused?