Economist and author Juliet Schor writes about the new economic realities we all face -- there are fewer jobs to go around, things are more expensive, and our economic model is depleting the planet. (Check out her book, Plenitude: The New Economics of True Wealth. The paperback version is titled True Wealth: How and Why Millions of Americans Are Creating a Time-Rich, Ecologically Light, Small-Scale, High-Satisfaction Economy.)
Many of us are choosing to live our lives differently. We're sharing things instead of buying them. We're making things and collaborating in creative co-working arrangements. We're being more thoughtful about the things we do buy.
I really liked my conversation with Juliet. Let me know what you think about her points.
Sara Horowitz: One thing I found particularly interesting in your writing — like your recent Op-ed in the New York Times — is the realization that work is becoming more piece-meal. People are thinking in terms of units of work -- it’s like you have a cumulative revenue stream made up of different elements. You might be crafting, you might have a part-time job and you might rent your house out on Airbnb.
Juliet Schor: It’s a portfolio lifestyle. I call it the “post-industrial peasant model,” although I took that terminology out of my book because I was worried about negative reaction to it. But this is very much the way peasant households operated: labor demands were variable across the year, and they had periods of downtime where they could do other things—such as spinning, for example. They had a varied set of activities and streams of income, and different forms of access to goods and services, such as bartering. That’s where we’re headed, and it’s got both negative and positive dimensions to it.
Sara: Right. And I’m not even sure it’s a useful argument to ask if it’s a good or a bad thing. But one thing I do think about is how all these share-economy and peer-economy platforms are almost universally funded by venture capital. These are great companies, and I think venture capital has an important role to play, but ultimately we have to get a social-sector response that has to do with ownership, right? What do you think?
Juliet: We need to build sharing economy platforms that are not privately owned, but whose purpose is to serve the users—where the communities of people involved are not at risk of being subverted for the purpose of making profit. Platforms that can stay true to their original mission.
I think of Zipcar as a company that really diverged from its mission. Its big goals were to reduce driving and car ownership. Then it started doing things like showing up on college campuses, which gives car access to a group of people who didn't have it before (because if you're under 25, you couldn't rent a car). That expands driving. And now Zipcar rents out SUVs through a deal with Ford. To me, that's a real subversion of what it set out to do.
That's what I worry about with the for-profits. Whatever their rhetoric, they are probably more committed to making money than they are to meeting the goals that they set out in their platforms.
Sara: I keep waiting for the social sector to jump into this. I think we’re seeing it in local, small initiatives dispersed around the country, but I’m not seeing any serious infrastructure being built. Am I wrong?
Juliet: I do think you only see it in small projects. Part of it is that developing the high-functionality software was expensive. But you also have an ethos—it’s a cultural issue, sometimes.
Sara: That’s so true. I feel like often, the progressive world is almost allergic to money and hasn’t created vehicles for people to build revenue-producing entities.
I think you have to start small. We built our own little group and started the Freelancers Insurance Co. from scratch. Then we worked our way up the food chain. And it’s owned by a nonprofit—there are no private shareholders— so the revenue gets put back into the organization.
We had zero premium increase for two years in a row, and we’re about to open our second medical practice where primary care is free. When you put the money back in, you start to see benefits pretty quickly.
Juliet: First there’s the learning that takes place at the beginning, as you start to create these new arrangements. Then, you have the issue of how to take that learning and spread it to other places.
But if you think about what the venture capitalist is trying to do, as always, capital wants to monopolize markets. So Airbnb, with all that money behind it, would be trying to dominate peer-to-peer lodging.
Sara: But now because of the technology, it’s so much easier to enter the market.
Juliet: Right. Now it’s going to be hard for these businesses to stop new entrants. Any group of people could come together to do these things. It’s not like other industries, where the business itself is providing a lot of value—here, it’s providing a basic ratings and reputation system, and a website.
*Sara: It’s funny, I actually recently stayed in an Airbnb in Portland, and it has this nice feel to it, so it does have something that's different. But what I'm really noticing lately is how we expect individuals to transact with other individuals, or individuals to transact with government on an exchange, or individuals to transact with a company. We've lost this idea that people are part of a group. *
So we need to get a group brain on a culture that is hyper-individualized. And we’re seeing things emerging.
Juliet: When you say emerging, you’re talking about new economics. The peer-production movement—or the peer-to-peer movement—is something that new economics as a practice needs to pay a lot more attention to. This technology is enabling new kinds of economic relationships.
Sara: Right. And I feel like there’s this chasm. You have the Silicon Valley/San Francisco world where these platforms and products are created—and the projects really are great—but then, where is the social-sector response? Where are the projects that are trying to make this world better?
Juliet: That’s critical. We’re starting to see a little more understanding of how important this is. The government of Ecuador is working on a whole peers-movement project and there are really exciting things going on in Brazil—one of which will be relevant to you because it’s a huge collaborative of freelance musicians. And there’s activity going on in Europe, too.
Sara: Interesting that it’s mostly outside the U.S. But I do feel like it’s popping up here. It’s not organized, and it’s not where it should be, but it is emerging.