Two powerful economic trends have emerged in the past few years as divergent vectors: on one hand, global financial markets propelled by algorithmic trading and a financial industry rapidly moving into the outer orbits of abstraction, and on the other hand, the ostensibly empowering, earthy peer-to-peer “sharing” economy exemplified by wildfire concepts such as AirBnB and Uber.
Interestingly, when viewed a certain way, these two economies present evidence of the widening class divide between humans in 21st century societies, something I referred to as the Great Social Bifurcation. In the Great Social Bifurcation, you get a society in which there are two camps: Camp 1 is the wealthy, educated, secure, tech-savvy elite, and Camp 2 is the impoverished, undereducated, crime-ridden, resource-poor masses. Kind of like a banana republic.
Of the global financial markets, there is little more to say than the facts that they are increasingly interconnected, increasingly computerized and programmatic, increasingly abstract, and hitting record highs. It’s not your grandfather’s market, to be sure. But rather, as J.E. Foltz argues persuasively in her great book Market Whipped and Not By Choice, the new market is nothing more than a powerful MMORPG. Reserved, of course, for the global corporations, big banks, and the “one percent.” The market is simply too big and complex for everyone else but Camp 1.
Of the sharing economy, there has been much hype and excitement, because it feels disruptive and personally liberating. Here is a good overview of the bright side from The Economist. Because you can now monetize your possessions, and access the possessions of others without owning said possessions, many feel entrepreneurial, independent, and in some way thrifty.
Of course, the old economies of taxi cabs and hotels around the world, burdened by regulations, have protested these new business models. See this example from the UK. But even such protests fuel the hype and the sense of liberation that comes from the disintermediation at work in the sharing economy.
Another, more important point of view, beyond the hype of the Silicon Valley companies building big valuations on their shiny new business models, is that the sharing economy is a Camp 2 economy, an economy of non-elite, declining-class people scraping together every resource they can monetize to make ends meet. What Susie Cagle calls here “disaster capitalism.” It’s sharing in the vein of some old depression-era tale of Dad losing his job and the family taking in a lodger to help pay the mortgage.
For more, Alexandra Le Tellier has a great piece on the impoverished context of the sharing economy here.
The industries in the middle (the “middle men” being cut out, such as hotels and cab drivers), like the entire middle class in the US, have raised a feeble protest and will likely soon begin to dwindle in numbers. The speculating 1% are wealthier than ever; the 99% take in lodgers; and the middle disappears. That’s how the Bifurcation seems to work.