Trade Me and internet shopping has revolutionised the way we shop for things. These new businesses use better faster, internet and mobile technology to revolutionise the way we chose services.
It is the purest form of market economy, the modern equivalent of having goods or services to spare which you take to market. A spare room, a spare seat in your car, spare time and an internet connection is all you need to establish a trade with someone wanting a room for the night or a ride to the airport.
This new method of matching people’s needs with ways to satisfy them means we are fast becoming a brave new world of entrepreneurs and latter-day capitalists. The free market is more alive and in better shape than it has been for centuries. Individuals are suddenly finding they can release spare capacity in their most expensive assets, their homes and their cars, to make money which they can then exchange for other goods. And this is just the start of a new revolution in which we, the people, take control of our lives and wrest it back from overbearing government.
As happens when there’s a revolution there are some who get hurt. Traditional service providers such as taxi companies and hotels and motels are suddenly facing competition from a more flexible source. They don’t like it and some of them are being driven out of business. They complain to the government. Like retailers before them they will discover there is no point bemoaning their lot. They cannot fight a million individuals making a million different decisions a million times a day. Either the service providers adapt or become extinct. It’s the natural way of the world.
The other group upset by changes they cannot control are the tax gatherers. Like the barons of old they still want their ‘share’ of action either to keep for themselves by way of higher salaries or to distribute as ‘largesse’ to those they choose. A recent Herald article looked at the response to the new market.
AirBnB was established in 2008 with the initial concept literally an air bed and breakfast -- an air mattress in the lounge and breakfast in the morning - somewhere in between couch surfing and a youth hostel. The business has boomed in the years since, now offering accommodation at all levels of the market - be it a spare couch or a luxury villa. AirBnB has more than 1000 accommodation options available in New Zealand alone.
Uber is now one of the 150 biggest companies in the world, it's value eclipsing US$40 billion and leaving behemoths of yesteryear like FedEx in its dust. AirBnB is valued at $13 billion - about half as much as Hilton Worldwide.
However, both still operate in a relative grey area of the law in New Zealand - and the ongoing political divide seen internationally could be a sign of things to come here.
Opponents argue the services are not sufficiently regulated and are fertile ground for cowboys looking to make a quick buck, with the stringent requirements expected of licensed operators and the costs to meet those creating an unfair playing field.
We've seen the Government step up to the plate with laws around crowd funding and crowd lending - very much a work in progress on which the jury is still out. The sharing economy must be next on the agenda - to provide certainty to workers, to ensure that safety and best practices are followed regardless of the operator, and to make sure government coffers are taking their fair share - not forced into a situation where they're playing catchup a-la online GST.
Erstwhile socialists have been transformed into capitalists overnight as they discover the benefits of the new market economy. They have found that sharing is indeed caring. I know of state dependents and beneficiaries on Waiheke who have suddenly found they no longer have to rely on the government…and it feels good. Their self esteem has grown along with their income. They’ve discovered that with just a little effort they can in fact rely on themselves.
This is bad news for socialism, that pernicious twentieth century doctrine. Even as the storm troops of socialism, the tax gatherers and planners, dream up ways of stripping the modern capitalists of their wealth technology companies and entrepreneurs are discovering more ingenious ways of using the internet superhighway. The storm troopers problem is they plan ahead with yesterday in mind and this blinds them to the possibilities of tomorrow.
Socialism reached its zenith in the 1990s. Since then it has been dying. Very soon we will be able to say we are all capitalists now. The future of the world has never been brighter.