Why the Peer-to-Peer Economy is Working
Interesting article in the NYTs Opinion section today about how we as a society have evolved around issues of trust to form a true peer-to-peer economy.
P2P, in this case, is an open network where “peers” offer shared access to services/products. It’s this economy that has spurred companies like Uber and Airbnb. It is an economy built on trust and self-regulated through online reviews and word-of-mouth nods.
What I found most interesting in David Brooks’ essay is how he says he underestimated the success of these types of companies. This is probably due to his age and station in life, no fault of his own. He does, however, win kudos for recognizing his error and offering up valid and sound reasons as to why he thinks these companies are succeeding.
“First, I underestimated the effects of middle-class stagnation. With wages flat and families squeezed, many people have to return to the boardinghouse model of yesteryear. They have to rent out rooms to cover their mortgage or rent.
Second, I underestimated the power that liberal arts majors would have on the economy. Millions of people have finished college with a hunger for travel and local contact, but without much money. They would rather stay in spare rooms in residential neighborhoods than in homogenized hotels in commercial areas, especially if they get to have breakfast with the hosts in the morning.
And the big thing I underestimated was the transformation of social trust. In primitive economies, people traded mostly with members of their village and community. Trust was face to face. Then, in the mass economy we’ve been used to, people bought from large and stable corporate brands, whose behavior was made more reliable by government regulation …
The result is a personalistic culture in which people have actively lost trust in big institutions. Strangers don’t seem especially risky by comparison. This is fertile ground for peer-to-peer commerce.”