The sharing economy is just another status wank
The sharing economy is getting a lot of attention in marketing circles, but Eaon Pritchard argues it’s less about trusting our fellow man, and more about status seeking.
The techno-hippies at Wired magazine recently celebrated the emergence of the so-called ‘sharing economy’ (as epitomised by peer-peer services like Airbnb and Lyft) as a ‘set of digital tools that enable and encourage us to trust our fellow human beings’.
Then a response from New York magazine indicated that this is perhaps less about trust in the kindness of strangers and more about a sense of desperation brought on by an economy that that has forced millions of people to look to ‘odd jobs for sustenance’.
At the risk of sounding like one of those irksome British planners that Adam Ferrier describes in his piece below – you know, the ones that over-intellectualise and ‘go on a bit’ – I propose that there is another explanation for this current infatuation with the so-called ‘sharing economy’ that starts with considering some of the ideas Thorstein Veblen outlined in ‘The Theory of the Leisure Class: An Economic Study of Institutions’ published in 1899.
[In my defence, I’m Scottish rather than English and therefore my own university studies were less focused on Philosophy, Letters and Latin and leaned more towards advanced drinking techniques, worrying sheep and strategies to avoid spending money.]
Veblen’s ‘The Theory of the Leisure Class’ is a detailed social critique of ‘conspicuous consumption’, as a function of social-class consumerism as relevant today as it was in the 19th century.
Veblen was probably one of the great grandfathers of behavioural economics.
His view of people was generally one of ‘irrational creatures who relentlessly pursue social status with little regard to their own happiness’. This was clearly counter to the dominant classical economic theory.
When Veblen describes nineteenth-century aristocrats as spending their ‘leisure’ time fox hunting or learning obscure languages he says; that in order to be successful (as a signal), the signs of this conspicuous display needed to portray themselves as at least superficially useful or socially beneficial.
That is, it needs to pretend to be something other than what it really is. Eg: fox hunting as some sort of duty to protect the livelihoods of serfs/farmers. The learning of obscure languages is probably the 19thC equivalent of our reading of self-help books.
Perhaps compare these 19th century aristo behaviours with some of today’s celebrities.
Bono, for example, while his celebrity credentials may be on the wane – and he is not likely to trouble the pop charts again any time soon and therefore has bugger-all to do all day – turning up at the UN to save the world is helping to resolve some sort of cognitive dissonance around leisure and privilege.
Don’t even get me started on royals.
The language of this sharing (or collaborative) economy manifests in terms like ’empowered people’, ‘co-creation’, ‘peers’ and ‘crowdfunding’, yet this movement’s poster child – AirBnB – closed its latest round of funding with an injection of $500 million, led by private equity firm TPG.
Because these imagined socially beneficial properties of the so-called collaborative economy serve to solve a cognitive dissonance for buyers of those services.
It disguises the real motivation – which is, of course, status-seeking.
In other words, it’s marketing.
The idea of a ‘sharing economy’ is simply an extension of our culture’s other dominant marketing idea – conspicuous authenticity.
When the big supermarkets joined in the ‘organic’ game a few years back one would have imagined that those who truly believed in the benefits of organic produce would have welcomed this as a good thing.
Now that ordinary shoppers could have access to organic produce then surely that would mean we would all have the opportunity to eat healthier and live in a better environment, right?
But the more organic became available to the mass of ordinary consumers, the less it is serves as a source of distinction for the status seekers.
Hence the original organic brigade moved on to ‘local diet’ as the next logical step. Then when that caught-on then ‘artisanal’ became the next expression of more-authentic-than-thou. ($8 toast, anyone?)
In ‘The Authenticity Hoax’, author Andrew Potter describes a ‘basic fusion of the two ideals of the privately beneficial and the morally praiseworthy’ as the ‘bait-and switch’ (or cognitive dissonance) at the heart of ‘the authenticity hoax.’
‘This desire for the personal and the public to align explains why so much of what passes for authentic living has a do-gooder spin to it. Yet the essentially status-oriented nature of the activity always reveals itself eventually.‘
This same bait and switch is at the very core of the collaborative economy. Which is fine, as long as we recognise this.
The collaborative economy is no revolution. It is ordinary consumerism, built on the same economic system and appealing to the same ‘irrational creatures who relentlessly pursue social status with little regard to their own happiness’ as described by Veblen in 1899.
The the collaborative economy is pure marketing of a kind of fake authenticity that solves a cognitive dissonance problem for status-seeking consumers – their (pseudo) anti-consumerism hipster beliefs clash with their regular consumerist behaviours, so using the likes of Airbnb or LeftoverSwap allows them to tell themselves a story about authentic living with a do-gooder spin.
To paraphrase Potter, we live in the world of bullshit, but as long as you know it is bullshit, and as long as they know that you know it is bullshit, then it’s a game we can all play.
As the bottom inevitably fell out of social media marketing as a thing a whole slew of social media analysts and such like have had to move on somewhere in order to dodge the rubble falling down around them.
A new shiny object was required.
Enter stage right; the sharing economy.
But don’t go lighting the campfires and singing Kumbaya just yet. The sharing economy is simply the new keeping up with the Joneses and the good old branding and consumer capitalism that we advertisers love.
Eaon Pritchard is strategic planning director, Red Jelly Australia
- For an alternative perspective, visit the session on collaborative consumption at Mumbrella360 next week.
” . . . we live in the world of bullshit, but as long as you know it is bullshit, and as long as they know that you know it is bullshit, then it’s a game we can all play.” Sums up most marketing.
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” . . . we live in the world of bullshit, but as long as you know it is bullshit, and as long as they know that you know it is bullshit, then it’s a game we can all play.” Sums up most marketing.
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and here was me thinking Air BNB was all about wanting to rent a decent apartment for half the amount a 5 star hotel would charge.
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Does anyone know where i can rent an authentic Afghan open-source composting toilet in Fitzroy?
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In ‘The Snowball’ by Alice Schroeder, Warren Buffett’s ‘internal scorecard’ is referred to as his own true measure of worth. If this account is correct, we have a man worth billions of dollars living relatively humbly, pursuing simple amusements and maintaining an unsophisticated dietary regime (Twinkie bars IIRC). Yet he has joined forces with the Gateses to create one of the largest and most effective philanthropic ventures in history. I don’t think he’s doing it for status, and I don’t think he’s doing it to be authentic. I think he’s doing it for his own ‘internal scorecard’. Maybe he’s the exception to the rule. But this measure resonates with me.
I enjoy the sharing economy; it means I can comment and contribute on a site like this rather than just read the article. My leisure time pursuits are admittedly arcane and highly discriminatory, so the sharing economy allows me to engage with like-minded people around the world. But I have my limits as to what I’m going to share, hence my anonymity.
Our sentient minds seek to differentiate ourselves from our cluster. Mine as much as anyones else’s. What you have described is just one (admittedly widespread) manifestation of that, but I’m not going to sit there and tell my friends their pursuits reflect their faux authenticity.
What I’m going to do is continue to enjoy their company and use my ‘bullshit calibration device’ as a tool when I’m on the job figuring out how to encourage others to buy things.
I think the post-employment ‘leisure class’ is the big worry. If we can’t get a job after the age of 50, and live to be 100, what are we going to do with half our lives?
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Is the toast gluten-free?
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“The sharing economy” … hmn. I encountered that once-upon-a-time spending three months in a remote village in Kenya. My “inner Marxist” loved it, but here? Yes, simply a wank, unless we start putting lamp posts and hemp to better use.
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Dear Eaon,
Thank you for your thoughts and I agree with you. But, really, is there any trend or movement that’s embraced by the fortunate leisure class that’s not categorised as a w**nk?
The thought behind the movement is honourable and enables this exchange we’re having. The share economy also comes with the promise to reward creative and thoughtful people hence taking the power away from monolithic giants that have dominated the economy. The financial monoliths have jumped on the bandwagon, pouring capital into these ventures but hey, at least the facades are more creative, colourful and there are masseuses and the ubiquitous ping pong tables in the mix. The job market really needed this facelift and the IT people need to make the most of this Renaissance.
It’s exciting times. Like all revolutions. But as Pink Floyd put it, “up and down and in the end it’s all round and round”.
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You mean Coke wasn’t “The Real Thing” ?
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That really cheered me up. Nice one Eaon
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There’s a range of motives behind the sharing economy – social, economic, and yes, status, but when you survey the scope and reach of sharing schemes (http://www.collaborativeconsumption.com/), there’s no doubt it’s an important trend for all companies to examine. Renting rather than buying, or “gifting” platforms such Freecycle, are displacing the sales of new products. And it’s not just producers that will be affected by lost sales, but the whole supply chain, plus government tax revenues.
Several big brands are already experimenting by running rental schemes alongside their traditional sales, such as Daimler’s Car2Go, and Home Depot’s tool rentals. In the US, Avis decided if you can’t beat ‘em, buy ‘em and purchased the largest car share scheme, ZipCar, in December 2012 for $US500m. In Australia, Bunnings offers tools hire, Hertz purchased car-share scheme Flexicar in 2010, and has launched Hertz24/7, and the Stockland Property Group hosts Open Shed outlets on their properties, a scheme that facilitates sharing of tools and other household gear.
While most sectors face declining sales because of the sharing economy, there is an upside for luxury brands. Consumer segments who could previously not afford to purchase high-end products, can now access them through a range of, for example, fashion swapping or renting sites including Girl Meets Dress, Wish Want Wear, My Sister’s Wardrobe, The Clothing Exchange, and Bag Borrow or Steal, which exhorts us to: “Be a fashionista on a budget by renting designer purses and accessories from Bag Borrow or Steal – as seen in Sex in the City!” Such sharing platforms provide for a significant expansion of the potential customer base of premium brands, together with a host of new distribution outlets.
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@Ellen. Nice one.
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No-one is claiming that the sharing economy is going to fundamentally alter human behaviour just that its a better way of functioning en masse. If you’re saying that the pursuit of social status ultimately results in the normalisation of progressive thinking and innovation then I’d see that as a good thing.
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Marketing’s goal is to convince us to buy stuff we don’t need to impress people we don’t like.
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@Ellen – If I was representing a luxury brand, I’d do all I could to have those clothes entering a library-like system (except for the high profile beautiful people who would get other people buying my brand).
After all, the enemy of luxury is availability. The more available something is, especially at a budget price, the less ‘luxury’ it has.
It doesn’t expand the customer base if they don’t end up buying from you.
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I take it all back!!
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Eaon; You obviously missed the biography of Thorsten Veblen. Recommend it to you. Also recommend you look at the cost of using GoGet and AirBnB versus the alternatives. Do you own a squirrel hat?
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Thanks all for the commentary and @Warren yes, i’m aware of the contradiction between some of this POV and the rest of Veblen’s social theory ouvre, if thats what you mean. You’ve lost me on the squirrel hat though.
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@Eaon: I was wrong, it was Coonskin that he wore at enrolled at Cornell. You should get one. I’d like to see you coming.
http://www.furhatworld.com/coo.....p-169.html
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@Warren Thank you. Millinery specifics are so important in these matters. I’ll be wearing an Extra Full Cut 8 piece Touring Cap.
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