The sharing economy is part of the trend to contractual and temporary work, which masks the real health of the employment markets. It is also part of a global process of reducing overall labor costs.


But perhaps the real issue is that the sharing economy reverses progress in labor markets. Whatever the gains from increased efficiency, it recreates a Dickensian world for a part of the population. Formal employment protects labor from exploitation and deprivation to varying degrees. The sharing economy transfers the risk of economic uncertainty from the employer to the employee with potentially tragic consequences.

We are all for making labor and services markets more fluid. It's hard to argue that "sharing economy" services like Uber are not increasing efficiencies (which does increase wealth, in the most fundamental sense), even though aggregate earnings of the sector affected might fall. After all, that is usually what happens when an existing sector is made more efficient (and exactly what gives rise to luddites).

But the point that the economy is overall sputtering, and that the "sharing economy" isn't making up for it, is very important. We shouldn't point to the Ubers of the world and be satisfied that we have the economy progress we need. Indeed, as we never tire of pointing out around here, we probably won't ever see that progress again until the monetary system is reformed to become a sound one, once again.

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