The Sharing Economy

Natural order seems to dictate that complexity emerges from simplicity. In nature, this is known as Emergence. In nature, organisms must compete for scarce resources in order to survive. Organisms that develop new and unique advantages more rapidly than their competition are able to secure more of the scarce resources available. In order to survive, competing organisms must adapt or accept extinction. As the evolutionary process rolls on organisms are continually developing new and unique advantages (NOVA scienceNOW: 34 - Emergence). With time, simple organisms emerge. As organisms develop new and unique advantages, their competition must adapt or face extinction. Thus, creating complexity from simplicity. This is natural order, in ecosystems and economics. The sharing economy - Airbnb and Uber in particular - exemplify and animate this concept of natural emergence.

As early as 1943, economist Joseph A. Schumpeter recognized capitalism’s fundamental impulse of incessantly revolutionize, and destroy existing structures. However, as Schumpeter points out in his book Capitalism, Socialism, and Democracy, we must also recognize Capitalism’s fundamental impulse of incessant creation. As Schumpeter states “the fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates” (Schumpeter, 1950 p.83) . To illustrate this principal, one need look no further than the disruptive affect the sharing economy - Airbnb and Uber in particular - has had on their respective industries by targeting segments their incumbents overlooked, and delivering greater functionality. Most often, at a lower cost than their incumbents. This allows them to move upmarket, pushing their incumbents out of the market, or forcing them to evolve. This fundamental impulse of capitalism to both create and destroy is what...