Wed May 14, 2014, 09:58 AM

All Hail the "Sharing Economy!" A Mushy Phrase Gives Liberals Cover to Join the Fight Against Big Go

All Hail the "Sharing Economy!" A Mushy Phrase Gives Liberals Cover to Join the Fight Against Big Government

"This is a new economy, the sharing economy," declared Airbnb CEO Brian Chesky last November at an event for some the company's avid hosts, who routinely rent out their spare bedrooms and apartments for short-term stays through the company's website. "There are laws for people and laws for business, but you are a new category—people as businesses," he told the crowd. "It's actually starting to feel like a revolution."

Airbnb's explosive growth has spawned fierce political battles in cities around the world over whether the government should ban or curtail these homegrown hotels, which are providing travelers with an alternative to traditional lodging. And Airbnb is just one of many new online marketplaces that are undermining bad government policies and provoking a backlash from regulators. So-called ridesharing companies, like Uber, Sidecar, and Lyft, which connect car service drivers and passengers through mobile apps, are dismantling cab cartels by making government-permitting regimes irrelevant. Equity crowd funding (i.e., Kickstarter with stock rewards) is poised to partially negate New-Deal Era financial regulations by allowing anyone with a bank account and an Internet connection to stake venture capital. EatWith, a website that allows diners to book paid meals in private homes, leaves food service regulators baffled over whether to crack down or look the other way.

In these brewing public policy battles, many advocates for limiting the role of government don't talk like libertarians. They refer to these new online marketplaces as "the sharing economy," a phrase that's clever branding but too broad to be very meaningful. They argue that these companies represent a new paradigm for American capitalism in which trade (at last!) benefits individuals instead of multinational corporations. The higher purpose of these sharing economy ventures, they assert, isn't making people freer, richer, and happier as customers, workers, and entrepreneurs, but reducing energy consumption and staving off the Malthusian apocalypse.

Sharing economy defenders may be on shaky ground intellectually, but their effort to rebrand capitalism is winning converts and swaying regulators. If mushy phrases and misguided ideas provide cover for, say, Occupy Wall Street protestors to turn up at a demonstration to save Airbnb, libertarians should rejoice.

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