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How justice and morality seem to work

I’ve listened to a few podcasts and audiobooks recently on justice and morality. They’ve been interesting, and got me thinking about how we justify our actions and interactions. Unfortunately I haven’t been overly convinced by their explanations, so thought I’d write a post on how I am currently thinking it works.

I believe that I am an individual, with preferences that I broadly try to optimise (as does everyone else). These preferences aren’t static, but have evolved throughout history and in my life, unconsciously, and sometimes consciously.

I don’t ignore other people, and their preferences, because:
* I intrinsically like relationships and gain satisfaction from the wellbeing of others
* others can help me achieve better outcomes, say through trade
* others can hurt me if they choose

As a result of this interdependence, it is often in my interest to agree to rules, pacts, etc., within families, communities, nations and globally. That said, it is also often in my short term interest to break those rules, etc, and also often in my interests to seek to enforce rules on others (even if with punishments that appear to hurt everyone).

By saying that I follow my own preferences, I don’t mean to say that I am necessarily what would be considered selfish. It is very common to want to “be lovely” as Adam Smith puts it, to care about those around me, or to follow our God’s will. I know that trying to maximise wealth or hedonistic pleasure won’t lead to a preferable outcome.

I also don’t consider myself to be a moral relativist. While any person’s preferences are valid, not all are equally sustainable, at the individual level or at the societal level. If I prefer to eat as much as I can, or steal from those around me, these are likely to lead to undesirable outcomes. I think I can say there is objective merit in developing sustainable, stable preferences, that fit in with the preferences of those around us.

When I say that I try to optimise according to my preferences, I don’t mean to suggest that I do it perfectly, or that all my actions and decisions reflect preferences. I sometimes fail to correctly recognise the impact of my actions, overweight certain considerations, or accept small harms because it is too much effort to avoid them.

I’d like to contrast this model with Utilitarianism and Libertarianism in turn. Utilitarianism tries to take into account everyone’s preferences at once, and optimise globally. My concern with this is firstly that it is hard enough for one individual to optimise their own preferences, and impossible to do it at a global level. What more likely happens is that some elite’s preferences get forced on everyone, and individual preferences are overridden. In my model, utilitarianism may play a valid role in creating the rules that members of a society sign up to, but I don’t like individuals being forced to sign up.

In a lot of ways, my model sounds a lot like libertarianism, which also has at its heart individual freedom to develop preferences and optimise. Where we differ is how we prevent harm being done to us by others. Libertarianism (as I read it) constructs inalienable rights – for example, the right to autonomy, property and non-aggression. I instead feel that individuals need to negotiate, being prepared to give things up in return for what they want and to ensure others do not hurt them.

I’d also comment that most libertarians seem more individualistic than my preference optimising individual. There’s nothing stopping a traditional libertarian from being more generous and outward focussed if they chose, and possibly, even now, many would be happier if they did. But I’d also suggest that in my model, the need to ensure survival also encourages individuals to be more outward focussed, and more willing to let enforceable rules develop.

Finally and crucially, I’d like to stress that even though this model doesn’t treat human rights and rule of law as absolute, it does give me plenty of reasons to act as if I did.  Not only am I worried about being harmed by others, locked up, or losing respect, but I intrinsically prefer a world where all humans are treated with dignity.

It’s true, in general

On Friday night, I enjoyed a stunning performance of Wagner’s opera ’The Flying Dutchman’. One advantage of it being his shortest opera (only two and a half hours) is that we were out in time to get to the pub for some wonderfully thought provoking conversation. I’m lucky to have friends that enjoy, or at least tolerate deep conversations, and Friday night’s conversation felt especially helpful for me working out what I believe on a few different issues. It is sort of like what I feel when I write a blog post, but obviously so much better when I can have the conversation with friends who inevitably have perspectives and ideas that I haven’t thought about.

One topic that came up was the nature of knowledge, and why there is so much disagreement in the world, even on things that they should be able to agree upon. There are obviously lots of reasons, but I have believe that many of the disagreements I witness could be avoided with better use of the phrase, ‘in general’.

The problem is that the phrase mean multiple different things:

  • in every case (and couldn’t ever not be the case)
  • in every case to date
  • in enough cases that all other cases can be ignored.
  • in most cases, but there are obviously exceptions
  • in most cases recently, but there are obviously exceptions, and there is no reason to be sure that it will be true in most cases in future.

So often one person says “in general, X is a good idea” intending a weaker form, and someone else hears it with a stronger form and disagrees. If people using the phrase could be made to think and be explicit about which sense the mean the term in, I believe we’d get a lot more agreement and more satisfying conversation.

You might think that these are subtle distinctions, and we shouldn’t be too worried about them. Surely it doesn’t make sense to throw away wisdom just because it doesn’t apply to certain cases, or might not hold with the same strength in future?

I strongly disagree. If you’re the exception, being ignored or being forced to conform, causes harm and hurt. And if we act as if something that has in most cases occurred is certain to occur, we’re going to be hurt, or at least miss a positive opportunity.

We don’t have to ignore something that is often true just because there are exceptions, we just need to be careful not to take it more strongly than it deserves to be taken. I recognise that political correctness sometimes goes too far in asserting that something must be ignored if any exceptions exist. But I do think we have a responsibility to make sure that we make very clear the limits of our generalisations. If we know that something isn’t true in every case, we may want to reconsider whether to say it, unless we know how to make clear that we recognise these limitations (it is harder than you think).

Obviously it takes two to have a disagreement. If we hear a generalisation, we can try and avoid being offended (easier said than done, I know) and recognise that the speaker probably meant it in a less extensive form that we’ve interpreted it. If we agree at that level, we can acknowledge the truth at that level, but point out the harm in not recognising the limits of the truth. Or we might still not agree, but then we can at least have a real conversation, both engaging the same statement, rather than both arguing different topics.

Overcoming the market’s failure to reward value

I’ve talked in this blog about the innate human desire to be useful, to be valuable (in a broad sense). That said, most people, myself included, struggle to find the best way to do it.

Most of us recognise that the market system doesn’t do a perfect job of pointing us to the most valuable job. We recognise that the market can easily encourage you to do things that are socially and environmentally destructive. And we recognise that there is a lot of valuable work that is undervalued by the market system.

Unfortunately the other systems for allocating people to jobs tend to be too vague to apply, or too subjective to appeal widely. I don’t like the idea of a government panel that tells people what to do. Being forced to do what your parents did seems unfair. And, to be honest, I’m sceptical about just praying and doing what I feel God is telling me – even if there is a God, I don’t trust myself to listen.

So, I’m not surprised that our market system still dominates out view on what is valuable. We moderate it slightly by scorning those that earn a lot of money at the expense of others, and trying to pay additional respect to those who do valuable but underpaid work. But largely, we send a message that only what the market rewards is valuable, and anything else should sit in a non-work bucket: volunteer work, family duties and leisure time.

I’m not happy with this message, but not sure of the best approach: do we look to improve the market’s ability to respect true value, or do we look to weaken the market’s dominance, and encourage greater respect and priority for work done in non-market settings? Can we do both simultaneously, or do we need to pick one to avoid undermining both?

And on an individual level, until society reaches a healthier situation, how should we ensure we spend our time doing our most valuable work?

Any ideas or suggested reading would be especially welcome.

Why I don’t enjoy politics

With a UK election coming up this March, I’ve been dreading the next few months of media (and social media too).

I decided to write a post on the question of why, despite being very interested in political issues, I find politics so painful. I find listening to most (but not all) people arguing about political opinions a struggle, and have no desire whatsoever to get involved in any party.

I read Jonathan Haidt’s book “The Righteous Mind” last year, and got a lot out of his discussion of tribalism and group loyalty, on their very real evolutionary advantages, and why they are so prevalent. I can see how society has benefited from those who are loyal to our tribe, and I can see how comforting it is to belong to a group.

In contrast, I feel I have a particularly weak instinct for tribal loyalty. I struggle to support any sports team (though I can enjoy watching good playing, whichever side of the field it comes from). I have a pretty limited sense of national identity, let alone national pride. I work for my employer because I enjoy it and they pay me, not because I think they are the only company in the world worthy of my time. And I would even support the disbanding of my religious denomination if I thought it was for the best.

That’s not to say I see the full picture on any issue – I know I suffer from biases. I don’t notice the things I don’t see. I have a tendency not to look for evidence of things that would make me uncomfortable. But I do think I have a greater than normal tendency to see the flaws in the arguments of ‘my side’.

When it comes to politics, there is a lot of complexity, so oversimplification is inevitable. As I discussed in a previous post, I’ve done my best to embrace the complexity, and I accept that people are going to form simplified views of reality.

What I don’t like is that so many people form groups based on whichever simplification they’ve adopted, and show limited willingness to recognise that their views are simplifications. Perhaps if I was more tribally oriented, I’d also behave like this, but I can’t.  I feel like each of the political parties is a simplification, and not one that I can subscribe to and refuse to see the wisdom in the the other simplifications.   I have quite a few politically active friends, so I know it would be wrong to say they don’t want to listen or learn – but that is often how it often comes across when they talk politics.

I’d like to think that politics doesn’t have to be this way. Certainly, political discussions don’t have to be. I enjoy the occasions, when discussing politics, when I get to spend our time listening and learning – exploring the gap between the different oversimplified views, and trying to grapple with what a better view might be, or at least when one view deals with the current situation better. I’m lucky enough to have good friends that are happy to discussing politics in this way – without getting argumentative or antagonistic – I certainly learn more from them than I do from people who just repeat the same soundbites.

I am not optimistic that we’ll ever get to a world where this kind of richer political discourse makes up most of the media coverage. Until it does, I’ll do my best to keep informed and will definitely vote as I feel best, but don’t have to enjoy what I read and hear.

Do we want to eliminate work?

I came across a quote recently, by author Arthur C. Clarke: “The goal of the future is full unemployment, so we can play”. It challenges the essential premise of this blog, the idea that work is something to be celebrated. When someone smart says something at odds with what I believe, it generally pays to think through it – there’s usually a synthesis that is more sensible than either opposing view. So here goes…

In my initial reading, I took the quote to be arguing two things: that work and play are mutually exclusive, and that a good world would be one in which we solely played (and never worked).

It’s hard to say whether work excludes play without a view on what constitutes work, and what constitutes play.

One fairly common view defines work as:

  • things which you are paid to do
  • things which you wouldn’t do if you weren’t paid to
  • things which someone else tells you to do
  • things which bring you no pleasure

On the other hand, I prefer to think of work as anything we do with an expectation of adding value (say to ourselves, to someone else, to a company or to the community).

That first view does seem pretty inconsistent with most definitions of play I can think of.

The second, on the other hand, seems like it could allow play, for example to entertain or to be creative.

I can agree that the first view is negative, but I believe the second kind of work is good. So rather than choosing between getting rid of work, or celebrating it, a better approach would be to find strategies that favour the good kinds of work over the bad kinds. For example:

  • helping people find work that brings them pleasure
  • helping people have autonomy in their work
  • empowering people to add value
  • embracing the part of play and creativity within work
  • breaking the link between income and work

I should point out that in the Arthur C. Clarke quote, he actually refers to ‘employment’ rather than ‘work’. I suppose this could well suggest that he was focussing on the first view of work: being paid by someone to do something not of your choosing. I’d be far more comfortable with a world without this kind of work, as long we replaced it with mechanisms to allow more positive manners of work, and not just play.

working with traders

I’m a big believer in the value and fun of talking and listening to a wide range of people, so I make a point to not just have friendships with people that work in banking/trading. It isn’t surprising, then, that many of the people I talk to have a limited understanding of what banking/trading culture is like.   That’s not a criticism of them – I’ve got a pretty limited sense of what it would be like to work in a hospital or a major manufacturing company.  I so often hear people who think it is like the Wolf of Wall Street – an awful environment which people would only work in for the money, not my experience at all.

That, and the fact that i have a few friends considering a move into banking, made me feel there was some value in writing a post on what I like (and don’t like) about working in a trading environment. I hope it might also be interesting to people who are trying to ensure that other organisations are good places to work.

I’m now in my fourth role working with traders (the only jobs I can compare it to are auditing/consulting) – for a total of 10 years. The roles have been quite varied: analysis and pricing structures for a government treasury’s traders, controlling valuation models for a bank, helping a bank’s commodities traders manage trades, and now helping an energy trading company’s traders use their models and systems to manage their trades. I should stress that none of them have involved me trading – that would terrify me – so I can’t fairly comment on what it would be like to actually trade.

I might as well get the subject of pay out of the way first. I’d caution against believing too much of the media hype about trader salaries and bonuses. Obviously multi-million dollar bonuses make better newspaper headlines than the reality that these sorts of bonuses are very much the exception. That isn’t to say the pay is bad, and I won’t deny it is part of the motivation for being in the field. But it is rare to see people succeed who are solely or even predominantly motivated by the money. I expect that most of my colleagues would stay in their current job even if they could make the same money elsewhere.

In trading there is a very clear metric that defines performance (and pay): daily trading profit and loss. On the whole it is a sensible one for the company and the employee. It is transparent, it is what is ultimately valued by the shareholders, and it feels fair. That’s not to say that any of us believe that making profit is 100% down to skill and effort – we know there’s a lot of luck. But traders know how they’re being measured, so it feels fair.

Being assessed on profit does a very good job of discouraging long unproductive hours of work. If the markets are closed and nothing really needs to be done, people tend to go home – it is generally far more productive to be refreshed for the next day (or enjoy life with family and friends – yes, people in trading organisations are human!).

Traders and the companies that employ them are well aware of the danger of taking too short term a view, and in my experience it is rare that a trader will cheat or destroy a relationship to increase one day’s profit. I reckon there’s still room for improvement in this respect, and times when flawed incentives lead the industry as a whole to get it wrong, but I’d still say the majority of what goes on by traders is in what the company perceives to be in its best long term interest.

For me, the best part of the job is that you’re surrounded by smart, engaged colleagues working together on interesting problems that are directly valuable (in the sense that your employer will make money from them). There is a lot of variety: some problems are technical, some involve lateral thinking or an understanding of how people and markets behave.

I like that we are incentivised to recognise that we don’t know everything. Despite the stereotype, all the traders I’ve worked with knew that they were dependent on others (eg IT, analysts, risk management) to achieve their results. Mistakes and losses are tolerated and expected, lying or refusing to learn from them isn’t.

Most petty politics that I’ve seen in companies seems to stem from insecurity. In trading organisations, most people know that even if their current job disappears there are plenty of other similar employers who they can work for. And, because the organisations are quick to eliminate people they don’t need, those that work there have good reason to feel fairly secure. As a result, I’ve always found our field to have less nasty politics than most other companies and institutions.

Good motivated people are worth a huge amount to managers and the companies. This gives them a very good incentive to treat them well, not just in terms of compensation but also in terms of removing pain points (eg managers that no one wants to work with). I also generally feel that though it isn’t a perfect meritocracy, there’s at least a clear financial incentive to be more meritocratic.

There’s a lot of money at stake on a trading floor, so it can get high pressured. Occasionally you get shouted at (it usually means the trader has made a mistake) but they are generally quick to apologise. And you still get lighter moments of joking and betting on sporting events. That said, the worst behaviours (bordering on bullying) that were once a lot more common, are now pretty rare.

For me, the biggest negative of the field is the feeling you can sometimes get that your work lacks a wider purpose. You can tell yourself that you are creating market liquidity, or that you’re lowering costs, or ensuring efficient allocation of capital – but i don’t need you to tell me that these sound weak. I’m sure most people in the industry have questioned the lack of purpose at some point or other. Some I’m sure regret their path, but maybe feel they couldn’t survive the pay cut or wouldn’t actually be capable of doing a more meaningful job. Others find meaning in other areas of their life – through family, or community organisations, or a startup they are planning on the side – this is something that I’ve been thinking about. And i suspect that plenty learn to deal with the lack of purpose and just enjoy the work.

I can’t promise that I’ll always want to stay in trading – but to date the positives have definitely outweighed the negatives, and led to me to mostly love my time working in this environment.

One word of caution: just because a company employs traders doesn’t guarantee that the positive aspects I’ve mentioned extend throughout the company. Some organisations actively discourage non trading departments from displaying trading culture, and it is often inappropriate for risk managing or controlling functions to have incentives tied to trading performance. That’s definitely something to look out for if you’re looking for a trading culture but taking a job in a non trading area of a trading company.

Thinking in the new year

My latest excuse for not publishing a blog post for a couple of weeks was that I spent the week before last travelling around the UK with friends from Adelaide. Much of my time was spent listening to music in some gorgeous Cathedrals (Edinburgh, Durham, York and Lincoln), but I also managed to enjoy some good conversation in local pubs (with friends – everyone knows you can’t talk to strangers in English pubs!).

Just because I’m not writing a blog post, doesn’t mean I’m not talking about the topics I care about.

I had a discussion with a friend that was staying for a few nights about what schools should focus on teaching. It is easy to criticise the school system for being out of date, designed to produce workers for the bureaucratic empire and factories. But then, as we got on to discussing what would actually make people most productive in the current and future world, I got to appreciating that maybe maximising productive output should no longer be the goal. How could we teach people when to stop working, when to be happy with what we have?

Then, my cousin forwarded me a link to an article in the NY Times which she correctly guessed I’d be interested to read.  The article mainly focussed on people’s need to make themselves busy, something that I’ve been fighting (though not busily) for a couple of years.

The article also included some discussion on careers. There was a comment that I loved: “if your job wasn’t performed by a cat or a boa constrictor in a Richard Scarry book I’m not sure I believe it’s necessary”. And there was a thought provoking quote by Arthur C Clarke: “The goal of the future is full unemployment, so we can play.” To the extent that work is the opposite of play, then he’s right. But to the extent that work is giving, helping, connecting, creating – then I very much hope it remains a big part of our world (and am pretty sure it will). So, we are left with a challenge of how to articulate the future of work, and how to ensure we leave what is good about work while working to eliminate the bad.

In the hope that there’s already a good way of thinking about these questions, I’ve started reading Julia Yates’ book Career Coaching Handbook. No doubt I will write a couple of posts with my thoughts as I get through the book.

The meaning of life

Much of my blogging and thinking in 2013 was focussed on workplace and specific economic issues. These are still important to me, but quite often I struggled to justify answers to questions. I lacked satisfactory answers to some of the bigger questions – I lacked the framework that I needed to tackle the specific questions. For example, why should we even be at work in the first place?

So in 2014 I’ve been doing some deeper thinking about the world and our place and purpose in it. Essentially I’m trying to come up with some rules that are useful, that are specific enough to actually improve my decisions and views on more specific questions (so it can’t just be common sense or things that go without saying). And I want to minimise the risk of my rules leading to bad outcomes or needing fundamental changing (though as always, I reserve the right to change my views if I feel the need).

I know it is scientifically and philosophically fashionable to try and tackle these sorts of questions with a blank slate – without making prior assumptions. I’ve tried that approach before without reaching any conclusions. So this time I thought I’d start from where I already was – and at least try to acknowledge the preconceptions that would influence my conclusions.

Firstly, I didn’t want to reach a conclusion that would be socially isolating. I suppose had I come to some socially unacceptable conclusion with absolute certainty, I would have had to believe it, but where there is doubt, I’d prefer to be in good company.

Next, I didn’t want to reach a view that seemed either irrational or wrong in my heart. I know that human knowledge and instinct is limited, and often flawed. It is often evolutionarily optimised or a product of values that we’ve been taught, rather than anything that is objectively proven to be right. But I don’t think I could live a life, no matter how well reasoned or right it felt, that I couldn’t justify in both my head and my heart.

Finally, my prior beliefs and values have served me pretty well (at least the ones I hadn’t already thrown out!). So I had a preference for conclusions that were consistent with those prior beliefs. For example, with my Christian faith, I’d need pretty good evidence of it being untrue or inherently harmful in order to give it up.

Taking all that into account, I believe I’ve ended up somewhere that I’m happy with. I’m comfortable that the rules I come up with are very much a product of my previously mentioned criteria and what I was looking for, that they aren’t absolute or completely objective.

This doesn’t mean I’m a moral relativist. I do believe some outcomes are better than others. And I do believe there is such thing as ultimate truth (I just don’t fully know what it is, and don’t think there’s much point putting life on hold to try and find it). It does mean that when I’m asking people to do things or saying what I want, it shouldn’t be a moral judgement. And it should be tempered by doubt – I might be wrong about things.

Congratulations if you’ve made it this far. You’re now ready to hear what I currently believe the purpose of life is: to live, to love, and to make the world a better place.  Sorry, they may not be completely remarkable, and yes, plenty of people do live by these ideals every day.   But I also know plenty of times when I and others suffer from prioritising lesser goals above these (for example, status or security), so do genuinely believe they are worth keeping firmly in mind.

Finally, I know that these rules still leave a lot of open questions – it isn’t always obvious what the living, loving and world improving decision is in every specific situation – but at least they gives us a framework to ask those other questions.

Ideology vs forming and reforming beliefs

I haven’t published as many posts as usual over the past couple of months. You’ll be glad to know that it isn’t because I’ve stopped thinking – I have been thinking a lot, and reading, but my thoughts have been all over the place – nothing concrete enough to put down on paper. (And I suppose the fact that I’ve been busy with concerts, plays, work, and Christmas parties, not to mention a holiday, probably hasn’t helped.)

But today I’ve got a post that I want to write!

A couple of months ago, on Facebook, a few of my friends were debating the biggest cause of evil. After the usual suspects of money and religion had been raised, someone suggested ideology as the deeper problem.

Since then, I’ve been wrestling (mentally) with the concept of ideology, and fundamentalism. Words like these are both so historically loaded, that I’m inclined to describe the problem as: following any belief or rule more strictly than we should.

I can understand this temptation: to decide on your rules and beliefs (the clearer and less ambiguous the better), and commit to never wavering from them. This satisfies our very human craving to understand the world, to put things and people in their place. If others around you follow the same beliefs, it is really comforting. This works religion, in politics and economics, and in plenty of other areas in life.

But I don’t believe any of the rules and models of the world that people have come up with so far are the complete, unambiguous picture. And where there are gaps between the our rules and beliefs, and what we should do, we’ll cause harm (and potentially massive harm).

Some people are wary of this, and do their best to live without rules and assumptions. This is really difficult. Firstly, trying to work out what to do in every situation without having rules to go by is very unproductive in the majority of cases. Secondly, our society and communities are built around common understanding and rules. Those that don’t sign up to these have a hard time getting along. Thirdly, I think our brains have evolved to naturally spot patterns and form expectations – it is unnatural and takes significant effort to fight this urge. To often, those that try to live without rules end up being just as rigidly idealistic and judgemental as everyone else (after all – to not have rules is just another rule!).

Thankfully, I think most people know deep down that life is a constant struggle of coming up with beliefs and rules, and adjusting them as we go. We’re not perfect at this. Sometimes we are too slow to spot the patterns, and we miss opportunities to improve our world. Sometimes we are too quick to change our mind, from one fad to another, throwing out beliefs and rules that had real value. And sometimes we cling onto our beliefs and rules too long, and in circumstances that they don’t apply.

I grapple with this struggle in most aspects of my life. My job involves building models and systems to automate the analysis and calculations that commodities traders do, incorporating all sorts of assumptions, many of which we’re liable to one day regret. My social life incorporates all sorts of judgements about what my friends are thinking and feeling, and how best to interact and relate to them. My political views are built on assumptions about human nature: what people want and what they will do in different circumstances. And I spend time trying to understand how I should think about the world and act through the lens of my religious beliefs.

Over time, I’ve come to appreciate a few things about this exercise of forming and reforming beliefs and rules.

I’ve learned to accept my need for rules and beliefs, in order to go about my daily life. They don’t have to be perfect for me to find them useful. And I’m allowed to form them and break them and change them. And if that’s true for me, I have to accept that it is true for everyone else.

Stepping outside your beliefs is difficult. It requires a lot of brain acrobatics to simultaneously hold a belief, and think about the what might be the case if the belief was not true. But it is crucial to do this occasionally, otherwise you’ll be stuck applying your beliefs and rules where they’re harmful.

It helps to come up with a higher goal that you can use when assessing your beliefs and rules (trying to minimise the risk that that goal is flawed). For example, I have a higher goal to live life in a genuinely loving manner (I’m not claiming to always, or even mostly achieve this goal!). That’s pretty vague, hence the need for all my working rules and beliefs. But, if I ever find that following one of my other rules or beliefs conflicts my desire to life life in a loving manner, I know I need to break that other rule.

Most of all, I’ve learned to enjoy the struggle. I’m not going to get it right, and I don’t need to. As long as I try, I’ll be better off than sticking to fixed beliefs and rules and ignoring the harm, and maybe even evil, that it causes.

The Sharing Economy

About a month ago, I was lucky enough to attend the launch of a new report into the sharing economy, “Design for Sharing” by Ann Light and Clodagh Miskelly (which I’ve now read). It was a thought provoking talk and report, and my view of the subject has been broadened, so this blog post is the result – if you’re interested in learning more you can download the report at http://designforsharing.com/about/.

The Sharing Economy is something that I am interested in, and I had listened to quite a few interviews and podcasts on companies like TaskRabbit, airbnb and Uber, which are often described as being exemplars of the sharing economy.

The report calls us to think about activities that are being shared or could be shared, in a broader way than many (including me) had been thinking.  This makes sense to me, and I propose assessing activities through three key questions:

  • Does it improve resource utilisation for the two parties?
    Are the parties, together, better off. For example, if one person doesn’t need to buy a vehicle, or another can sell something, I generally consider that a good thing. I believe that TaskRabbit, AirBnB and Uber all fit into this category, but then so does my job, me buying vegetables from the supermarket, or the vast majority of things that go on in the economy. On the other hand, if I lend you a book that you then feel obliged to read, that may not improve resource utilisation.
  • What is the wider impact (i.e. externalities)?
    When assessing an activity, our natural inclination is to think short term, tangible costs/benefits, and to focus on the main parties, but we do need to consider wider costs and benefits – whether to ourselves in the future or to society and the planet, for example, sharing goods may reduce environmental burden of producing new ones.I generally think I make an effort to keep wider impacts in mind, but I clearly hadn’t done enough as this was the area where I learned the most from the talk and report. Appreciating the ways that relationships and trust and communities can be affected by the type of activities should have been obvious to me, but wasn’t. We also need to keep in mind issues of access and fairness – if we create a marketplace that some people can’t access, that is going to create wider problems in our society.
  • Do both parties benefit?
    Assuming the activity is voluntary (for example, I wouldn’t want to promote theft) I’d look at if both parties intended to be tangibly better off. Market economics would tell us that we’d obviously want this to be the case, but thinking about it, often this forms the distinction between sharing/gifting and renting/selling, and I know some people believe that market transactions are inherently damaging. I’m inclined not to view one approach being better, but can see that it could well affect wider impact.

Now we have those questions, we can think about how best to structure activities to optimise resource allocation and promote positive wider impact. I don’t believe there is a one-size-fits-all approach, and invariably there will be a combination of market-based and not-for-profit approaches.

The report made a particularly valid point that markets look after themselves, and when setting up economics, we are often too quick to jump to a market system. We would do well to consciously remind ourselves of opportunities for sharing/gifting, as these are less likely to happen without conscious effort and drive, or what the authors call ‘Designing for Sharing’.

 
An aside: technology
Sharing has been going on forever, but technology obviously does offer opportunities to identify opportunities for sharing (or other forms of resource optimisation), or for reducing risk. While these can enable more sharing to occur, this can reduce the wider benefit. For example, by anonymising sharing and removing the need for trust to be developed, you are likely to reduce the relationship/community development benefits.