Michael MungerJun 15, 2022
The Sharing Economy
Its Pitfalls and Promises
Institute of Economic Affairs 2021
Transactions have always taken place. For hundreds of years that 'place' was a market or, more recently, a shopping mall. But in the past two decades these physical locations have increasingly been replaced by their virtual counterparts - online platforms. In this book Michael Munger explains how these platforms act as matchmakers or middlemen, a role traders have adopted since the very first exchanges thousands of years ago. The difference today is that the matchmakers often play no direct part in buying or selling anything - they just help buyers and sellers find each other. Their major contribution has been to reduce the costs of organizing and completing purchases, rentals or exchanges. The Sharing Economy: Its Pitfalls and Promises (Institute of Economic Affairs, 2021) contends that the key role of online platforms is to create reductions in transaction costs and it highlights the importance of three 'Ts' - triangulation, transfer and trust - in bringing down those costs.
Professor Munger trained as an economist at Washington University in St. Louis under Nobel Prize-winning economic historian Douglass North. He has published prolifically across disciplines in the areas of political economy and public choice, and is now a professor of political science at Duke University, with secondary appointments in economics and public policy.
Professor Munger is also an avowed libertarian, and has stood for office as a candidate of the Libertarian Party. In our interview, he explains how the emergence of the platform economy creates concentrations of economic power that are just as concerning to him as concentrations of political power. He also explains how thinking through the many changes and disruptions in our working lives that will result from the platform economy has led him to the view that Universal Basic Income and single-payer healthcare are necessary to creating the kind of free and prosperous society that he and other libertarians want.
Host Peter Lorentzen is an Associate Professor in the Department of Economics at the University of San Francisco, where he leads a new Master's program in Applied Economics that trains students in the skills of data analytics needed to understand, succeed in, or make positive changes to the evolving digital platform economy.