“As mechanisms to establish private trust become more efficient, government plays a smaller role,” Says David Brooks. By George, He Gets the Sharing Economy.

David Brooks, he of New York Times
establishment thinking fame, takes a moment today
to marvel at the success of the sharing economy as people and
companies build networks of trust and commerce using modern
tools.

I’m one of those people who thought Airbnb would never work. I
thought people would never rent out space in their homes to near
strangers. But I was clearly wrong. Eleven million travelers have
stayed in Airbnb destinations, according to data shared by the
company. Roughly 550,000 homes are now being shared by hosts.
Airbnb is more popular in Europe than it is even in the United
States. Paris is the largest destination city.

And Airbnb is only a piece of the peer-to-peer economy. People
are renting out their cars to people they don’t know, dropping off
their pets with people they don’t know, renting power tools to
people they don’t know.

He noodles a bit about the effects of middle-class stagnation,
and the innovative power set in motion now that “millions of people
have finished college with a hunger for travel and local contact,
but without much money.”

Eventually, even though he doesn’t use the term, he comes back
to spontaneous
order, with people using the tools available to them within the
culture in which they live to create new structures and
connections.

And the big thing I underestimated was the transformation of
social trust. In primitive economies, people traded mostly with
members of their village and community. Trust was face to face.
Then, in the mass economy we’ve been used to, people bought from
large and stable corporate brands, whose behavior was made more
reliable by government regulation.

But now there is a new trust calculus, powered by both social
and economic forces. …

Companies like Airbnb establish trust through ratings
mechanisms. Their clients are already adept at evaluating each
other on the basis of each other’s Facebook pages. People in the
Airbnb economy don’t have the option of trusting each other on the
basis of institutional affiliations, so they do it on the basis of
online signaling and peer evaluations. Online ratings follow you
everywhere, so people have an incentive to act in ways that will
buff their online reputation.

Well, yes. People make new and interesting connections as the
world around them evolves. These connections aren’t centrally
planned or enforced from above—they evolve to meet people’s needs
(and fade away if they don’t).

Brooks notes that many of the new sharing economy companies are
making their peace with city governments and other local
authorities. But, so far, this has largely involved a hands-off
policy by officials who don’t know what to make of the
development.

most city governments don’t seem inclined to demand tight
regulations and oversight. Centralized agencies don’t know what to
make of decentralized trust networks. …

As mechanisms to establish private trust become more efficient,
government plays a smaller role.

Fancy that. Actually, Scottish philosopher Adam Ferguson did

fancy that, in 1767.

Men, in general, are sufficiently disposed to occupy themselves
in forming projects and schemes: But he who would scheme and
project for others, will find an opponent in every person who is
disposed to scheme for himself. Like the winds that come we know
not whence, and blow whithersoever they list, the forms of society
are derived from an obscure and distant origin; they arise, long
before the date of philosophy, from the instincts, not from the
speculations of men. The crowd of mankind, are directed in their
establishments and measures, by the circumstances in which they are
placed; and seldom are turned from their way, to follow the plan of
any single projector.

Last month,
Jim Epstein suggested that the “sharing economy” gave liberals
cover to do what people have always done: organize their affairs
without the dead hand of the state.