A reader emailed me with a connection between the Reagan Era and the New Deal, one I had never considered before. His argument leads to a critical view of “the sharing economy” associated with firms like Airbnb, Taskrabbit, and Uber:
I’ve said … that the post-deregulation American economy resembled strip mining. Just as [Secretary of the Interior under Reagan] James Watt‘s dispensationalist/eschatological worldview led to the idea that we should be maximizing resource extraction from our lands because there would be no need for them after the Rapture, the plutocratic mind saw the Reagan administration as offering an opportunity to finally harvest the bounty that the New Deal state had been nurturing for decades. So, for example, the public trust in fair financial markets could be exploited, just as a seam of coal, by a peddler of junk bonds; the gains would be privatized, and the only thing that would ultimately be lost was the public’s trust in the fairness of the system, which (after all) belonged to no one person.
It’s a “tragedy of the commons” story, really, except in this case the commons was the middle class and the economy that had been created through regulation–of labor relations, of financial markets, of consumer safety, of environmental protections, of food and drug safety, and so on. And, really, that’s what 2008 marked the culmination of–the final extraction of value from the economic system by the plutocrats, at the expense of the system; our economy would shrink, or not grow, but the fortunes of a few people would rise. A law and economics type might point to it as not so different from the worst of the leveraged buyouts of the 80s–a takeover, followed by profit-taking, followed by the deployment of golden parachutes, followed by the deluge.
Which brings me to “the sharing economy”, which promises to use technology to lower transaction costs to usher in a more liquid world in which more people can participate in voluntary transactions that should make everyone better off.