How Progressive Cities Fight Innovation
By Jared Meyer
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About this ebook
These fights go far beyond the sharing economy. To promote the benefits of new technology, it is time for states to step up and overrule cities when local policies threaten innovation. If cities are going to remain a driving force for economic progress, then states need to save so-called progressive cities from themselves.
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How Progressive Cities Fight Innovation - Jared Meyer
ENCOUNTER BROADSIDES
Inaugurated in the fall of 2009, Encounter Broadsides are a series of timely pamphlets and e-books from Encounter Books. Uniting an 18th century sense of public urgency and rhetorical wit (think The Federalist Papers, Common Sense) with 21st century technology and channels of distribution, Encounter Broadsides offer indispensable ammunition for intelligent debate on the critical issues of our time. Written with passion by some of our most authoritative authors, Encounter Broadsides make the case for ordered liberty and the institutions of democratic capitalism at a time when they are under siege from the resurgence of collectivist sentiment. Read them in a sitting and come away knowing the best we can hope for and the worst we must fear.
Table of Contents
Cover
The Twenty-First Century Economy
Some Cities Can’t Handle Innovation
The Rent Is Too Damn High
A Tech Capital without Uber
Unions Can’t Stand the Sharing Economy
The Politics of the Sharing Economy
Copyright
FOR GOOD REASON , millions of people who have taken an Uber, shopped on Etsy, found a professional’s help on Thumbtack, or booked a place to stay through Airbnb love the sharing economy. These services, and countless others like eBay, TaskRabbit, Rent the Runway, and GoFundMe have a common theme—they connect people though online platforms. Often, the sharing economy enables transactions that used to be infeasible, time consuming, or cost prohibitive.
Others see the sharing economy as an enemy to be eliminated. It is true that the work done in the sharing economy does not look much like that of 1950s-era taxi drivers, artisans, repairmen, or hotel managers, but a twenty-first century economy cannot flourish under a decades-old policy framework. As technology continues to disrupt established business models, fights between innovators and special interests will only intensify.
Opponents of the sharing economy do not want to promote innovation; they want to protect themselves from change and competition. And political opponents refuse to understand that the fundamentally different businesses of the new economy require a modern regulatory model to thrive and fulfill their potentials. Instead of embracing these advances, these groups resist any change that threatens their short-term economic interests.
To fight back, it is critical to illuminate the new economy’s benefits and reveal the motives and tactics of those who desperately want to kill it. Change is central to economic growth, and Americans should not remain quiet while policy makers limit innovation to protect the politically powerful.
THE TWENTY-FIRST CENTURY ECONOMY
Before highlighting political opposition to the sharing economy, it is important to understand the recent economic developments that are behind the business models of companies like Uber and Airbnb.
Underpinning these changes is the economic concept of transaction costs.
Nobel Prize–winning economist Ronald Coase explains that transaction costs are what it takes to bring together buyers and sellers, exchange information, negotiate prices, and enforce contracts.
In the past, transactions were heavily influenced by businesses. But all that has changed in today’s economy because technology has put information in the hands of consumers.
As the Competitive Enterprise Institute’s Iain Murray argues, the sharing economy is made possible by the