“Nobody wants zero regulation, and every company should follow the law. But policy should begin with admiration for new ways that citizens can build their lives, not with hostility to profits or the impulse to protect entrenched industries…

…Governments have their own golden opportunity to exercise creativity in service of the common good, whether that entails rethinking anachronistic zoning laws or adjusting tax policies that treat someone’s spare bedroom the same as a Marriott suite.”, Arthur C. Brooks, “Start Helping the Helpers”, New York Times

The Opinion Pages | Contributing Op-Ed Writer

Start Helping the Helpers

Arthur C. Brooks

WHAT is a “helping industry”?

This question has brought me to a former battery factory in downtown San Francisco. I’m sitting in what must have been some tycoon’s corner office. Four overstuffed chairs are surrounded by a full complement of hipster eclectica, from art books to lava lamps.

My hosts are not squatters. They are Nathan Blecharczyk, a 30-something co-founder of Airbnb, and several of his fellow executives. Airbnb is the start-up Internet marketplace that matches visitors to cities around the world with people who have space to rent in their homes. In just six years, the business has exploded: It is currently valued at roughly $10 billion and employs more than 800 people.

What made these people start Airbnb? For a sure way to make a boatload of money? Not likely. According to Scott Shane, an entrepreneurship scholar at Case Western Reserve University, about a quarter of new businesses typically fail in their first year, and fewer than half are still standing after five years. A smart guy like Nate could find a career with much better odds of financial success.

Indeed, a few minutes with him dispels any delusion that money is all he cares about. To hear him tell it, he started the business because it was fascinating and fun. And most of all, he says, because it could help ordinary people who needed an affordable place to stay or had some excess capacity in their homes. That’s right — Nate sees Airbnb as a “helping industry.”

Some will howl at this, because we tend to define helping industries as things like government, charities and health care.

But are those the only ways — or even the best ways — to help struggling Americans? Government and charities play an important role, especially in the wake of the 2008 financial crisis and our subsequent nonrecovery. But let’s use a bit more imagination, and turn our attention back to Airbnb.

Consider Kimberly Kaye, a disabled 30-year-old New Yorker who says she has been able to stay in her home only because of Airbnb. In Ms. Kaye’s own words, “for a few days each month, we vacate our one-bedroom apartment, bunk with a friend or family member and rent out our place.” She reports that her earnings from the service are “modest,” but they help her pay the bills and stay connected to the outside world. “It’s the difference between keeping our chins above water and drowning.”

Technically, Airbnb — like Uber, Lyft and other innovative companies — is helping people like Kimberly Kaye by tackling the problem of “dead capital.” This term, coined by the Peruvian economist Hernando de Soto, refers to potentially productive assets owned by ordinary people who could use them if they could only find a way. As Daniel M. Rothschild of the Mercatus Center points out, there are 1.5 bedrooms for every man, woman and child in the United States. The owners or renters of many of these dormant bedrooms could use extra money in a lousy economy.

Ordinary people, especially vulnerable people without power and privilege, find Airbnb empowering and useful. It lifts Americans up with zero cost to the taxpayer. And people like it. Shouldn’t we encourage this?

Instead, state and local governments have met the service with antagonism, seeking to limit Airbnb’s operations or shut it down. Just this week, the attorney general of New York issued a new report insisting that a majority of Airbnb’s operations in New York City are illegal, and says it is planning a major regulatory crackdown. Uber, Lyft and similar services that enliven dead capital have met with similar treatment from government officials.

Nobody wants zero regulation, and every company should follow the law. But policy should begin with admiration for new ways that citizens can build their lives, not with hostility to profits or the impulse to protect entrenched industries. Governments have their own golden opportunity to exercise creativity in service of the common good, whether that entails rethinking anachronistic zoning laws or adjusting tax policies that treat someone’s spare bedroom the same as a Marriott suite.

Any of us can work in a helping industry. That includes teachers, nurses, stay-at-home parents, entrepreneurs who want to empower ordinary people, and government officials who welcome novel industries as opportunities to evolve instead of nuisances to be squashed.

The blessing of our free enterprise system is that any of us can sanctify our work. We just need to ask if what we are doing truly lifts others up.

Arthur C. Brooks, a contributing opinion writer, is president of the American Enterprise Institute.

Posted on October 20, 2014, in Postings. Bookmark the permalink. Leave a comment.

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