“Uber and other sharing-economy innovations create more productive capital and create more capitalists. Government interventions against Uber and other sharing-economy innovations are, therefore, government interventions aimed not only at protecting the value of existing capital (and established capitalists) from the forces of creative destruction,…

…and such interventions are not only obstacles to market forces that improve consumers’ access to goods and services; in addition, such interventions are assaults against market forces that increase the amount of wealth-producing capital that ordinary people are able to own, control, and profit from.”, Don Boudreaux, The Wall Street Journal, August 3, 2015

Notable & Quotable: Don Boudreaux

How the sharing economy allows ordinary people to turn their consumption goods into capital goods.

An Uber representative registers people on his smartphone during a jobs tour in Queens, N.Y., July 21.

An Uber representative registers people on his smartphone during a jobs tour in Queens, N.Y., July 21. Photo: Reuters

Economist Don Boudreaux writing on his blog, Café Hayek, Aug. 1:

Uber (and other ‘sharing economy’ innovations, such as Airbnb) allow ordinary people to turn their consumption goods into capital goods.

Uber enables someone who would otherwise drive his or her car only for personal use to drive his or her car for paying customers—that is, to drive his or her car in an income-earning (and, hence, wealth-enhancing) manner. Uber enables a consumption good to easily become a capital good for however long the car owner chooses to operate as an Uber driver. For whatever number of hours car owners use their personal cars as Uber (or Lyft) cars, part of value of those cars becomes part of the value of an economy’s capital stock even if formal statistics do not yet register it as such.

Uber and other sharing-economy innovations create more productive capital and create more capitalists. Government interventions against Uber and other sharing-economy innovations are, therefore, government interventions aimed not only at protecting the value of existing capital (and established capitalists) from the forces of creative destruction, and such interventions are not only obstacles to market forces that improve consumers’ access to goods and services; in addition, such interventions are assaults against market forces that increase the amount of wealth-producing capital that ordinary people are able to own, control, and profit from.

Posted on August 3, 2015, in Postings. Bookmark the permalink. Leave a comment.

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