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Book Reviews Finance & Development, June 2016, Vol. 53, No. 2

Yours and Mine Arun Sundararajan

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism

MIT Press, Cambridge, Massachusetts, 2016, 256 pp., $26.95 (cloth).

The sharing economy is transforming commerce right before our eyes. Thousands are skipping the hassle of standing on a corner in the rain to hail a cab and are simply summoning an Uber or Lyft to whisk them to the airport. Others are selling their knitting on Etsy, letting strangers stay in their home through Airbnb, or having their weeds pulled by a gardener hired via TaskRabbit. Countless “workers” are flocking to Amazon’s Mechanical Turk to complete “Human Intelligence Tasks” for just pennies.­

Sharing economy expert and New York University Stern School of Business professor Arun Sundararajan tackles the myriad issues these developments have spawned in his path-breaking book.­

Sundararajan knows his stuff. He’s an award-winning scholar who writes with a clarity that masks the complexity of his subject. Citing his own research and that of many others, he explains how organizations whose main purpose is to create the supply needed to meet consumer demand are driving today’s economy. He explores how these developments spell the end of employment as we know it and what society should do to shield the American worker from the worst Darwinian aspects of crowd-based capitalism.­

Sundararajan divides the book into two logical parts, cause and effect, with each of eight main chapters addressing a concrete topic. If you’re befuddled by the notion of blockchain technology and bitcoin or wonder exactly how a “platform” differs from a “hierarchy,” you’ll find the answers in this enormously helpful and comprehensive book.­

Sundararajan identifies five core characteristics of the sharing economy. It’s largely market based, puts underutilized capital to use, relies on crowd-based networks, and blurs the lines not just between the personal and the professional, but also between employment and casual work.­

What generated this crowd-based capitalism? Apple’s Steve Jobs and the iPod, says Sundararajan. The iPod was the first successful mass-market product developed primarily for consumers, rather than for business or government, and ever since, the most important innovations—think the iPhone, iPad, and Facebook—have centered on the consumer.­

Trust is essential to this economy. Our 20th century relatives would have...

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