Forbes discusses what policy makers should keep in mind about the sharing economy with Iain Murray.
Iain Murray, Competitive Enterprise Institute:
“The world is on the verge of a consumer-driven entrepreneurial revolution that could provide as many relative benefits as the industrial revolution did in the 19th century. I call it a consumer-driven entrepreneurial revolution because the central features of this new economy are meeting unserved consumer demand with underused capital, and providing consumer protection in forms of feedback mechanisms and secure payment mechanisms.
These start-ups are able to meet this consumer demand because there has been an across-the-board lowering of market transaction costs. As Nobel laureate economist Ronald Coase noted in the 1930s, corporations arose because market transaction costs are high. Now that these costs are lower, new markets are made available to put consumers and suppliers in touch with one another.”
Read the full article at Forbes.