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The Socialisation of Economics through the growth of the Sharing Economy – Blog post 1

Both Sociology and Economics though separate disciplines were born out of the enlightenment, and though distinct they overlap with each other. The sharing economy, as we know it today developed as the world wide web grew and the recession hit causing less of us own. Owners also wanted to maximize their resources by sharing them rather than simply leaving them unused and wasted. This is disrupting norms on how we interact with each other as well as disrupting traditional economics. This ‘sharing economy’ emerged and was popularized in Silicon Valley, a global technology innovation hub. There companies like AirbnB and Uber, 2 of the most popular online platforms were created but it has taken off not only in San Francisco but around the world. What is the sharing economy? It goes by many names which include “peer economy,” “collaborative economy,” and “collaborative consumption. The sharing economy refers to the use of digital platforms which allow customers to access rather than own products and services, and it requires deeper social interaction than traditional economics to be successful.

Today it isn’t just traditional and more modernised business that is taking it seriously as they seek to compete but governments too as they struggle with supply and demand, for a growing population and try to innovate and adapt to a technology oriented world. Price Waterhouse Cooper claims that the growth of 5 industries in the sharing economy can potentially increase global revenues “from around $15 billion now to around $335 billion by 2025” and the UK just commissioned a study to learn more about how they can tap into an industry it is estimated they can gain 9 billion pounds from by 2025.

Economics is continually trying to approve and disprove theory and predictive analysis is important to it. “Milton Friedman (1953) tells economists that good theories are those that provide correct and useful predictions, while Paul Samuelson (1947, 1963) tells economists to formulate theories with “operational” concepts that are, ideally, logically equivalent to their descriptive consequences”.  (Hausman D 115) However though often unacknowledged it is the process of formulating and investigating economic models that should also be understood. Simply confirmation or falsification a theory is not always most useful and the same could be said in trying to understand the sharing economy. It follows that sociological analysis can be vital in understanding economics and the many questions it seeks answers to. Given the web is not only a technical but social construct in understanding the economics of the sharing economy it is essential that its social dimension is not studied in isolation.

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