Well of course he didn’t actually write about the sharing economy. But one of the essays in a new collection about Coase’s legacy – edited by Cento Veljanovski – offers a Coaseian perspective on the phenomenon. Its author, Michael Munger, argues that the sharing economy platforms are enabling reductions in the transactions costs involved in exchanges that were always in principle possible. The three key transactions costs are: information about prices, characteristics, options; assuring safety and quality to creat enough trust for the transaction to occur; and process the transaction agreement and payment in a reliable and speedy manner.
[amazon_image id=”0255367104″ link=”true” target=”_blank” size=”medium” ]Forever Contemporary: The Economics of Ronald Coase (Readings in Political Economy)[/amazon_image]
The essay also notes, in a point that was bound to appeal to me, that there could be “a potentially dramatic reduction in the amount of new stuff that we need to manufacture,” be it shared drills or cars. Munger ends, “The firm of the future may operate primarily as a software platform rather than as a physical location.” While I certainly don’t think all firms will take this shape, it doesn’t seem a mad idea.
I haven’t yet read the other essays but it looks like a nice volume for all Coase fans – and aren’t we all? The pdf of the book can be downloaded here.