An Economy of Trust

Eat With ; Hummus Brunch with Naama Shefi & Noam Bonnie ; Photo By: Eilon Paz

In a few previous posts I explored the dynamic of new commercial enterprises like Uber (read Uber Libertarians in American Thinker)  that defied the ability of the regulatory state to deal with the rapid development of very large commercial communities. More on that from The Freeman, Fifty More Ways to Leave Leviathan. (tips to Carpe Diem)

a few excerpts:

7. Put that car to use with Getaround. You have to get somewhere, but it is not always easy because government transit systems are so terrible. Now there is a way to share your car with others and make money at the same time. This app, one of many such services, allows you to rent a nearby car for the day, putting idle resources to work without crazy government mandates for carpooling and public transport. It’s the market at work fixing yet another big problem.

8. Your house becomes a restaurant with EatWith. Why should the regulators say what is and what isn’t a restaurant? If you have a kitchen or an appetite, there are others who might want to make an exchange with you. Such services are busy every day busting up the eating cartels. They are also helping to bring back the dinner party.

10. Monitor overlords with copblocking. It’s become a thing now that the police are filmed by regular citizens all across the United States and the world. Ten years ago, filming a cop might have gotten you arrested. Today, there is nothing they can do about it, since everyone carries a video maker in her pocket. Filming is not a perfect solution, but it sure makes the cops more accountable. Livestreaming means that the video is still out there even if your phone is confiscated or smashed. Copblocking has become a way of life.

11. Try mobile health care. Time was when health care came to you. As the industry became more cartelized and expensive, the industry dictated the terms and you had to go to them. But regulations have pushed matters so far that the system is breaking down, and many providers are seceding toward a consumer-driven model. Even companies like Uber are looking into putting doctors and nurses on wheels. Such services will only be for the well-to-do — for now. But just as mobile phones got better, faster, and cheaper, so will health care delivery. Mobile health care startups are already attracting a lot of venture capital. First up: Uber for hangovers. (Note: Uber Logistics is coming soon.)


Most of these are small apps that pose little threat to the Leviathan, but the ability of Uber, Airbnb, Amazon, Facebook, Twitter and others to scale up remarkably fast and create huge commercial communities build strong constituencies that challenge the entrenched communities that profit from the regulatory state.  But these apps are important that they increase suppliers and empower consumers.  It is also worth noting that these apps assume and encourage a stronger community in their dependence on human trust. Regulatory structures that claim to protect consumers often end up just protecting entrenched interests.  This need to protect is contrary to the principles of trust that the new enterprises assume.

With Uber, Airbnb and Eatwith anyone with a decent car and home with a kitchen and an extra bedroom could tap multiple streams of income.  This new economy of trust could engender a new generation of eentrepreneurs

The Modern Source of Abusive Power


From The National Review George Will writes Government for the Strongest and Richest

Intellectually undemanding progressives, excited by the likes of Senator Elizabeth Warren (D., Mass.) — advocate of the downtrodden and the Export-Import Bank — have at last noticed something obvious: Big government, which has become gargantuan in response to progressives’ promptings, serves the strong. It is responsive to factions sufficiently sophisticated and moneyed to understand and manipulate its complexity.

Hence Democrats, the principal creators of this complexity, receive more than 70 percent of lawyers’ political contributions. Yet progressives, refusing to see this defect — big government captured by big interests — as systemic, want to make government an ever-more-muscular engine of regulation and redistribution. Were progressives serious about what used to preoccupy America’s Left — entrenched elites, crony capitalism, and other impediments to upward mobility — they would study The New Class Conflict, by Joel Kotkin, a lifelong Democrat.

In the 1880s, Kotkin says, Cornelius Vanderbilt’s railroad revenues were larger than the federal government’s revenues. That was the old economy. This is the new: In 2013, the combined ad revenues of all American newspapers were smaller than Google’s; so were magazines’ revenues. In 2013, Google’s market capitalization was six times GM’s, but Google had one-fifth as many employees. The fortunes of those Kotkin calls “the new Oligarchs” are based “primarily on the sale of essentially ephemeral goods: media, advertising and entertainment.”

He calls another ascendant group the Clerisy, which is based in academia (where there are now many more administrators and staffers than full-time instructors), media, the nonprofit sector, and, especially, government: Since 1945, government employment has grown more than twice as fast as America’s population. The Founders worried about government being captured by factions; they did not foresee government becoming society’s most rapacious and overbearing faction.

The Clerisy is, Kotkin says, increasingly uniform in its views, and its power stems from “persuading, instructing and regulating the rest of society.” The Clerisy supplies the administrators of progressivism’s administrative state, the regulators of the majority that needs to be benevolently regulated toward progress.


The progressive shift aiming to empower the average man also sought to empower  the elites and technocrats who felt the common man could not properly understand the needs of a modern society. The power required to run the progressive state was not insulated from the human seduction of power in the private sector, but it was insulated from the accountability.  Given the large changes in commercial enterprises such as Amazon, Apple and Uber, consumers and suppliers have created communities that defy the progressive regulatory state.  The state of modern commerce changes too fast to regulate effectively. Systems such as Uber’s ride rating regulates service far better than Rube Goldberg regulations.

The progressive state now betrays its original ideals and has become the source of abusive power rather than its nemesis.

A Lack Of Imagination

Uber A

From Today’s American Thinker, my article Uber Libertarians


There are similar commercial communities among iPhone users, Amazon customers, and other enterprises.  Such modern businesses scale up remarkably fast, creating huge commercial communities, quickly threatening the regulatory agencies, and empowering a new generation of Uber Libertarians.  These new commercial communities give a face to the principles of a free market, bringing life to ideas that have long remained buried in books and think-tanks or held in contempt by thick progressive elites self-imbued with moral supremacy.

When Fred Smith, founder of FedEx, presented his idea for next-day shipping, it was greeted with substantial skepticism.  But a free market and a growing economy are always greeted with such surprises.  The problem with modern regulation is that it can never keep up with a changing market, and the rate of technical development moves far too fast to regulate.  We are shortsighted to focus on the competence of government, such as the miserable failures of the ACA website.  The critical flaw in central control of the economy and regulations is not the lack of competence, but the lack of imagination.

This is becoming unavoidably clear to a new generation of Uber Libertarians.
Read more: http://www.americanthinker.com/articles/2014/12/uber_libertarians.html#ixzz3Khga717x
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the readers’ comments are worth the time.

Rolex and Timex


Kevin Williamson writes in National Review, Who Boycotts Walmart


It is easy to scoff, but I am ready to start taking the social-justice warriors’ insipid rhetoric seriously — as soon as two things happen: First, I want to hear from the Wal-Mart-protesting riffraff a definition of “justice” that is something that does not boil down to “I Get What I Want, Irrespective of Other Concerns.”

Second, I want to turn on the radio and hear Jay-Z boasting about his new Timex.

It is remarkable that Wal-Mart, a company that makes a modest profit margin (typically between 3 percent and 3.5 percent) selling ordinary people ordinary goods at low prices, is the great hate totem for the well-heeled Left, whose best-known celebrity spokesclowns would not be caught so much as downwind from a Supercenter, while at the same time, nobody is out with placards and illiterate slogans and generally risible moral posturing in front of boutiques dealing in Rolex, Prada, Hermès, et al. It’s almost as if there is a motive at work here other than that which is stated by our big-box-bashing friends on the left and their A-list human bullhorns.

If economic “exploitation” means making “obscene profits” — an empty cliché if ever there were one — then Wal-Mart and the oil companies ought to be the good guys; not only do they have relatively low profit margins, but they also support millions of union workers and retirees through stock profits and the payment of dividends into pension funds. By way of comparison, consider that Hermès, the luxury-goods label that is a favorite of well-heeled social-justice warriors of all sorts, makes a profit margin that is typically seven or eight times what Wal-Mart makes, even though, as rapper Lloyd Banks discovered, its $1,300 sneakers may not always be up to the task. If Wal-Mart is the epitome of evil for selling you a Timex at a 3 percent markup, then shouldn’t Rolex be extra-super evil?