Celestia Randolph, Staff Writer
Duke University professor Michael Munger spoke to Wingate students about the likeliness of a near future wherein people enjoyed a “Sharing” and “Middle-Man” economy. The answer to his every question at the Tomorrow 3.0 lecture last Thursday evening was “transactions cost”.
A middleman economy, Munger explained, is “a system in which entrepreneurs sold reductions in transaction cost”. An example of such an exchange might be a situation in which a person, intending to
transfer an item to a buyer, is deterred by the cost of shipping, packaging, etc., but with the presence of a middleman to reduce the cost of the transfer, the exchange is and profitable for all three people involved.
The second marketing style, a sharing economy, involves selling “access to a product or service desired by consumers to an excess capacity.” Our generation is already familiar with this concept. Munger explained that business such as Uber are introducing this concept to Europeans and now, to American millennials.
Such businesses maximize the public’s access to reusable services, lessening the need for individual modes of the same thing. This allows groups of consumers desiring the same service to rent or enjoy temporary access to what they need. Rather than spend money on storage for items or things they do not constantly require, people will profit from sharing or renting the same product to others.
However, people of the current and previous generations are not as keen on embracing such ideas. Why? In any transference system, there are three pivotal factors to consider, Munger explained. Triangulation, transfer, and honesty.
Triangulation refers to the terms of consumer and provider identity, location and price conditions community. The means of transfer and the honesty of both parties are also crucial to any sales or exchange. Therefore, a system involving constant dealings with strangers seems a bit overwhelming.
In such a communal society, the ideal mode of transferring goods would be exchange. Giving or simply selling products leaves one party with less than the other, but an exchange mutually benefits both parties.
In that way there is no change in the total wealth of either trading partner and each gets what he prefers out of the deal. In such a unified society, it is clear that although there may be some drastic changes, people will become much more conscious of each other, as well as the importance of interpersonal communications and adapting to cultural progressivism.
Photo courtesy of econ.duke.edu
Edited by: Brea Childs