Rethinking ownership

Our economic system is founded on the concept of ownership. Buying stuff, selling it, that’s the baseline model. Property is protected by law, theft is punished severely. Most importantly, how much or how little you posses is key to your social status. So ownership is a central aspect of our society, and it’s woven deeply into our daily lives. But that doesn’t mean that this concept is immutable, that it could escape change. I’m thinking of three developments that could gradually transform the role of ownership.

Sharing economy

The idea is quite simple. You lend some of your stuff to others to use it, and you borrow from them what you need. All for limited periods of time, within an agreed framework such as your neighbourhood, sharing networks, or co-operations. You could think of Airbnb as a prominent business example built on this concept. As a result, you have access to things you need when you need them, but you don’t have to pay the full price of actually owning them. And that’s particularly interesting for expensive goods you’ll rarely use. Overall, everybody owns only that which he or she considers really essential, but has a reliable way to obtain everything else that is needed.

The sharing economy clearly reduces the number of goods any individual would own. As a result, production per capita, and raw material use per capita would drop, making this approach more sustainable than current economic practices. On the other hand, the sharing economy creates interdependencies between owners and users, resulting in considerable coordination needs to figure out who uses what when for how long.

Makers movement

The concept of producing what you need when you need it where you need it is of course compelling. And even if you strip off the hype of 3D printing and look at the art of the possible (the types of goods, the available materials), there’s still enough credible promise. This concept has the potential to shift the focus of ownership: rather than owning individual goods, you’d posses the means to produce these goods at will.

Like the sharing economy, the makers movement opens a path to gain reliable access to things you need but don’t posses. However, unlike the sharing economy, the makers movement gives you the means to create what you need. Here, the focus is clearly on independence: being independent of industrial scale production, and being independent of other customers. While widespread making could certainly reduce centralised production, it doesn’t automatically reduce production per capita or raw material use per capita. On the contrary, the makers movement could potentially increase the use of raw material and energy, if we replace industrial efficiency with producer-consumer trial and error. This could eventually turn out even less sustainable than today’s industrial production schemes.

Circular economy

This is the idea that could have the most significant impact on our understanding of ownership. Today, you have absolutist power over any product you posses. Following a simple linear logic, after production and purchase, you are in full control up to the point of disposal. That’s when you give it away and hand it back to the commons, which usually means that it ends up in a landfill, and with it all the material resources that were used to manufacture it.

In the future, following the logic of the circular economy, you are the temporary custodian or steward of the material resources embodied in that product, and as such, you are authorised to draw utility from it. But in exchange for that temporary authority, you are responsible to ensure the return of these resources, to hand them back into the circular economy. It’s then your general responsibility to maximise re-use and re-cycling, and to minimise waste.

The circular economy could dramatically shift the focus of ownership towards a strong sense of responsibility for the material and energy invested in the production of our daily goods. Entering into a cyclical mindset that understands manufactured goods is an incarnation of raw material, which can be re-shaped and re-used to serve other purposes, is an essential step towards a sustainable economy that maximizes the re-use of material resources and minimises the investment of energy resources.

What’s next?

These three trends are appealing to different communities, they have different strengths and weaknesses. Hence it is likely that they will co-exist and evolve in parallel. But picking a winner is not really the question here. It’s far more important to acknowledge what they have in common, the one aspect that they will push jointly: that common trait is the reduction in the need for industrial production. They challenge the baseline industrial business model that maximizes production to then push the products into the market, an approach that is driven by production capacity, but not by actual customer demand. Instead, they promote a shift towards tailoring production output to meet customer needs, and to achieve that at a lower industrial capacity than what is available today. The focus of customers would then shift toward “secure access to what you need” rather than “own as much as you can“. Consequently, ownership would not be an end in itself anymore. Ownership would once again be tied to a real need, not just a mild desire. And ownership would be less of a right and more of a responsibility.

Against this backdrop, I’d dare predict the demise of extreme consumerism, the end of the culture that had become the hallmark of developed economies since the 1950s. I’d anticipate the end of the narrow focus on shareholder value and direct return-on-investment that become fashionable in the 1970s. Along that trajectory, we would transform the entire socio-economic environment.

This post is the first of a short series on how we might rethink society, or rather, rethink some of the core concepts our society is built upon. While this post deals with ownership, the following posts will address trust in humans, trust in technology, and value. The need and opportunity for such a fundamental re-orientation arise from a cluster of disruptions emerging all around us: in politics, economics, Big Business, energy and production. These disruptions are themselves driven by mega trends like urbanization, globalization, digitization, and decentralization.