Ch. 30 The Power of the Collaborative Economy

"It is only by pulling together that we can hope to salvage and protect

what is most intrinsically valuable about our world,

and perhaps even improve lives over the long term."

- Richard Heinberg,

The Big Picture, Resilience.org

With what we have discussed so far in this book, we are inching our way towards a working plan to shift our culture and create a true Collaborative Economy. There is a larger picture here that should be getting clearer with each chapter you read. 

Let's start by going back over the lessons from Part 3: Energy. 

The First Two Industrial Revolutions (Ch. 22) - An Industrial Revolution is defined as a time period when advances in three specific areas (energy, transportation, and communication) coincide and revolutionize the way we organize, power, produce, and move goods and services in the world.

First Industrial Revolution

• Energy - coal and steam power
• Transportation - steam engine, steam powered locomotives/trains
• Communication - printing press, and later on the telegraph 

Second Industrial Revolution 

• Energy - cheap oil, electricity
• Transportation - internal combustion engine, automobiles, airplanes 
• Communication - telephone, television, radio

Rip Van Winkle's Total Lack of Surprise (Ch. 23) - The Third Industrial Revolution began in 1969 and continues today. We have seen a revolution in the area of Communication, but our advances in Energy and Transportation have been stymied by special interests and the fossil fuel industry. In these areas, we are still stuck with Second Industrial Revolution fossil fuels and internal combustion engines, as well as the pollution that results for their use.

Currently, we are stuck in the second Industrial Revolution, but not because there aren’t better ways to do things.

Ridiculously Expensive and Wildly Inefficient (Ch. 24) - Our current energy system is ridiculously expensive, and wildly inefficient. It is centralized, with fossil fuel plants dozens, if not hundreds of miles away from endpoint users. During the transmission from power plant to home or office, the loss is anywhere from 3-20% (Gunther, 2022).

The aggregate efficiency (ratio of potential to useful work that can be extracted from materials) in terms of energy is very low in our current system, sitting at 14%. (Japan sits at the top with 20%, seemingly the most efficient our system will ever get.) This means that 86% of potential energy in our system is lost entropy. It should be noted that the productivity of our system peaked in the 1990's.

Our system is also incredibly expensive. Fossil fuels are rare and expensive to harvest and refine. Another reason for this is externalities, which are side effects or consequences of industrial or commercial activity, without this being reflected in the costs of the goods or services involved (Deepak, 2019). These costs are also on the rise. Thanks to climate change, property damage is expected to increase by 60% by 2040 (Cho, 2022). Our indirect spending is expected to increase by 20% by the year 2100. We’ll be spending $2 trillion a year paying for property damage.

To achieve a better world, we need increased productivity and increased GDP growth. This is not likely under a system that is this expensive and inefficient. 

Fossil Fuels Kill… Kind of a Lot (Ch. 25)- Every living thing on Earth is impacted by fossil fuels and their emissions. They are responsible for ecological changes, as well as death and disease. More than 8 million people died from fossil fuel pollution in 2018 alone.

Fossil fuels are directly responsible for climate change, being the main source of greenhouse gasses. Every year, we are seeing an increase in the number of climate related deaths, caused by burning fossil fuels. The farming and fishing industries have been hurt by fossil fuels as well, harming the people who rely on these industries, whether it be for work or food as well.

An article written by Hannah Ritchie (ourworldindata.org, 2020), outlines a thought experiment that examines the “murder/death/kill rate” of each common form of energy. 

Here are the findings:

• Coal- 25 deaths per year
• Oil- 18 deaths per year
• Natural gas- 3 deaths per year

And the death toll of renewables?

• Hydropower- 1 death per year
• Wind- 1 death every 25 years
• Nuclear- 1 death every 33 years
• Solar- 1 death every 50 years

The point is, fossil fuels kill. Renewable sources are not just cleaner and more sustainable, they are much safer. 

The Third Industrial Revolution (Ch. 26)- Also called the dawn of the atomic age, the third Industrial Revolution brought about the rise of electronics, communication, and perhaps most importantly, the computer. It was the era of space exploration, research, and biotech.

A true Industrial Revolution must have advances in Energy and Transportation as well. With this in mind, the one true breakthrough (so far) has been the advancement in Communication, namely the internet. This new communicative technology has opened the door for a Third Industrial Revolution, encompassing all three advances. It is past time for a breakthrough in energy and transportation.

The Five Pillars of the Revolution (Ch. 27)- Based on the work of Jeremy Rifkin

1. Renewable energy: Fossil fuels are finite. What is needed are renewable sources.
2. Transforming buildings into micro-power plants: Tall buildings are ideal for both solar power and wind turbines. Large buildings also produce a lot of garbage, which can also be used to generate power.
3. Deploying hydrogen and other storage technologies throughout infrastructure: Energy like solar and wind need to be stored somewhere, and would be most efficient using existing infrastructure.
4. Using internet technology to transform the power grid into a decentralized energy sharing platform: When cities utilize renewable resources like wind and solar, they can actually generate a surplus which can be sold back to the power grid. Then this energy can be shared with continental neighbors.
5. Transitioning the transport fleet to electric, self-driving and shared vehicles: It’s a huge waste for everyone to have their car on the road at the same time. Instead, we can use vehicles with less emissions, and share them to take vehicles off the road.

Two Generations of Work (Ch. 28)- The transition to the Third Industrial Revolution will take about 30 years. While this may seem like bad news, it’s actually good news. Why?

• It provides us with the opportunity to create millions of new jobs.
• It allows us to create not just “jobs”, but worker-owner opportunities. This moves us closer to a new Collaborative Economy.
• A real lasting change requires a shift in culture, which takes time.

We must embrace the fact that this is a marathon, not a sprint. Transforming buildings into micro power plants, deploying storage technologies, using internet technology to transform the power grid, and transitioning the transport fleet, all represent 30 years of both skilled and unskilled labor. This is an opportunity to utilize the breakthroughs we’ve already achieved in Communication to take a leap forward in Energy and Transportation. And an opportunity for the working class to benefit from two generations of work.

The Sharing Economy (Ch. 29)- The Third Industrial Revolution is really about sharing resources, knowledge, and purpose. This includes the commons and public resources. “The commons is the cultural and natural resources accessible to all members of a society…” (Wikipedia). 

Our current capitalist “linear economy” is an economy full of waste, of profit over sustainability. In contrast, the Circular and Sharing Economies do their best to keep raw materials in a closed loop. We still extract natural resources, but extraction is minimized because once the product is manufactured and used, it is either reused, repurposed, or recycled.

Moving Forward

We have seen that profit driven, proprietary centralized systems are expensive and inefficient. 

While open, collaborative, cooperatively owned systems are more efficient, resilient, and equitable. 

Digital natives grew up with an open collaborative Communication system in the internet. This same principle applies to our new model of Energy and Transportation, as well as what we've already talked about with regards to the Economy. This new culture of sharing and collaboration will apply to every section of this book. This is what the future looks like. 

Power (economic, social, political and literal) will no longer be individual and exclusive, held only by the capitalist elites. It will now be networked and inclusive. 

Which brings us to The Power of the Collaborative Economy

According to Shane Hughes, there are three key movements that will act in concert to create a new Collaborative Economy. 

1. Cooperative Movement
2. Collaborative Movement
3. Change-Maker Movement (Tedx, The Unstoppable Rise of the Collaborative Economy)

We talked about the Cooperative Movement at length in Part 2: Economy. For a quick refresher, you can go back and read Ch. 21 Building a Better Economy. But the Cooperative Movement alone isn't enough to actually replace our current socioeconomic system. 

The ideas contained in what you just finished reading (Part 3: Energy) are at the heart of the Collaborative Movement. Ideas like a cooperatively owned energy grid, the Sharing Economy, etc. This movement gets us quite a bit closer to a real, lasting socioeconomic shift. 

However, it's not until we fully engage with the heart, and the purpose of these movements that we have the final ingredient that will render it "unstoppable." Though we have yet to talk in depth about the Change-Maker Movement, this will be the focus of Part 4: Ecology and Part 5: Equality. 

What we have talked about so far gets us ever closer to an equitable and inclusive economy and society, but it's not enough. 

There is one big problem that we have so far only hinted at. It's the one thing that has the potential to undo everything we have lived and worked for over generations. An existential threat that could render all of this irrelevant. 

Global warming. 

And so we end Part 3: Energy, and we move on to Part 4 - Ecology: The Purpose of Building a Better World.