I. Introduction

Access to affordable and essential medicines and medical care is fundamental to global public health. And despite the fact that patents are intended to promote innovation and progress, their impact on the development and access to life-saving drugs has been a subject of increasing concern. The current patent system, which grants exclusive rights to pharmaceutical companies to produce and sell drugs, has led to high medicine prices, limited the scope of research, and limited access to care for many people, especially those in developing countries. Pharmaceutical companies often charge high prices for their patented drugs, which many people cannot afford, resulting in unequal health outcomes. It is crucial to critically evaluate the patent system in the medical field and explore alternative ways to promote innovation, ensure access to medication, and improve the health of people around the world.

This research paper discusses the issue of patents in the medical world, drawing on several sources, including “Patients not patents: Drug research and development as a Public Enterprise ” “Academic Patents and Access to Medicines in Developing Countries ” “Is the Patent System a Barrier to Inclusive Prosperity? The Biomedical Perspective ” and “Making Medicines Accessible: Alternatives to the Flawed Patent System ” The goal of these papers is to explore the flaws in the current patent system and the role of pharmaceutical companies in medicine access and medical care. Overall, this paper emphasizes the importance of finding a solution to the issue of patents in the pharmaceutical and medical world. 

II. Flaws in the Current Patent System

The current patent system allows pharmaceutical companies to patent new drugs and prevent other companies from manufacturing and selling generic versions of those drugs for a fixed period of time, usually around 20 years. This gives the patent holder a monopoly on using, producing, importing, and selling the drug, which allows them to charge high prices to recoup their research and development costs and make a profit.

On one hand, proponents of strong intellectual property laws argue that they incentivize innovation and help ensure that pharmaceutical companies are fairly compensated for their research and development efforts. This, in turn, can lead to the development of new and effective medicines that benefit everyone.

On the other hand, critics argue that strong intellectual property laws can create barriers to medicine access, particularly in developing countries where access to affordable medicines is already limited. They argue that the high cost of patented medicines can make them inaccessible to the poor, leading to significant health disparities between developed and developing countries. Other studies have shown that the use of patents to encourage innovation in healthcare is ineffective and counterproductive. The patent system prevents researchers from sharing their ideas and promotes wasteful practices. Ironically, stronger patent protection may even lead to less innovation. When patents expire, drug companies frequently sue competitors to prevent them from selling cheaper generic versions. The European Commission estimated that these legal battles had cost the EU €3 billion over an 8-year period.

Before the mid-1990s, pharmaceutical product patents were not permitted in many developing nations. This decision was often a deliberate policy choice, based on the belief that the advantages of low-cost access to medication outweighed any potential negative consequences resulting from the absence of domestic patents on multinational companies’ research and development decisions. However, since the World Trade Organization’s adoption of the Trade-Related Intellectual Property Rights (TRIPs) agreement in 1995, all countries have been required to allow pharmaceutical product patents. In the post-TRIPs era, there is a widespread apprehension that the patents will increase prices, which in turn will restrict access to essential medicines in developing countries.

The current patent system has several flaws that can lead to high medicine prices. For example:

1. Patent monopolies allow pharmaceutical companies to charge exorbitant prices for essential medicines. This can make them unaffordable for many people, particularly those in developing countries who cannot afford to pay high prices for life-saving treatments.
2. The high cost of drug development is often used as an argument to justify high drug prices, but the actual cost of drug development is often overstated. Pharmaceutical companies often spend more money on marketing and lobbying efforts than they do on research and development. Independent analysts have estimated the cost of developing a new drug to be significantly lower than the industry’s claim of around US $1 billion, and the Drugs for Neglected Diseases Initiative (DNDi) believes they can develop a new drug for $110 million to $170 million. These costs include a theoretical expense for failed projects. Ultimately, drug prices do not reflect research and development expenses but rather what heavily subsidized “markets” are willing to pay. Making private insurance more expensive, as well as government-supported healthcare thus wasting tax money.
3. Pharmaceutical companies can extend their patent protection by making minor changes to a drug or by obtaining multiple patents on the same drug. This practice, known as “evergreening,” can extend a drug’s patent protection for years and prevent the development of generic versions. The strategic value of patents has expanded beyond their role in promoting innovation. Even if a patent does not generate revenue, it can still be highly valuable for its strategic benefits. Using a patent as a blocking strategy is common practice
4. The current patent system does not incentivize the development of medicines for neglected diseases that primarily affect people in developing countries. This is because there is often little profit to be made in developing treatments for these diseases. 

On top of increasing prices and access to drugs  the current patent has other significant flaws: 

1. “The European Commission has estimated that adverse reactions kill about 200 000 EU citizens annually at a cost of €79 billion.” A lot of deaths could have been prevented because our profit-driven healthcare system encourages excessive prescribing, and many patients may not have needed the drugs that ended up killing them, but the profit generated by these drugs creates an incentive to keep manufacturing and prescribing them. This system is both unethical and inefficient because people may die without access to necessary medications as well as overmedication. On top of that knowledge is not shared, leading to redundant work and missed opportunities for discovery. 
2. “Like a poorly conceived new drug with deadly side effects, the modern medicine patent regime is a relatively recent innovation and, not a good one.” International trade agreements, such as the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), have further complicated the issue of medicine access. TRIPS requires member countries to implement strong intellectual property laws, including patent protection for pharmaceuticals. However, this has been controversial, as it can make it difficult for developing countries to produce or import affordable generic versions of patented medicines. According to the World Bank: “Nothing is more controversial in TRIPS. […] Many developing countries see little potential benefit from introducing patents. In contrast, potential costs could be significant.”

Overall the increase in high-quality medicine significantly decreased illness and death rates caused by diseases in developed nations in the previous century. Nonetheless, today, a substantial number of people, approximately 2 billion, particularly those in developing nations, do not have access to vital drugs that could save their lives. The patent system should not control the biomedical technology sector because these technologies are crucial to people’s well-being and, in some cases, can mean the difference between life and death for patients. Instead, the entire biomedical sector should be excluded from the patent system and not be controlled by private companies through their patent monopolies.

Alternative methods of ensuring that medicines remain affordable and accessible to everyone include open-source drug development, prize funds for drug development, compulsory licensing, and patent pools. These alternatives aim to promote innovation while ensuring that essential medicines are affordable and accessible to everyone who needs them. I will describe alternatives more in detail in part 4. 

III. The Role of Pharmaceutical Companies

The pharmaceutical industry is a massive global business, worth billions of dollars each year. It is made up of numerous companies that develop, manufacture, and market drugs and medical devices. Corporate interests play a significant role in the pharmaceutical industry, as these companies are driven by the need to make a profit. This profit motive can sometimes conflict with public health interests.

This maximization of profits leads them to concentrate on developing drugs to treat widespread chronic illnesses. However, they often create minor variations of existing drugs that are patentable but do not provide any additional therapeutic benefits. The current healthcare system does not provide sufficient incentives to research and develop cost-effective non-drug interventions, which may actually be more beneficial. A significant portion of healthcare spending is on drugs to treat conditions like type 2 diabetes, hypertension, and high cholesterol, which are largely caused by poor diet and a lack of exercise. Implementing policies like stricter regulations on unhealthy foods and drinks, subsidized healthy school meals, and courses on preparing nutritious and affordable meals can help people lose weight, making drugs unnecessary. Similarly, the increasing use of psychiatric drugs has led to an increase in disability pensions in many countries. In most cases, psychotherapy is a better option than medication as it has a greater chance to reduces the risk of suicide.

Pharmaceutical companies also engage in aggressive marketing practices to increase sales, which can lead to the overuse and misuse of medicines. Regulatory standards in the field of cancer treatment are notably inadequate. Despite the exorbitant costs associated with many cancer drugs, numerous drugs have been approved without the support of a single randomized trial and with only surrogate outcomes, such as disease-free survival rather than longer lifespan. Additionally, newly developed cancer drugs are typically not superior to existing ones, and their use may only increase survival by one or two months at most. This creates lots of waste: “Only 11 (1%) of 1032 new drugs approved in France between 2005 and 2014 were considered real advances” (We can expect this number to be similar in most developed nations) Furthermore, pharmaceutical companies are known to lobby for strong intellectual property laws, reduced drug trials, engage in legal battles to protect their patents, limiting competition and further driving up the cost of essential medicines. Some companies have increased the price of drugs by a significant amount by just acquiring patents.Turing Pharmaceuticals raised the price of Daraprim tablets from $13.50 to $750 each, causing the annual cost of treatment for some patients to increase to thousands of dollars. Similarly, Rodelis Therapeutics increased the price of Cycloserine from $500 to $10,800 for 30 pills.

The research done by pharmaceutical companies is often focused on profitable markets. Only around 1% of newly developed drugs in the late 20th century were for tropical diseases like African sleeping sickness, dengue fever, and leishmaniasis. Companies are driven to make a profit and satisfy their shareholders, so it’s not surprising that expensive research and development is more focused on illnesses prevalent in developed countries that can afford to pay for these drugs. Drug companies invest in what will yield the highest returns, and this often leaves people in poorer countries without access to essential medicines. For example, the patent system provides incentives for developing drugs that cater to the needs of affluent nations, such as those for male pattern baldness. However, it does not encourage research and development of medications that address the illnesses which affect and cause death to many impoverished people worldwide. Other examples are drugs for erectile dysfunction and acne while neglecting the research and development of medications to treat diseases that affect the poor and cause widespread suffering and death. As a result, only a single new drug has been introduced in the past 50 years to treat tuberculosis, which claims the lives of millions of people each year.

The impact of these practices can be devastating, particularly for patients in low- and middle-income countries who cannot afford to pay high prices for essential medicines. This has led to calls for greater transparency and accountability in the pharmaceutical industry, as well as for stronger regulatory oversight to ensure that medicines are priced fairly and are accessible to everyone who needs them. 

The need for transparency and accountability in the pharmaceutical industry has become increasingly urgent in recent years, as global public health challenges such as the COVID-19 pandemic (which will only increase with climate change) have highlighted the critical importance of access to affordable medicines and medical devices. We can only reach immunity by giving access to vaccines to everyone. Or at least opening patents for productions. By promoting transparency and accountability, policymakers can help ensure that the pharmaceutical industry serves the needs of public health, rather than just the interests of corporate shareholders.

This includes greater transparency in pricing and research and development costs, as well as the need for stronger regulation to prevent marketing practices that prioritize profits over public health. It also includes ensuring access to clinical trial data and increasing public funding for research and development of essential medicines. It is also important to rethink the way with patent medical research and start thinking about open-source alternatives. 

IV. Potential Solutions

Alternative methods of ensuring affordable and accessible medicines include policies such as: 

1. Compulsory Licensing: This policy allows governments to license the production of a patented medicine to a generic manufacturer, without the permission of the patent holder. This can help to increase competition and lower the price of essential medicines.
2. Patent Pooling: This policy involves the creation of a collective patent license, allowing multiple organizations to access and use patented technologies or medicines. This can help to increase access to essential medicines, particularly in developing countries.
3. Differential Pricing: This policy involves setting different prices for the same medicine in different countries or markets, based on their ability to pay. This can help to ensure that essential medicines remain affordable and accessible to those who need them most.
4. Patent removal in certain regions. For example, the person who owned the crucial patent for a significant HIV medication called stavudine, convinced the company who licensed the patent, Bristol-Myers Squibb, to refrain from enforcing it in South Africa. This action resulted in a substantial decrease (up to 30 times) in the price of the drug and allowed for significant expansion of HIV treatment programs in South Africa. Sadly this case is almost unique. 
5. Public-Private Partnerships: This policy involves collaboration between the public and private sectors to develop and distribute essential medicines. This can help to increase access to essential medicines, particularly in developing countries where healthcare infrastructure may be limited. Public funding with no patent but incentives for private companies to produce the medicine.
6. Alternative funding solutions such as Etica create an incentive without the need for policy fundamental policy change. It is an open-source protocol for medical research without intellectual property. It aims to create an alternative funding solution for medical research while removing patents. A true win-win solution with an incentive for innovative research. Researchers are financially rewarded throughout the process of research, removing the need for IP. All solutions found within Etica are immediately available for anyone to use without patent restrictions. Open Source has already proven to be faster and more efficient in many other fields like Software development and can fundamentally change how we do medical research.

While these policies and solutions have the potential to improve medicine accessibility, there are also potential limitations to consider. For example, compulsory licensing may discourage pharmaceutical companies from investing in research and development, as it reduces their potential profits. Patent pooling may also result in reduced incentives for innovation, as it reduces the potential financial rewards for patent holders. Differential pricing may also result in higher prices for those who can afford to pay, which can be seen as unfair. But overall all of these solutions would help save lives and make the world a fairer place. 

In conclusion, the patent system for the medical field needs to be rethought, transformed, and improved to stop wasting public money and losing lives because of corporate and individual greed. 

—–

Another paper that must be read, is very high quality, complete, and detailed. It is mentioned in all the other papers on the subject as a source: “Deadly gaps in the patent system : an analysis of current and alternative mechanisms for incentivising development of medical therapies.” 

Also interesting: “Are Patents Really Necessary?”

The production of credit-money in a banking system is a self-generating, relatively autonomous process in so far as the “bank can always grant further loans, since the larger amounts going out are then matched by larger amounts coming in

Essence of capitalism => elastic creation of money by means of readily transferable debt

Capitalist credit-money was the result of two related changes in the social relations of monetary production in medieval and early modern Europe

• Private media of exchange became detached from the existence of any particular commodities in exchange and transit, and were used as pure credit between traders => bills of exchange
• Bills became detachable from the particular individuals name in the creditor-debtor relation. Signifiers of debt became transferable to third parties, and could circulate as private money within commercial networks
  • Eventually completely depersonalized

Promise to repay these national debts became the basis for public credit-money

The De-linking of the Money of Account and the Means of Payment

• After the fall of Roman Empire, the two basic functions of money as a unit of account and means of payment were unable to operate => the social and political system that was “accounted for” by the abstract money of account no longer existed
• The silver penny (Roman denarius) was the basic coin, but it was produced in a vast proliferation of different weights and fineness by the myriad jurisdictions
• Holy Roman Empire, Charlemagne (768 – 814) => imposed a money of account derived from the Roman system
• The money of account (based on pounds, shillings and pence) did not necessarily correspond to any of the actual minted coins in use
• The measure of value was a pure abstraction for monetary calculation
• “Imaginary money” was invariable

• Complicated monetary relation bc money of account and coinage were different
• Money of account, not their metallic content, determined the relative values of coined money

Under these circumstances, monetary policy involved manipulation of one or both of the 2 elements, the weight and fineness standard in an actual coin

• Monarchs gained extra seigniorage profit by reducing the metallic content of coins
• But monarchs also had an interest, on the other hand, in extending the issue of their own coins

• It was much easier to manipulate to impose and manipulate a sovereign money of account => to declare a value of existing coins in relation to an “imaginary” standard coin that need not be minted
• Depreciating (Crying down) => alternative to increasing the tax rate as a mean of increasing the monarchs purchasing power

The De-linking of the Money of Account and the Evolution of Capitalist Credit-Money

• The separation of moneys of account from means of payments and the free circulation of coins with multiple territorially determined values had 2 important implications for the development of modern capitalist banking and its distinctive forms of money
  • Circulation of coins outside their jurisdiction of issue increased the need for moneychangers
  • Particular circumstances of anarchic coinage and increasingly long-range trade provided the stimulus for the development of the bill of exchange into a form of transnational private money denominated in an agreed money of account

• Late 15th century, Pacioli listed 9 ways by which payment could be made
  • Cash, credit, bill of exchange and assignment in a bank
• Money changing / deposit banking + use of credit instruments were the result of the geopolitical structure of medieval Europe
• 4 elements that culminated capitalist credit money
  • (re-)emergence of banks of deposit in the late 13th century
  • Formation of public banks
  • Widespread use of the bill of exchange as a form of private money
  • Gradual depersonalization and transferability of debt in the major European states during the 17th and early 18th centuries
• Major development => integration of the banker’s private bill money with the coinage of sovereign states to form the hybridized, or dual, system of credit-money and a metallic standard of value

“Primitive” (non-capitalistic) banks of deposit

• Early medieval bankers took deposits of cash for safe keeping, which eventually permitted the book clearance of transfers between their depositors => did not issue credit-money
• “Book” transfer and clearance between depositors as a means of payment
  • Book money exists as a currency substitute 
• The bankers could also use some of the deposits to make loans or invest in trade
• Both augment the stock of public currency => complex interpersonal credit relations orchestrated by the bank (16th-17th century Venice)
• Accepting deposits, book clearance of credit and the lending of coined money “merely transfers purchasing power from one person to another”
• Banking only begins when loans are made in bank credit

Early public banks

• 14th century, bankers converted currencies for the commune, sought out forged or forbidden coins and generally supervised the circulation of the coined currency => gov required records to be available for inspection
• Public banks were established at Barcelona in 1401 and at Valencia and Genoa in 1407
• Venice’s Banco della Piazza di Rialto (1587) also accepted bills of exchange payable to its depositors and converted the state’s debt into transferable bonds
• At this stage, the clearance of debts and credits in the banks’ giro of depositors effectively monetized the city-state debts
  • The suppliers of goods and services to the city gov. were able to draw on their bank accounts before payment from the state had been received

The bill of exchange

• The transformation of the social relation of debt into the typically capitalist from of credit-money began when signifiers of debt became anonymously transferable to third parties => 2 periods
  • 16th century, forms of private money such as bills of exchange were used in commerce, and existed alongside the plethora of diverse coinage of the states and principalities
  • Late 17th century some states outside Latin Christianity integrated the monetary technique with public deposit banking and began to issue fiduciary money (fiat money)
• Bill of exchange, form private money => public currency
• Every coin had their own value
  • Creation of a small network of bankers => used their own version of the Carolingian 1:20:240 money of account as the basis for their bills of exchange => used to finance trade
• Exchange by bill required 2 networks
  • Traders
  • Bankers
• Trader would draw a bill on a local banker => uses as a mean of payment for specific goods imported from outside the local economy => exporter of the goods presents the bill to his local representative of the banking network
  • In their simplest form, the bills represented the value of the goods in transit
• The bankers were able to enrich themselves and promote the use of bills through a series of exchanges that involved the conversion of money of account into another => own interest rates were fixed and based on an abstract coin upon which the private bill money was based
• Bankers had to control the direction of both an outward flow and an inward return bills through their networks
• The bankers could control the direction of a bill through the moneys of account of the myriad jurisdictions in a way that was always profitable to them
• The bill of exchange system allowed an increase in trade without any increase of coinage in the different countries

The depersonalization of debt

• Exchange per arte (dry exchange)=> the creation of credit in the bill of exchange independently of the existence of any actual goods in transit
  • Dissociation of pure credit from the real representation of goods
• Oral contracts => transferability of debt to the point where it served as a general impersonal means of payment was not possible
• The widespread use of the bill in dry exchange undoubtedly hastened the transition from oral to written contracts
  • Opened up the possibility that the signifier of bilateral debt could be used in the settlement of a third-party debt
• Pure monetary instrument which consisted exclusively in a promise to pay denominated in an abstract money of account
  • Further dissociation was effected => circulating money was separated from the precious metal manifestation that it had taken in previous 1,000 years

=> remained private money (not widely transferrable)

• This development occurred in Holland then England => outside of the sphere of influence of the exchange bankers
• End of 16th century => contracts were written on the back of a bill, and this was accepted as an order to pay => became depersonalized

• The exchange bankers’ networks weakened to the point of collapse in the aftermath of typical capitalist defaults and liquidity crises
• The French state reasserted sovereign control of its monetary system
• 1577, establishment of a uniform metallic standard that reconnected the money of account and means of payment and by the prohibition of the circulation of foreign coins

The Transformation of Credit into Currency

• How the metal coinage could be augmented
  • Bank clearance of debt 
  • The creation of money in the form of claims against the public debt
  • Exchange of bill per arte
• Exchange of bill per arte => not widely accepted
  • Informal contracts by which the mercantile plutocracies of the Italian city-states lent to each other through the public banks were constantly jeopardized by the factional rivalry that was typical of this from of government
• The liquidity of bills of exchange was almost entirely restricted to banking and mercantile networks, and could not evolve into credit money currency
• Until private credit-money was incorporated into the fiscal system of states which commanded a secure jurisdiction and a legitimacy, it could be argued that it remained, in revolutionary terms, a dead-end
• The minting of coin was both a symbol and a real source of the monarch’s sovereignty
  • paradoxically , the first step in the creation of stable monetary spaces that could sustain credit-money was the strengthening of metallic monetary sovereignty
• England => credit-money was first successfully established as public currency
• Its widespread use involved a loss of sovereign control – especially over the profits of seigniorage and the manipulation of the money of account
• From 14th to mid 17th century English kings banned the importation of foreign coins and the export of bullion, ordered exporters to supply their bullion to the mints, attempted to prohibit the bill of exchange, and generally sought to limit credit
• The controls on exchange and the domestic unit of account exercised by the English monarchy largely prevented the promiscuous circulation of coins and multiple moneys of account that took place in continental Europe
• Setting of four ounces of sterling silver as the invariant standard for the pound unit of account lasted until WW1 => stability
• The maintenance of the standard encouraged a steady supply of long-term creditors for the state, and in this way provided a secure basis for the eventual adoption and expansion of the credit-money system

• England in 2 steps:
  • Creation of a single monetary space for a national coinage
  • Introduction of credit-money into the system

Sovereign monetary space in England

• Henry VIII => to finance his costly wars
  • “Great Debasement” (1544 – 1551), the silver content of the coinage was systematically reduced from 93% to 33%
• The debasement did discredit the monarchy and create insecurity by destroying confidence in money as a store of value => threatened political and social order
• During Elizabeth 1, England became a more coherent linguistic and cultural unit
• The emerging English nation-state became the basis for the impersonal trust that eventually enabled the forms of credit-money to become established outside the interpersonal banking and exchange networks in which they had been contained
• The late 16th century English state had established a form of money that was in al important aspects the same that which had disintegrated in Rome more than 1,000 years earlier
• The Bank of England was founded, and an enduring state credit-money was issued => only after political struggles
• “Dutch finance” => creation and monetization of national debt
• The circulation of mere promises in the form of deposits and stock held by the mercantile and affluent classes had proved to be unstable in Venice and was viewed with suspicion
• “Land is the bottom for banks”
• Mere promises to pay were, in fact, a new form of money in that they were not actually representative of any material value
• In England during the 17th century a “civic morality of trust” was developing that could sustain a wider credit-money economy outside the closed networks of the metropolitan mercantile and political elite
• New culture of credit based upon a currency of reputation was constructed
• Unrealistic trustworthiness, which could be claimed by acting in a reputable manner, replaced the obligations to honour agreements based on particularistic ties of family or kin

The dual monetary system: the hybridization of credit and coinage

• Charles II’s debt default in 1672 hastened the adoption of public banking as a mean of state finance
• However compared with state borrowing in the Italian and Dutch republics, English kings, like all monarchs, were disadvantaged by the very despotic power of their sovereignty => potential creditors were deterred by the monarch’s immunity from legal action for default
• => Culminated to the Glorious Revolution and the invitation to William of Orange to invade and claim the throne
  • William was intentionally provided with insufficient revenues for normal expenditure => was forced to accept dependence on Parliament for additional funds
  • With William’s approval and the expertise of his Dutch financial advisors, the government adopted long-term borrowing => funded by specific tax revenues
• The state’s creditors were drawn from London merchants, who backed a proposal for a Bank of England, in order to take the financial developments a step further. They provided £1.2m for the Bank’s stock, which was then loaned to the king and his government at 8% interest, which, in turn, was funded by hypothecated customs and excise revenue
• In addition the the interest, the bank received an annual management fee of £4,000 and a royal charter that granted it the right to take deposits, issue bank notes and discount bills of exchange => 1697 => a monopoly on banking and the right to issue further bank bills and notes to the total of newly subscribed capital
• The privately owned Bank of England transformed the sovereign’s personal debt into a public debt and, eventually in turn, into a public currency
• The state was financed by loans from a powerful creditor class that were channelled through a public bank => each had interest in the long-term survival of the other
• This fusion of the 2 moneys, which England’s political settlement and rejection of absolutist monetary sovereignty made possible, resolved 2 significant problems
  • The private mones of the bill of exchange was lifted out from the private mercantile network and given a wider and more abstract monetary space based on impersonal trust and legitimacy
  • Parliament sanctioned the collection of future revenue from taxation and excise duty, to service the interest on loans
  • Monetary perspective => the most important long-term consequence => monopoly to deal in bills of exchange
    • => fused private money and public currency
• The 2 main sources of capitalist credit-money that had originated in Italian banking were now combined for the first time in the operation of a single institution
  • Public debt => state bonds
  • Private debt => bills of exchange
• These forms of money were introduced into an existing sovereign monetary space defined by an integrated money of account and means of payment based on the metallic standard
• 1727 => the coinage was placed securely on a gold basis
• As credit-money became the most common means of transacting business, England also moved towards the creation of the strongest metallic currency in history
• English state’s integration of the two forms permitted a further development of credit-money
  • Coins and notes and bills were eventually linked by a formal convertibility in which the latter were exchangeable for precious metal coins
• For most of the 18th and 19th centuries, the issue of notes based on the state’s promises was also given the added guarantee of convertibility into gold at a fixed rate

John Maynard Keynes: A treatise on money 

The classification of Money 

Money of account in which debts and price and general purchasing power are expressed -> primary concept of a theory of money 

Debts: Contract for deferred payment 

“Perhaps we may elucidate the distinction between money and money of account by saying that the money of account is the description or title and the money is the thing which answers to the description.” page 3

Show the example with the King of england from keynes. “A contract to pay ten years hence a weight of gold equal to the weight of the king of England is not the same thing as a contract to pay a weight of gold equal to the weight of the individual who is now King George. It is for the State to declare, when the times comes, who the king of England is.” 

The state is the one that will set up this money of account 

Knapp’s chartalism: The doctrine that money is peculiarly a creation of the state, that they control it 

It is important to keep in mind that the money of account must be continuous. When the name is changed, the new unit must bear a definite relation to the old. The state will give a formula which defines the new money in terms of the old. 

Money of account splits into two sides: offers of contracts, contracts and acknowledgement of debt,  also called bank money, which is used by passing from one hand to another, with  proper money (state money) to settle transactions 

Representative money: next evolution of state money 

The state may own money too, but can also declare that the debt itself is an acceptable discharge of a liability. A particular part of bank money is transformed in money proper which is called representative money. 

The forms of money: 

Now they are three categories 

Fiat money and managed money are sub categories of representative money 

“Commodity money is composed of actual units of a particular freely obtainable, non monopolised commodity which happens to have been chosen for the familiar purposes of money, but the supply of which is governed like that of any other commodity.”

Fiat money is representative (or token) money now generally made of paper except in the case of small denominations. It is created and issued by the state, but is not convertible by law into anything other than itself, and has no fixed value in terms of standard 

Managed money is similar to fiat money, except that the state undertakes to manage the conditions of its issue in such a way that, by convertibly or otherwise, it shall have a determinate value in terms of an objective standard. 

Managed money is kind of hybrid, cause the like commodity it has a standard value. It is similar to fiat money in the way that they are representative or paper money which has no value apart from the law and state. 

Keynes, managed money is in sense, the most generalized form of money. 

Current Money: 

One fundamental elements in the theory of money is the total quantity of money of all kinds in the hands of the public

The typical modern banking system: there is the central bank and members banks. The total stock of state money is partly held by the public, the central bank and the member banks. The state money held by the central bank constitute its reserve against deposits. All the central bank money is held by the member banks. The central bank money plus the state money held by the member banks represents the reserve of the member banks, which they also hold against deposits. All of this combined creates the current money. 

Coined money which has value higher than the commodity it is made off is major first step toward creation of representative money. Most commercial areas actually didn’t coined their money. The stamping of the piece of metal was just a piece of local vanity, patriotism or advertisement. Egypt didn’t coined before the Ptolemies, and china never coined silver until recent times. See more examples page 11

The first state reform of the standard of weight is from babylonia at the end of the third millenium BC. Even other standard like barleycorns or carats or cowries. 

“Money, like certain other essential elements in civilization, is a far more ancient institution that we are taught to believe some few years ago” 

There was no evidence that representative money for while. Sometimes coins had higher value than their commodity value but it was because convenience, prestige, safety, or just aesthetics. 

“The true link between commodity money and representative money is to be found, perhaps, in commodity money, the supply of which is limited by absolute scarcity rather than by cost production, and the demand for which is wholly dependent upon the fact that it has been selected by law or convention as the material of money and not upon its intrinsic value in other uses” 

The earliest beginning of bank money, are lost in antiquity. “For the use of bank money depends on nothing except the discovery that, in many cases the transference of debts themselves is just as serviceable for the settlement of transactions as is the transference of the money in terms of which they are expressed” 

Bank money in the shape of bills of exchange -> not less useful and necessary than today especially for the purpose of settling transactions at a distance, owning to the cheapness of its cost of transmission as compared to the cost and risks of transporting money proper. 

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

What’s wrong with current medical research and an example of how a cryptocurrency can solve these shortcomings

First, this is important to understand what are some problems with medical research to then understand how cryptocurrencies can help solve these problems:

• Medical research has a money problem
• Many studies are poorly designed to promote an agenda.
• Replicating results is necessary for good science, but rare
• Peer review has many shortcomings
• Too much science is locked behind paywalls
• IP is slowing down science

Medical Research has a money problem

Medical research funding in many places around the world can come from public sources (tax money) as well as private organizations which distribute money for equipment, salaries, and other research expenses. This is one of the biggest challenges for medical scientists, is to find a sustainable source of many to run experiments and concentrate on the science.

In most places around the world, Governments or public organizations provide funding for research, which is good, as there are fewer chances of conflict of interest, but there is not enough. The USA offered 900 federal grant programs, and half of this funding, 800 billion USD goes to healthcare. In 2020, the National Institute of Health accepted only 21% of research grant proposals (11,000/55,000). Source: https://report.nih.gov/nihdatabook/report/20

So researchers then look for private funding, which will support science if it supports their corporate agenda. This is catastrophic because it means that some science is guided not by what is good for society/humanity in terms of science, but by what will make the most return on investment to these private funders. Much of nutrition science is funded by the food industry, and this is a major conflict of interest, food companies will not change the results of research, but they will not fund something if the hypothesis goes against their interests, thus shaping how science evolves. This is the same for drugmakers that fund most drug clinical trials. This means that drugs for a disease that won’t be profitable (In places with poor populations or very few people touched by the disease) might only get funding from charitable organizations (less than 3% of funding in the USA).

Since scientists have to compete for this finite and decreasing amount of funding (at least for public funding), it creates conflicts of interest between scientists of the same field, puts pressure to publish many papers instead of a few quality ones, and it forces scientists to oversell their work (use buzzwords to get funding). This competition between scientists for funding affects what people study, the risk they take, and the risk they don’t take, overall it pushes researchers to do predictable, safe and hyped science. This also means scientists have to spend a lot of time and energy competing for funding and writing grant proposals which means less time for science.

On top of that, grants are usually short-term (3-5 years), which means that scientists are less likely to apply for long-term projects, even though these are usually the ones that create the biggest discoveries. New, experimental, but potentially breakthrough research takes a long time to produce, requires the work of many people, and it does not always pay off. So scientists often avoid these types of studies that don’t easily get funding and prefer short-turnaround, safe research.

Science is pressured to display certain results

Medical researchers are judged by the research they publish, and they have tons of pressure to get certain types of results. If you get good splashy results, it will be easier to get published in a prestigious journal, but if they get mediocre results, many scientists consider presenting the data differently to keep it exciting.

“The consequences are staggering. An estimated $200 billion — or the equivalent of 85 percent of global spending on research — is routinely wasted on poorly designed and redundant studies, according to meta-researchers who have analyzed inefficiencies in research. We know that as much as 30 percent of the most influential original medical research papers later turn out to be wrong or exaggerated.”

Source:https://www.vox.com/2016/7/14/12016710/science-challeges-research-funding-peer-review-process

Rewards for medical research should be based on the research methods, and quality of analysis, not just the outcomes of the research.

Going back to the funding problem, this problem is exacerbated by private funding methods that expect certain results that align with their agenda.

Not rigorous enough

There might be a “crisis of irreproducibility”, a survey made by nature.com about reproducibility (1576 researchers) concludes that “70% of researchers have tried and failed to reproduce another scientist’s experiments, and more than half have failed to reproduce their own experiments.”

The data from the survey also reveal contradictory thinking about reproducibility: “52% of those surveyed agree that there is a significant ‘crisis’ of reproducibility, less than 31% think that failure to reproduce published results means that the result is probably wrong, and most say that they still trust the published literature.”

Source: https://www.nature.com/articles/533452a

On top of that, studies that fail to replicate results from a “good” study might not get published. Studies need to be at the cutting edge of science, with new and positive results, this pressure prevents necessary replication and might produce many false positive results.

Some causes could be a lack of understanding of statistics, poor experimental design, lack of mentoring from senior researchers, fraud, hyper-competition, lack of resources, or simply selective reporting of results.

Peer review needs to be improved

Peer review is an essential aspect of research, scientists send their articles to a journal, and if the journal accepts the article, it is sent to peers in a similar field, for constructive criticism, to then be published or not in that journal. The journals set up a blind reading, reviewing, and editing of the articles to reduce bias. This system in theory works, but it has many shortcomings, it often does not detect fraud, selective results, and other problems. Researchers are often not paid to review articles, which creates less incentive to do serious peer reviews.

Science is behind paywalls

A lot of science and research is locked away and not easily accessible. They are often costly to access and can be hard to find. The publication process can also be slow, which slows down many other processes. Many Researchers have argued that academic research should be free for all to access, as many for-profit publishers slow down the pace of science. One article in a scientific journal can cost you 30$, some yearly subscriptions are 300$ and up to 10,000$. On top of that, it can be quite expensive to publish a scientific article: “the average cost to publish an article is around $3500 to $4000” and most of that cost is falling on the researchers themselves.

Source: https://www.enago.com/academy/what-is-the-real-cost-of-scientific-publishing/

Science is slowed and locked by intellectual property

Protected patents are a relatively recent invention, the first modern patent system was created in 1474 in Venice, it has since evolved into a complex set of laws and regulations, both at the local and international levels.

Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=585661

When patent rights are expensive, it makes successive activities more costly, as research will have to seek permission from patent holders, and when patents are debated, this can slow down the progress of science and technology. Patents are also used as a business strategy, often used by large firms, that use patents to entrench their position in the market by making it expensive/complicated/impossible to research certain subjects (many times not even using the patent). The current patent system does not reward follow-up research, as scientists are scared of litigation.

Is the right to intellectual property or Human rights more important to you? I believe that patents should not extend so far as to interfere with individuals’ dignity and well-being. Where patent rights and human rights conflict, human rights must prevail.

This is an overview of present problems in medical research, and we could in much more depth about the systematic shortcomings in science. But this is good enough to understand what needs to be solved in the medical research field. A great example of a project that solves these problems is r/etica. But I am sure there are other cryptos that are similar.

What is Etica?

You can learn a lot from Etica on the main website: Eticaprotocol.org

From u/makeasnek: “Etica is a blockchain and platform for funding medical research. It also produces rewards for those who evaluate proposals and vote on them or otherwise participate in Etica. These can fundamentally change how scientific research is incentivized, opening a new world of patent-free, open medical research. Etica runs off its own version of the Ethereum Classic blockchain, which uses proof-of-work to mint coins and secures the network.”

Etica funds research with its inflation, the distribution of ETI coins will look like this:

Each Era is approximately 1 year.

Era 1: 1 890 000 ETI to mining reward and 210 000 ETI as protocol reward

Era 2: 1 680 000 ETI as mining reward and 420 000 ETI as protocol reward

Era 3: 1 470 000 ETI as mining reward and 630 000 ETI as protocol reward

Era 4: 1 260 000 ETI as mining reward and 840 000 ETI as protocol reward

Era 5 to Era 10: 1 050 000 ETI as mining reward and 1 050 000 ETI as protocol reward

The mining of ETI will then stop (in 10 years) and the 2.61% of inflation will be used to reward researchers and voters.

Grant proposals are grouped by disease on Etica.io, and then users (holders of ETI) can vote and get rewarded for correctly participating. In the long term, Etica.io will be only one of potentially thousands of websites connected to the Etica blockchain. Potentially, instead of having science locked in journals with paywalls, We could have websites directly connected to the Etica blockchain, without restriction and free of any patent. To that extent, the Etica blockchain can be called a permissionless decentralized science journal.

Any proposals can be anything, the community will decide what gets funded or not. I recommend reading this Reddit post to understand Etica better:reaction to makeasnek

If we go back to the main problems (TLDR):

• Big money problem: Etica provides a new additional decentralized funding system for medical researchers to use. We are not naive, most people will act in their own interest. Good and evil people will come to Etica but what is different is that Etica is not under the control of the incumbent of the system that chooses the pace and direction of research according to their vested interest.
• Poorly designed studies: It will be important for the community to select quality and not flashy research. In fact, the token holders have a collective interest that Etica maintains its value. If the network globally accepts useless proposals then the network is going to become worthless. A key part of the Etica system is that the token holders have a responsibility to get the best proposals rewarded so that people keep increasing the amount of work they do for each proposal and create a healthy open-source ecosystem.
• Replicability problem: Etica’s main aim is not to solve this problem, but open science contributes to more replicable science.
• Peer review: Peer review is incentivized on the Etica platform and can be a way to earn more ETI, this means researchers can be paid to peer review. Voters that make the curation work are rewarded with 38.2% of the ETI research rewards. Token holders will not necessarily be scientific experts on everything, but we can imagine different ways people can get informed on proposals and share information. They can use earned ETI to finance expertise and do quality peer reviews.
• Paywalls: All Etica proposals are public and free to read, as well as easy to access.
• Intellectual property: Etica removes intellectual property which is costly to medical research and human rights.

Executive Summary

“The average U.S. household has 300,000 things, from paper clips to ironing boards.” Source and a lot of it are rarely used. Would there be a better way to reallocate all this extra stuff that we have? These things that we can not get rid of, for many reasons, like monetary or sentimental value, but we don’t actually need them every day, so what’s the point of owning them? We have been arriving at a point where it is now normal to buy something, use it a few times and throw it away, this is the kind of behavior that is dangerous for our planet. In recent years, there has been a growing concern for the environmental crisis we are facing, many people are trying to find new ways to produce and consume as our current model is not sustainable. The concept of sustainability “focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs.” Source. The sharing economy, by definition, tries to solve this problem. But it is not easy to define the sharing economy in a way that keeps clarity while also including the wide variety of ways the term is used. Source. A great definition of the sharing economy is “the peer-to-peer-based activity of obtaining, giving, or sharing the access to goods and services, coordinated through community-based online services” Source. The goal of the modern sharing economy is to better utilize underused goods and services which differs from more traditional types of businesses where companies hire employees to produce products that can be sold to consumers. In the sharing economy, individuals are able to share or rent things like their homes, cars, and time to other people. There are 2 main types of the modern sharing economy, initiatives, where goods and services are provided for a small subscription or for free, where people are not supposed to gain profit from it, and then there is sharing economy as a business model where a company usually creates a solution where people can sell and buy their services and goods, the company’s goal is to make a profit from it. Some people believe that the only “real” type of sharing economy is the one where the goal is non-profit, this is emphasized as many companies that have created a “sharing platform” definitely have not been sustainable because of their pursuit of profit. But in the world we live in, it is unlikely that many companies will start to offer solutions for free without having the goal of profit, so my question is: Can the sharing economy model when used for profit really makes us more sustainable? In the first part of this essay, I will present an introduction to the sharing economy and sustainability and then explore the different models and examples of the sharing economy, and explore how profitable and sustainable they are. The goal of this essay is to show that the sharing economy can be sustainable and profitable at the same time if the aim is to reduce overconsumption and there are safeguards put in place so that these platforms don’t get abused.  

I. An introduction to the sharing economy and sustainability

The creation, first examples, and evolution of the Sharing economy 

Sharing has evolved alongside humans for centuries, as a tool for survival, so that we could concentrate our efforts on different things but share the benefits of all those things. “Sharing has probably been the basic form of economic distribution in hominid societies for several hundred thousand years. It is based in human biological behaviors… and becomes a powerful force for solidarity between communities” Source. Sharing was necessary for survival, people would share their tools with their neighbors, while not asking for something in return as they knew they would need something from them the next day. As communities started growing, a more “organized” economy started growing towards a community-oriented trading and bartering economy. This was the first kind of peer-to-peer economy, there were very few intermediaries and most goods were just exchanged between people directly. Fast forward to the rise of structured, and organized civilizations which allow people to create with more efficiency, which started replacing traditional peer-to-peer systems, which could not be as abundant as these new types of production. This led to the creation of centralized services, which helps society to get organized for the production and distribution of goods but this abundance economy also gave rise to misallocation and waste. This is why, in the last few years, people have been trying to make this type of economy exist again where underused products can be used by people that need them, especially with the increasing pressure we are feeling from the environmental crisis. Sharing is not a new concept but in recent years, new technologies enable us to rethink how we could share our underused goods. For many people, the first sharing economy platforms would be eBay (Source) which was launched in 1995 as well as craigslist (Source) which was also created during the same year. They both have become huge companies ($33bn valuation for eBay and $3bn for Craigslist) that have succeeded at building big peer-to-peer platforms where people are able to “share” and sell their services and goods. While these platforms are great examples of the first technology-based peer-to-peer solutions, they have not become the best examples of sustainable companies. The growth of eBay and similar platforms pushed people to consume more by buying cheap goods online, on the other hand, craigslist is a better example of a way to locally sell goods and services which are often already used which means they are a great way for people to reuse objects that would otherwise be thrown away. In 2000, Zipcar (Source) was created, the idea is to be able to share a car in the city, for people that just need one once in a while. It was created in Cambridge (MA) by Antje Danielson and Robin Chase with the idea of creating a better way to use cars in cities. They now have more than 1 million users across 500 cities and have a fleet of more than 10,000 vehicles. Other great examples of early Sharing economy platforms include Couchsurfing and Freecycle which managed to create websites where people could share for free their “couch” for people to sleep in while traveling and with Freecycle get rid of your things by giving them away also for free. This already shows that even at the very beginning of the sharing economies, the goal of these platforms was not the same while being put in the same category. Other companies that emerged in the years 2000, are LebonCoin and Airbnb which were created respectively in 2006 and 2008. The media attention and research around the sharing economy started growing between 2011 and 2014 as more and more people got interested in the subject. This coincides with the publication of “What’s Mine is Yours: How collaborative consumption is changing the world” by Botsman and Rogers in 2010  which played a central role in grouping the many companies facilitating peer-to-peer forms of consumption in a single field of innovation. At the time, the word describing this type of peer-to-peer platform was “collaborative consumption” which will mostly be replaced by the term “sharing economy” starting in 2013. The sharing economy now represents a huge variety of companies 

Sustainability, an overconsumption problem

We have reached a point where we urgently need to find solutions to our overconsumption problem. Non-essential goods represent 21% of the material footprint of Europeans, these are all the goods that are the least important to us, like electronics, tools, and luxury items, on the other hand, examples of essential goods are food, housing, and mobility. This article from the Institute for European Environmental Policy (IEEP) underlines the importance of tackling the overconsumption model in order to “ensure that all products and services are safe for consumers and the planet.” Source. They explain that if something is not done in order to make use consume less, the consequences are going to be very problematic. If everyone in the world consumed like Europeans, we would need three Earths to have enough resources. Source. Many of these challenges are being tackled, for example, the European Environmental Bureau (EEB) explains in this article that 77% of Europeans “would rather repair their goods than buy new ones.” Source. This shows the will of many Europeans to better reuse their items instead of throwing them away. Other important numbers are about e-waste (computers, phones, batteries…) which represents 70% of toxic waste in US landfills. Source.  Phones and other electronic devices are hard to recycle, to make a cell phone, 60 different types of metals are needed but only 20 of them are recyclable. This is a huge problem especially when you know that since 2014, the number of active mobile devices surpassed the number of people on Earth. Source. Phones are not the only problem, but they show that we will not be able to give electronic devices to everyone on earth without expecting environmental repercussions. Is there a way to consume less of these products? A lot of the products we use that are recyclable are actually not that recyclable as they will often just be transformed into lower quality products, as we have seen with the phones, we still consume many things that cannot be retransformed easily after their use. This shows the need to create more durable goods that can be repaired and also shared between people to make us more sustainable. 

Different models of the sharing economy and their main arguments. 

There are many models and forms of the sharing economy and each has a similar goal in mind but might operate in different ways. It is not rare that people separate the sharing economy platforms in 2 categories, the for-profit platforms, and the non-profit-driven platforms. This is an important distinction for many people, as it can feel weird to say that you are “sharing” your apartment when you post it on Airbnb for extra money (and on top of that the platform takes a fee), it doesn’t seem like sharing, the term “peer-to-peer” probably fits better in that case, but for marketing purposes “sharing economy” sounds better. On the other hand, many people argue that these platforms do help people to better utilize underused goods and assets which is in a way the goal of the sharing economy. Source. Then you have all the apps and platforms that give access to their services while not trying to gain profits, great examples of this are usually more local, like libraries but sadly there are not many examples of hugely successful non-profit sharing economy platforms (BeWelcomed is one example which is an open-source Couchsurfing). In the paper, “Four models of the sharing economy platforms”, the authors present a way to classify the multiple platforms into 4 categories according to 2 axes. Source. These 4 categories are called “Franchiser,  Principal,  Chaperone, and  Gardener”. The first axis on which they judge the platforms is the “level of control exerted by the platform owner over the platform participants. (loose vs. tight)” Then on the second axis they judge “the intensity of rivalry among the platform participants fostered by the platform owner (low vs. high)”. This creates a 2×2 table that classifies sharing economy platforms, the right side of the table represents the platforms with tight control over their users, for example by creating contracts and heavily controlling who has access to the platform. The difference between the two is the rivalry between the platform’s participants, Franchisers like Uber, are an example of high-rivalry platforms as its price adapts depending on the real-time supply and demand (all users have no choice in pricing), while principals like Handy have low rivalry between participants by letting users set their prices which enables users to present the services they want (and letting people give their services regardless of other users on the platform). On the left side of the table, you the platforms which exert less control over their participants, they let people do their own “listing” as they want. Once again these categories can be split into two parts depending on the rivalry between the participants. Chaperones, like Airbnb, have loose control over the platform but will still recommend prices based on price and demand, and this pushes many users on the supply side to improve their listings in order to stand out. Last, in the left bottom corner, there are gardeners like Couchsurfing or BlaBlacar which both have loose control over the platform and low rivalry between users. Couchsurfing is a great example as it tries to just create a link and trust between people while disincentivizing the use of money between its users. Blablacar also exerts low control on the platform other than basic security information and just acts as a “carpool organizer” where drivers are not allowed to make a profit but can just ask for part of their costs (gas, highway fees, insurance..). These categories are great as they manage to classify in one table very different models while keeping them under the same term. This also gives us an insight into which platforms might actually be more sustainable than others.

II. Is it possible to create a more sustainable world using the sharing economy and be profitable 

The sharing economy has a marketing problem when sharing makes people consume more

Multiple sharing economy platforms define themselves as sustainable, and many researchers agree on the fact that “the collaborative economy is probably a major step towards more sustainable living at the environmental and social level.” Source. But, can the Sharing economy actually make people consume more? This is important because as we have said in other parts of this essay, the sustainability problem is linked to overconsumption, it would be bad for a model that tries to make us more sustainable to actually make us consume more. In 2014, 75% of the French population had bought at least once an item from a peer-to-peer platform. Source. It would seem at first that platforms like eBay, craigslist and Leboncoin enable users to give a second life to things that would otherwise be not used or just thrown away. In the paper “Sustainability of the Sharing Economy in Question: When Second-Hand Peer-to-Peer Platforms Stimulate Indulgent Consumption” Source, the authors argue that P2P platforms that sell second-hand items actually push people to buy more things online, while making the consumer think that they are “saving” the environment. They add “It appears that far from encouraging frugality, these [Peer to Peer platforms] are the ultimate places inducing indulgent consumption.” eBay has more than 1.3 billion active listings on its platform and has 182 million users, while eBay started as a marketplace for used products, the first product sold on the platform was a broken laser pointer, users quickly started using the platform to sell brand new items. In other words, 80% of listings are for brand-new items (that’s around 1 billion listings). Used items do get sold more often than new items, 50% for used and 33% for new but this is a statistic for the whole site, if we look at the US sell-through rates are 56.3% for new items and 39.8% for used items. This shows that the type of buying behavior changes depending on the country. Source. Another platform that is interesting to look at is Airbnb, which has often been criticized for multiple reasons, (helping the creation of illegal hotels, destroying tourist locations, forcing people out of their homes…) the platform has often presented itself as a way for homeowners to share an extra room they have in order to make extra money. In reality, almost 70% of listings on Airbnb (according to an analysis of 5,000 listings in San Francisco) are entire homes or apartments, on top of that around 30% of hosts own multiple listings. This shows that many of these “hosts” seem to be a lot more like old fashion landlords than “collaborative techie sharers.” Source. Uber is another example that needs to be presented, does car sharing reduce traffic thus reducing pollution, or does it increase traffic? Uber has been open about presenting its services as an environmentally friendly alternative to using your car, especially when using the carpool option. Uber has on their website “More people in fewer, more efficient cars can mean less environmental impact per person” Source. But according to a report by the Euromonitor for European research and campaign group Transport & Environment tells us the opposite, the surge of platforms like Uber and Lyft correlates with the surge in air pollution in European cities. The report also shows the increased registration of cars for car-sharing apps, for example, since France opened the “taxi” market in 2015, the number of private hire vehicles (PHV) has doubled in 3 years, from 15,000 in 2016 to 30,000 in 2019. In London, we can see similar data where the number of Uber also doubled during the same period (25,000 to 50,000), which represents half the PHV in the city. Overall, the number of vehicles increased by 26% since Uber arrived in London, “This data strongly correlates with a 23% increase in overall CO2 emissions for the taxi and PHV sector in the UK in the same period,” Source. The report also explains that the CO2 emissions from Uber services “could be as high as half a megatonne of CO2. This is equivalent to adding the CO2 emissions of an extra 250,000 privately owned cars to the road.” Source.

Many sharing economy platforms promote themselves as “green” as most of them argue that their services enable people to have access to underused goods (Uber for cars and Airbnb for empty rooms) but because of the way these platforms are designed, they actually make their users consume more. While it is hard to argue that these platforms are not part of the sharing economy, it is easy to see how they are contributing to overconsumption because of the way they are designed. 

Examples of successful, profitable sharing economy platforms and models that are sustainable

BlaBlacar, Couchsurfing, Fat Llama, Vinted, Spinlister, LeftoverSwap (which doesn’t exist anymore), Turo, and Streetbank are all examples of platforms that help us become more sustainable. Some of them are more profitable than others, but they all manage to connect people to better utilize underused goods. BlaBlacar has been valued at over a billion Euros, but it doesn’t mean they are profitable, it is hard to find how much revenue they are making but estimates are around 88 million euros in 2015. Source. According to a Forbes article (Source), BlaBlacar has 80 million members in 22 countries (2019). At the time the article was published in August 2019, 50 million people had already traveled with the app, which is 2,5x as much as British airway, another great piece of data is that in 2018, Blaclacar has saved 1.6 million tons of CO2 which is more than the entire road emission of a city like Paris. On their website (Source), they add that they also helped save half a million tons of oil (the equivalent of lighting the entire of Los Angeles for 1 year). One of the main reasons BlaBlacar is able to save that much is that they don’t push users to use more their car, they just help people to fill up empty car seats for rides that would be done either way “The average car occupancy rate in Europe is 1.7 people, whereas a car in our community has an average of 2.8 people.” This shows that the sharing economy, when used in a way that truly utilizes underused items, can really be beneficial for the environment. Vinted (Source) is another great example even if they do much less profit (revenue of 14 million in 2018), they are the biggest “pre-loved” fashion marketplace. The Fashion industry is extremely polluting and the app gives the possibility to its users to sell and exchange old clothes they owned. In 2018 they had 4 million monthly active users, the idea on the platform is that you exchange items, where Vinted takes no commission but just acts as an intermediary, or you can sell and buy clothes in which case Vinted takes a small fee. This is a great way to operate the app as they could have forced people only to sell and buy in which case they would make more profit. Street Bank is a great example of a nonprofit sharing economy platform, it works by creating small communities based on your neighborhood where it is then possible to share with your neighbors. This is a much smaller platform (only about 20,000 users) but it follows the true ethos of the sharing economy. Source. Different models of the Sharing economy can also be used by “traditional” companies to be more sustainable. The Product-service system is a model that fits under the “sharing economy” term, it is when a company offers a mix of products and services, for things that usually only be sold as products. Michelin has been used as a case study multiple times to show the product-service system, Michelin started selling kilometers instead of tires. Michelin is the biggest manufacturer of tires in the world with an 18% market share, and in 2000 Michelin stopped only being a tire manufacturer to be a service provider, by doing this they removed the pressure and the upfront costs the truck companies had to endure before. They started to use IoT and sensors in the truck to collect data about “fuel consumption, tire pressure, temperature, speed, and location” Source, by using all this data, they were able to share relevant information with drivers and companies in order to improve fuel consumption, thus costs (“2.1% reduction in the total cost of ownership and 8 tonnes in CO2 emissions” per year). This new model forced Michelin to create better tires that last longer (higher quality products) as they now sell kilometers with services instead of tires. 

Final thoughts and conclusion 

The sharing economy is a great buzzword for many startups and companies to look “green”. As we have seen in the paper, it can have both negative and positive impacts on the environment. Even if it is not in the Ethos of the sharing economy to seek profit, it still is an important thing for many companies and we have seen that it is possible to create a profitable sharing economy platform that is sustainable. It all depends if the company and consumers want to actually be sustainable or just want profits. There is a need for companies to be more transparent about their impact on the environment so that consumers can make better choices. A lot of the success of the sharing economy as being sustainable will come from people’s will to consume less, share freely, and use these digital tools that can help to make our communities better. 

You might have read Fahrenheit 451 for an English class at some point and probably didn’t listen to the teacher’s analysis. You probably remember that it is about a dystopian society where books are burned by firemen that don’t stop fires anymore but start them. It makes us think about the past when books were burned as censorship. Fahrenheit 451 was written in 1953 and was greatly influenced by its time. But I will not talk to you about how Fahrenheit 451 tells us to look at historical events but rather how Fahrenheit 451 teaches us lessons for the future. Social media has put us in our bubble, an unbreakable bubble. We are able to go online and look at our “feed” forever and ever always see things that we like and that we want to see. Those platforms that give us dopamine hits in the brain whenever we share, like, comment, or scroll don’t want you to get upset and leave. And we love it, we love seeing information that is easy to read and that agrees with us, we love imagining that we are learning, and we love being right. We love upsetting others online, but if we stay in our bubble then we will be fine.

The story follows the life of Guy Montag, a fireman who begins to question the status quo and his role in it after meeting his neighbor Clarisse. Montag’s curiosity leads him to secretly read books and eventually he becomes a fugitive hunted by the government’s mechanical hound. 

In Fahrenheit 451 there is this interesting (very long) quote. When Montag asks why books got banned, he gets this answer: 

“Once, books appealed to a few people, here, there, everywhere. They could afford to be different. The world was roomy. But then the world got full of eyes and elbows and mouths. Double, triple, quadruple population […] Books cut shorter. Condensations. Digests. Tabloids. Everything boils down to the gag, the snap ending […] Books, so the damned snobbish critics said, were dishwater. No wonder books stopped selling, the critics said. But the public, knowing what it wanted, spinning happily, let the comic books survive. And the three-dimensional sex-magazines, of course. There you have it, Montag. It didn’t come from the Government down. There was no dictum, no declaration, no censorship, to start with, no! Technology, mass exploitation, and minority pressure carried the trick, thank God. Today, thanks to them, you can stay happy all the time, you are allowed to read comics, the good old confessions, or trade journals […] Coloured people don’t like Little Black Sambo. Burn it. White people don’t feel good about Uncle Tom’s Cabin. Burn it. Someone’s written a book on tobacco and cancer of the lungs? The cigarette people are weeping? Burn the book. […] She didn’t want to know how a thing was done, but why. That can be embarrassing. You ask Why to a lot of things and you wind up very unhappy indeed, if you keep at it. The poor girl’s better off dead”. 

People censor themselves, no one took over. Just everyone in their bubble, in their small minority where everything is accepted. Where people are allowed to create their own truth. Everyone accepted the information that was given to them, staying in their bubble and not confronting what didn’t like. The future described by Ray Bradbury in Fahrenheit 451 becomes a post-technological story where society starts to burn complex knowledge and stories, drowning us in ignorance.

We have to be extremely careful not to censor ourselves in this age where already good information is becoming hard to find, with bad press, social media, and fake news everywhere. Has long political discussion disappeared? Is the future of our democracies at stake with now people tweeting about everything? People don’t read the articles anymore, they read 140 characters titles about news, politics, finance, tech, and books… We don’t take the time to learn anything, we just accept learning many facts by making every issue binary. We don’t take the time to talk and listen, to discuss with our neighbors. We see the United States with the republicans and democrats separated like never before. Everyone seems divided about everything, even about climate change or about the flatness of the earth. We see a community of people online that are so stuck in their bubble that they created their own truth about the shape of the earth. We can’t dismiss the importance of the internet, in the world, connecting people, making the world a better place, giving a voice to people that didn’t have one. Sharing knowledge (hopefully freely and openly) helping to reduce inequalities all around the world. We still see the power of the #blacklivematter and the #metoo movement, they both started online and helped to start a discussion that would have been otherwise difficult. 

During the Egyptian revolution, fueled by social media discussion which led to 3 days of violent protest making the government shut down the internet. This made people go outside and talk to their neighbors, and it decentralized the revolution. There were no centralized meeting points but just people going in the street to talk and discuss, not share and likes online anymore. This led to the most violent day of protest on the 4th day. It was on that night that the revolution started.

How we should be talking together to build and not destroy what others have created. More importantly, we will have to adapt the way we think about democracies, the world is moving fast but our democracies are staying the same. So is the internet bad for democracy? The short answer is that it will be dangerous if we don’t change the way our democracies work. The internet will shape how we think about the future and has been a huge revolution in many fields. It is something that is new and we have to think about how it might affect our future. So go read, touch and look at some books! Take the time to understand, take your time and discuss with others. Open books and go through the pages, you will never lose your time. And if you don’t know which one to read next, you start with Fahrenheit 451.

PS: Here is another good quote from Fahrenheit 451
“You can’t build a house without nails and wood. If you don’t want a house built, hide the nails and wood. If you don’t want a man unhappy politically, don’t give him two sides to a question to worry him; give him one. Better yet, give him none. Let him forget there is such a thing as war. If the government is inefficient, top-heavy, and tax-mad, better it be all those than that people worry over it. Peace, Montag. Give the people contests they win by remembering the words to more popular songs or the names of state capitals or how much corn Iowa grew last year. Cram them full of noncombustible data, chock them so damned full of ‘facts’ they feel stuffed, but absolutely ‘brilliant’ with information. Then they’ll feel they’re thinking, they’ll get a sense of motion without moving. And they’ll be happy, because facts of that sort don’t change.”