Rajeev Ahuja
OWNERSHIP of objects is increasingly becoming less important in today's world. It is the "use" value that is fast replacing the "ownership" value.
For example, it doesn't matter whether or not a person owns a computer as long as one has assured access to it; similarly, it doesn't matter whether or not a person owns a car as long as one can access its services. Long back someone, expressing futility of owning a house, remarked -— fools build houses and wise live in them.
A society that is tending to value usership over ownership is also aiding the disposable or "throw-away" culture where you dispose of or discard an object after its use.
This also goes well with the society that prefers flexibility, wants to keep the option of changing one's mind later open. That people are beginning to take notice of this is reflected in their attitudinal shift away from "owning" and towards the "use" value of objects. What has brought about this shift?
Spread of education and greater awareness, of course, has contributed towards this shift; hectic pace of life may have made people more practical and rational. Besides, there are other factors that have contributed towards this changing attitude.
First, blistering pace of technology is pervading all spheres, and not just the IT. Try owning an object today and you run the risk of owning an outdated model within a short time span when the scrap value of the object becomes negligible.
You may have carefully handled the object, but it is the vintage that would define its scrap value and not on how delicately you've used it.
Second, buying an object or an article ties a person to the article. This tends to make a person immobile. Opportunities may be galore in this globalised economy but these opportunities are also scattered and have to be sought.
Seeking such opportunities can take you anywhere in the world. So, you have to be light to be able to move to places far and wide. So renting in an object, rather than buying it, frees you from the encumbrance of finding its buyer when you change places.
Third, typically, buying an object is more expensive than renting. So, in buying one has to exercise greater care, compare several options, weighs benefits against its costs.
Even after that, there is veritable danger of making an incorrect choice that cannot be easily undone. Even when you make a correct choice, there is a risk of the after sales service not forthcoming when you need it most. In all these aspects renting scores over owning an object.
Fourth, one's social prestige and status that was earlier defined by the owning of objects, is now getting defined in terms of one's accessibility to, and usability of, objects. To those on the move the idea of social prestige doesn't mean much anyway.
And those at low-income end, the urge to "buy" objects might have been a natural response to the easing of their budget constraint. Now with a general increase in economic well being this urge may then have diminished.
Finally, when obsolescence is high, and is defined in terms of time, efficient use of the object requires that the object be used intensively. Owning an object may then be inefficient if one cannot intensively use the object.
This throws up the possibility of sharing an object or a facility with others. While technology is becoming more and more personalised, the efficient use of it demands that there be a well develop rental market for such durable objects.
Hence, the need for having an efficient and well functioning markets for second hand goods and rental markets. That would in turn give a fillip to this trend towards preference for usership over ownership.
George Akerlof, who shares this years noble prize in economics with two others, showed in his seminal paper that market for "lemons" (that is, of second hand cars) tend to be inefficient due to informational asymmetries. What is true of second hand cars is also true of other second hand durable goods such as computers.
Of course, markets tend throws up devices that tend to correct for informational asymmetries such as warranty, buy back option and so forth.
In countries like India weak enforcement of contracts, lack of consumer awareness and absence of strong consumer movement require that government play a definite role in the development of second hand goods market. (The writer is a fellow at ICRIER, New Delhi)
===== Kevin Dean Buffalo, NY ICQ: 8616001 http://www.yaysoft.com
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