I recently read the article about IKEA renting furtinture instead of selling it. It is sold as a step towards the circular economy and resource efficiency. Products-as-service business models are at the core of the idea of the circular economy, and at first glance, it make sense, specially for tools such as washing machines or cars. However, enthusiasm has gone from this to companies and start ups wanting to rent clothes and furniture. Does it make sense? A purist sustainability advocate may say yes because can be used by many others and their life does not end with one use cycle. Still under debate but feasible.
I am currently working on my PhD in Design focusing on the user perspectives of the circular economy. My research question is how to balance circularity criteria with customer requirements to increase acceptance and adoption. I am part of a network of 15 PhDs working on different issues about the circular economy. During our annual meetings we get to talk and discuss a lot. During one of these meetings, we had Ken Webster from the Ellen MacArthur Foundation visiting. I don't remember what we were talking about specifically, but I remember my colleague Viviann Tunn at TU-Delft asking a simple yet profound question: if everything is going to become a service and people are going to stop owning stuff, what happens when that person loses their income and is unable to make the periodical payments, will companies take away their washing machine, their couch, their cars?
No body had the answer. This question raises a very important topic that has been ignored systematically in the literature on circular economy and in the public discussion: to what extent does the circular economy worsen inequality. In the linear economy, companies owned the means of production and products were transferred to consumers, including their property rights. Workers were able to build their own capital and enjoy the benefits resulting from such capital. In a circular economy, where not only capital goods but consumer goods are owned by businesses, consumers, citizens become even more dependable on businesses which deepens inequality. What power will be left to consumers if they no longer have any property rights? The government? Insurance companies?
These are questions that seem to escape the public conversation about the circular economy and that need to be addressed by governments, civil society and consumer associations. A Netflix service for my furniture and domestic goods doesn't seem like a good idea anymore.
(Originally posted here)