This week Forbes released its 2015 billionaires list.  There are 290 new billionaires in the world this year, including Travis Kalanick and Brian Chesky. 

These guys are the founders of Uber and AirBnB, respectively, and they deserve their riches. They saw gaps in the market and filled them with clever concepts that have added value to people’s lives.

When that total value worldwide is added up and converted into the most universal denominator of value that we have – you know – money, it racks up to billions.  

So what do these companies do? 

Friends of mine recently went camping for a weekend and rented out their place to bring in some spare cash. They used AirBnB as a conduit to a market of people wanting to rent an apartment in Wellington for the weekend. 

It more than paid for their camping trip.    
                                         
And Uber is the app you can use to order a ride from A to B, or to offer people rides if you have a car, the ability to drive, and some spare time. Uber and AirBnB work on reputation systems where both the suppliers (e.g. home owners, and drivers) and buyers (e.g. accommodation seekers and those in need of a ride) rate their experiences.

These conduit services enable exchange between distributed buyers and sellers. They are part of what some dub the “sharing economy”. Economists just call it voluntary mutual exchange. And services like AirBnB are good for the environment because they reduce wasted capacity.  Even trusty old TradeMe, another similar services that enables exchange between individual buyers and sellers, extends the life of a product that no longer has value to you, but does to someone else.

It is not uncommon to hear lefties bemoan what they perceive to be the evils of capitalism and market driven economies.  But money is really just a device for communicating that something is of value in world. When money comes your way, it is saying, keep doing what you’re doing.

That the founders of these businesses amassed significant wealth as a result of their opportunism and hard work is not evidence of a failed economic system, but rather vindication that it works.

Accepting a world without capitalism and free markets means accepting a world without new ideas like Uber and AirBnB that solve problems, or even the older stuff people tend to take for granted, like tents for camping trips.