Every corner you turn, there is another nature-loving, compost-making, bike-riding, community-befriending greenie - you know the type - they knit their own yoghurts. 

Perhaps this is because I live in New Zealand's oldest hippie suburb, Aro Valley in Wellington, but it seems the resurgence of green-thinking is not limited to this one neighbourhood.  The percentage of the population giving their party vote to the Greens more than doubled from 5 per cent to 11 per cent between 1999 and 2011. 

Whether it's the government's job to push green solutions is a different argument; these statistics merely point out that increasing numbers of people are seeing environmental and social issues as top priority. 

And the ideas of community and composting are appealing, both intuitively and rationally (our worm-farm juice has done wonders for our plants and saved us a fortune on fertiliser!).  I'm allowed to paint cheeky caricatures of yoghurt-knitting hippies, because I am a sort of one. 

Yet as I learn about the fascinating field of economics in the pro-business, suit-and-tie, think-tank world, and grapple with conflicting ideologies, I'm starting to carve out a space in my mind where these concepts overlap. 

And it is technology that is acting as the conduit between these worlds. The proliferation of peer-to-peer exchange, via the internet, could well be economics working at its finest, and in a way that reduces waste. 

It's perhaps best to start with a concrete example. Recently, a package arrived by courier for a colleague. We all cooed in wonder - which Cue item had she purchased this time? 

But this package was not from Cue but someone in Paraparaumu, who sold said colleague a Cue skirt in perfect nick for $2.50. To drive home the sheer gravity of this deal, it's not uncommon to see a price tag of $250 on similar Cue items. 

Trade Me facilitated the exchange. To this greenie think tank worker, the idea of getting a beautiful made-to-last item of clothing for such a steal is astonishingly awesome. And saving it from the landfill? Even better!  The seller clearly did not value the skirt, for whatever reason. The exchange then was of mutual benefit. That's economics. 

Trade Me of course is not new. Sam Morgan founded the internet auction platform 15 years ago and today's teenagers haven't known a world without it. But since then, platforms to connect individual people to share and exchange products have simply ballooned. 

This peer-to-peer type of economy has been dubbed "collaborative consumption", listed by Time magazine in 2011 as one of the top ten ideas that will change the world. According to my economist colleague, it is jargon that replaces economic concepts like "systems of voluntary exchange" and "spontaneous coordination". 
  
The point is that mutual exchange is neither new nor designed by a beneficent government. Rather, according to Rachel Botsman, author of What's mine is yours: How collaborative consumption is changing the way we live, it is a groundswell. In other words, this so called sharing economy is growing because people, aka the market, desire the value it brings. 

Botsman attributes the increase in collaborative consumption to four drivers. First, the global recession has forced people to economise. Second is a renewed belief in community. Third is environmental concerns, and fourth is the sheer number of peer-to-peer online networks; the internet is the engine behind the blossoming of the sharing economy. 

Last year I used the AirB&B site to connect with individual apartment owners who had spare capacity. In London, the vendor and his girlfriend both owned apartments so it made sense for him to rent his apartment to people like me, who needed accommodation in their area.  Zipcar in the US, which enables consumers to book use of a private car for a couple of hours at a time. All of these sites allow buyers and sellers to share capacity that otherwise sits idly, and extends the economic life of the product. 

And in New Zealand, a new idea has popped up that taps into this sharing economy. Muka Kids is the brainchild of Wellingtonian Jessica Berentson-Shaw. 

The concept is elegant. Clothes are designed in New Zealand and made in India with fair trade, organic cotton under independently audited ethical conditions. When kids outgrow the clothes, they can be handed down, or 'regooded' back to Muka which resells the clothes. Completing the virtuous cycle, some of Muka Kids' profits will then go back to India to fund microloans for women in business in India. 

Berentson-Shaw says she was "brought to the edge of crazy by the experience of buying childrenswear; rubbish, cheaply made, kidswear" for her children. Many of us feel that guilt when we purchase something cheaply made to save money, and kids grow out of clothes so fast. But cost doesn't quite justify the kind of quality that pleases aesthetic desire and assuages ethical guilt. 

Muka Kids means that the value that went into making the product can be shared between many, making it more affordable. Regifting, regooding, hand-me-downing, whatever you want to call it, is not new, but technology is enabling this area to grow.  And commiserate with the style of connecting crowd power via the Internet, Berentson-Shaw plans to use crowd funding to get Muka Kids going. 

Botsman says that collaborative consumption is second nature to millennials who "are moving from a culture of 'me' to 'we'". This implies that people are looking out for others as well in their economic exchange. I disagree. The 'we' part is the outcome rather than the intent. 

Adam Smith put it best: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from regard to their own self-interest", and that the 'invisible hand' would lead people "to do not just what is good for them but their neighbours as well".  In other words, when people to act in economically self-interested ways, the community at large benefits. 

"We're sharing in a way that's more hip than hippie", says Botsman. But we're also sharing in a way that is making economising hip again. 

Source: Where greenies meet economists