The Tragedy of the Commons

In Medieval England tenants could freely use a lord's uncultivated land as pasture for their livestock. This land was referred to as the "commons" because the common people used it, and their right to use it became known as the "freedom of the commons." For a time this setup worked fine, but as England's rural population began to rise in the 18th century, the commons became overgrazed, which led to its destruction and the economic ruin of livestock owners.

To understand why, we need to recognize the fact that each livestock owner is almost always faced with the decision as to whether or not to add more animals to their herd. More animals mean more is produced, but it also means that higher demands will be placed on the commons in order to feed the animals. However, this cost will be borne by all of the livestock owners using the commons. Thus, because individual livestock owners will receive all of the profits from adding to their herd but only incur a portion of the cost for doing so, they will almost always choose to increase the size of their herd when they can. Unfortunately, since this conclusion will be arrived at by all (or at least, almost all) livestock owners, ultimately too many animals are turned loose on the commons, and it becomes overgrazed. Even as the land's productivity declines, it's still in the best interest of individual livestock owners to add to their herd. They were still "better off with more animals, no matter how skinny, than with a smaller number of equally skinny livestock" (Stark, Sociology, 10th edition, p. 416).

This phenomenon was first documented in 1833 by an English mathematician, William Lloyd, but it was popularized Garrett Hardin in his seminal 1968 article, "The Tragedy of the Commons," which appeared in Science magazine. Hardin ultimately concluded that there were only two solutions to the tragedy: (1) a highly centralized government that controlled access to the commons or (2) the right to private property. The former is somewhat akin to Thomas Hobbes's "Leviathan" solution to the problem of order, while the latter is reminiscent of the invisible hand of Adam Smith's free market. Unsurprisingly, folks on the political left tend to favor more government control of the commons, while those on the political right tend to embrace the right to private property.

However, more recent research, in particular that of political scientist Elinor Ostrom, has demonstrated that other solutions exist. Ostrom's study of common-pool resource (CPR) groups found that groups can avoid the tragedy of the commons without resorting to top-down regulation or privatization if certain conditions are met ("Elinor Ostrom's 8 Principles For Managing a Commons"):

1. Define clear group boundaries
2. Match rules governing use of common goods to local needs and conditions
3. Ensure that those affected by the rules can participate in modifying the rules
4. Make sure the rule-making rights of community members are respected by outside authorities
5. Develop a system, carried out by community members, for monitoring members’ behavior
6. Use graduated sanctions for rule violators
7. Provide accessible, low-cost means for dispute resolution
8. Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system

I intend to explore these principles in more depth in a subsequent post, but for now it is suffice to note that Ostrom's work was so influential that she was awarded the Nobel Prize in economics in 2009. Those who are interested can view here prize lecture at the Nobel site: https://www.nobelprize.org/mediaplayer/index.php?id=1223