Friday, November 19, 2004

The Failure of the Commons

"The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy.

As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, "What is the utility to me of adding one more animal to my herd?" This utility has one negative and one positive component:
  1. The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1.
  2. The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effect of overgrazing is shared by all the herdsmen, while the negative utility for any particular decision-making herdsman is only a fraction of -1.

Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another.... But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all (Hardin, 1968).


The lessons of the Tragedy of the Commons have been learnt many times over the millennia, but apparently have been forgotten as often. According to Hardin (1968), such tragedies have been repeated over the course of the human history. This is because human beings had suffered from a natural tendency of psychological denial as individuals continued to try to gain the maximum individual benefits at the cost to the society, whose sufferings extended to the individuals concerned. One of the solutions for Hardin is through education whereby such awareness and knowledge about the Tragedy of the Commons gets refreshed by generation after generation so that such wrong doings are to be avoided (Hardin, 1968). In conclusion, Hardin stresses that freedom in the commons brings ruin to all and the only solution is "mutual coercion, mutually agreed upon."(Hardin, 1968; 1992).


Interestingly (from a research point of view), for Hardin, the notion of the Tragedy of the Commons can be generalised and applied in a wide range of spheres in our life. Where he has suggested that such a notion may be used to enlighten a class of human problems which can be called "no technical solution problems"(Hardin, 1968). One member of this class of problems is the pollution problem. As Hardin puts it:


'In a reverse way, the Tragedy of the Commons reappears in problems of pollution. Here it is not a question of taking something out of the commons, but of putting something in—sewage, or chemical, radioactive, and heat wastes into water; noxious and dangerous fumes into the air; and distracting and unpleasant advertising signs into the line of sight. The calculations of utility are much the same as before. The rational man finds that his share of the cost of the wastes he discharges into the commons is less than the cost of purifying his wastes before releasing them. Since this is true for everyone, we are locked into a system of "fouling our own nest," so long as we behave only as independent, rational, free-enterprisers.'


The Tragedy of the Commons as a food basket is averted by private property, or something formally like it. But the air and waters surrounding us cannot readily be fenced, and so the Tragedy of the Commons as a cesspool must be prevented by different means, by coercive laws or taxing devices that make it cheaper for the polluter to treat his pollutants than to discharge them untreated. We have not progressed as far with the solution of this problem as we have with the first. Indeed, our particular concept of private property, which deters us from exhausting the positive resources of the earth, favours pollution. The owner of a factory on the bank of a stream—whose property extends to the middle of the stream—often has difficulty seeing why it is not his natural right to muddy the waters flowing past his door. The law, always behind the times, requires elaborate stitching and fitting to adapt it to this newly perceived aspect of the commons (Hardin, 1968). "


A selection from Dr. Jin's thesis. Complete document found at

http://www.geocities.com/sonicjin/newthesis.doc


5 Comments:

Blogger Paul Schumann said...

Law, Custom, and the Commons

by Randy T. Simmons

Dr. Simmons heads the political science department of Utah State University and is a senior associate of PERC (Political Economy Research Center) in Bozeman, Montana.

"Free and unregulated access to scarce resources has long been recognized as a serious problem. Two thousand years ago Aristotle wrote: What belongs in common to the most people is accorded the least care: they take thought for their own things above all.[1] More recently, the biologist and human ecologist Garrett Hardin argued: Ruin is the destination toward which all men rush, each pursuing his own best interest in a society which believes in the freedom of the commons. Freedom in a commons brings ruin to all.

Fortunately, however, there are ways to avoid such ruin.

Hardin used an example of a pasture to illustrate how the commons can produce tragedy. As long as grazing on the commonly owned pasture is below carrying capacity, each herdsman may add another cow without harming any cows—they all still have enough to eat. But once carrying capacity is reached, adding the additional cow has negative consequences for all users of the common pasture.

The rational herdsman faced with adding the extra cow calculates his share of the benefits of an additional cow. It is 100 percent. He also calculates his share of the cost. It is 1/n herdsmen; that is, it is the cost divided by the number of herdsmen. So he adds another cow. And another . . . as do all the other herdsmen. Each may care for what is common but can do nothing about it, since one person exercising restraint only assures himself a smaller herd, not a stable, preserved commons.

Thus, the commons is a trap—an individual acting in his self-interest makes himself, along with everyone else, worse off in the long run. Yet acting in the group interest cannot stop the inevitable ruin.

If the commons inevitably leads to tragedy, humans should have killed themselves off thousands of years ago. Instead, people developed ways of making individuals responsible for their own actions.

Responsibility is created by moving people out of a system of open access and creating rights of access and use. Creating such use-rights, therefore, means that a resource is no longer everybody’s property. But use-rights are meaningless unless they are protected or enforced with some degree of legal or customary agreement.

The most effective system of responsibility is private property rights because owners are responsible for their own costs and benefits. If you degrade your own property, you suffer the consequences because your wealth is reduced. If, instead, you improve the property, your wealth is increased. You capture the benefits of your actions and pay the costs of them as well. The only exception is when you create costs to others by what you do on your own property, such as damming a stream or polluting the air. Legal institutions not only protect people’s rights to do what they want with their property but also protect the rights of others (third parties) to be free from harm caused by others. "

Complete document found at http://www.fee.org/vnews.php?nid=3690

12:12 PM  
Blogger Paul Schumann said...

Conceptualizing a Commons"Conceptualizing a boundary between private property and unincorporated terrain, creating an analytical space defined by collective use rights as a "commons," has certain attractive theoretical features. A powerful paradigm for explaining decay in the natural properties of such a bounded terrain has emerged in the notion of "the tragedy of the commons" (eg., Hardin, 1968; cf. Ostrom, 1986; Shiva, 1986). The "tragedy" of the commons is only a part of the puzzle surrounding the commons. In particular, it is important to distinguish between commons situations and commons dilemmas. In Robert Wade's formulation (1988:184):

'The exploitation of a common-pool resource is always a commons situation, in the sense that any resource characterized by joint use and subtractive benefits is potentially subject to crowding, depletion and degradation. But only some commons situations become commons dilemmas: those where joint use and subtractive benefits are combined with scarcity, and where in consequence joint users start to interfere with each other's use.'

The original tragedy paradigm pictured not a failure of common property institutions but rather a failure to preserve common pool resources precisely because no common property arrangements to limit use evolved.

The Commons and Its "Tragedy" As Analytical Framework

Ronald Herring

http://www.smartoffice.com/tiger/id32.htm

12:17 PM  
Blogger Paul Schumann said...

The Tragedy of the Electronic Commons"When two attorneys enraged millions of Internet users by publishing identical advertisements on six thousand unique network discussions known as "newsgroups," they were attacking a tradition of cooperation. Now the same attorneys are flogging a book and trying to convince readers of op-ed articles that they have been the victims of elitist attacks by Internet intellectuals who oppose honest business on the Net. Citizens on and off the Internet need to understand exactly how these hucksters are trying to deceive us, before we lose a precious resource.

For many people, these thousands of newsgroups have constituted a worldwide, multimillion member, collective thinktank, available twenty-four hours a day to answer any question from the trivial to the scholarly. If you have a question about sports statistics, scientific knowledge, technical lore -- anything -- someone has the answer. This magical knowledge-multiplying quality comes from the voluntary effort of many people who freely contribute expertise. That power of a large group of people to act as a thinktank for each other is vulnerable to misuse. A small number of malefactors can mess up a good thing for a large number of cooperative citizens."

Later in the blog...

"The lawyers' actions conveyed the message that their personal commercial ambitions were more important than the value of the commons. And that is the message they have been preaching -- get yours while you can, and ignore the protests of those who value the online culture of information-sharing. If these carpetbaggers prove successful, will others follow? How far can a network of cooperative agreements be pushed by the self-interest of individuals before it loses its value? When a flood of irrelevant announcements swamps newsgroups and mailing lists, what will happen to the support networks for cancer patients and Alzheimers' caregivers?"

The Tragedy of the Electronic Commons, Howard Rheingold, http://www.well.com/user/hlr/tomorrow/tomorrowcommons.html

9:37 AM  
Blogger Paul Schumann said...

The Tragedy of the Commons"Maslow's hierarchy is not magical but it describes the needs of human beings, and by extension of communities and nations. In a rational world, we might use it as a foundation for our national economic policy.

A nation guided by the hierarchy might or might not have a high numerical GNP but it would have real wealth and prosperity. If we assume that the function of an economy is to serve people, that is a reasonable goal.
But like any other system, an economy based on Maslow's hierarchy would have to cope with the problem generally known as 'the tragedy of the commons'.

Traditional English villages had a field called the "commons" where villagers were free to graze sheep or cattle. The capacity of the field was obviously limited but there was no way to limit the grazing rights of any individual citizen.

If the field was over-grazed all would lose, but if any one villager reduced the number of his animals on the field he would lose personally. Because each individual stood to gain more by grazing as many animals as possible for as long as the field lasted, most commons were over-grazed and ruined.

In the modern version of the same problem it makes sense for me to buy imported goods rather than Canadian if the imports are cheaper, and if I will buy imports it makes sense for a merchant to sell them. We both know that our decision will put Canadians out of work but we think that we, personally, will gain more than we will lose.

A lawyer may know that the lawsuit he prepares is unjust and that it may cause harm to the economy, but he also knows that he will be well paid for his work. A union leader may know that his members will lose more than they can gain by a strike, but he also knows that he will profit from it. A politician may know that by selling his influence he harms the country, but he also knows that he can make a great deal of money.

This kind of self-interest is not surprising because all the roles we speak of here are male roles, even if they are sometimes filled by women. The one thing that nearly all male animals have in common is that they don't cooperate with each other.

A pride of lions usually consists of one male, several females and some cubs fathered by the male. When another male takes over the pride he kills all the old male's cubs. When a male cub grows up, it is driven out of the pride.

Small herds of grazing animals consist of one herd bull, his females and their young. Younger bulls may be tolerated in some herds, but only on condition that they don't act like bulls.

But human males co-operate. We can only guess at the reason but we can be fairly certain of our guesses. Over time all types of behavior appear, and the ones that work best survive because the people who adopt that type of behavior survive and breed. They don't have to understand what they are doing; they just do it and live or die by their actions.

Some time so far back in history that they were not even recognizable as early apes, let alone men, our ancestors learned to co-operate. Like some other animals they learned that if they traveled in groups they were less vulnerable to predators. Probably later they learned that if they hunted in groups, they could become predators themselves. Other animals did the same."

The Cassandra Papers, Andy Turnbell, http://webhome.idiret.com/~andyt/index.html. This chapter of the online book is at http://webhome.idirect.com/~andyt/commons.html.

9:40 AM  
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10:54 PM  

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