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The Tragedy of The Commons | How to avoid it?

In the manors of feudal England there were some constituent lands that were available for shared use. One of the types of these common lands were common pastures. The commoners were not their owners, but by tradition they had the right to graze livestock upon them. Over time, the extent of common pastures shrank due to the process of enclosures. However, one could see a vast difference between commons and private lands.

In 1833 British economist William Forster Lloyd asked: Why are the cattle on a common so puny and stunted? Why is the common itself so bare-worn? Why is it cropped so differently from the private lands?

Imagine two pasture lands of the same size. One is a common pasture that is used by ten peasants, and the other is divided into ten identical lots, each used as a private pasture by one of ten different owners. Both pasture lands can feed up to fifty cattle in a year before being unable to regenerate crops. Five cattle can be grazed upon each of the identical private lots. Private owners would like to graze more cattle per year upon their lots, but they know that if they would, there is a high risk that it would make their lots barren, such that no cow could be grazed upon them in the next year. The benefits of using the pastures for many years were higher than a one-off profit from allowing more cattle to graze upon them.

Commoners who used the common pasture were no less competent. They also knew that no more than fifty cattle at a time should graze upon the common pasture. As long as there were fewer than fifty cattle grazing upon the common pasture, everything was fine. The cattle population grew, however, and at first the limit was reached, and then exceeded.

One of the commoners — called Gilbert — thought to himself: “So far, each of us has been grazing five cows upon the pasture, but now I have more cattle! Grazing another cow is a risk, because the pasture could turn barren. I should not do it then.” Unfortunately, the commoners were influenced by different incentives than those affecting private lot owners. Gilbert was worried: “How can I be sure that another commoner will not graze an extra cow? In such a case I will not be able to use the pasture next year, as it will be barren, and at the same time my sixth cow will be less fed this year! If I do the right thing by not grazing the extra cow, not only will I not save the pasture for the next year, but at the same time I will save it for someone else this year. That is why I decided to bring an extra cow to the pasture.” And so he did. Gilbert’s action marked a simple regularity. The cow is his private property, so the more of his cattle that graze on the pasture, the better it is for him. The pasture, however, is common property. This is why all potential losses will be shared by everyone. And since Gilbert’s private profit will probably outweigh his share in the shared loss, it definitely pays off for him to graze the next cow. And he should do it quickly, before someone else comes up with the idea. In fact, others did come up with the same idea, and did graze more cattle than the land could sustain. As a result, nature’s supply for the ever-increasing consumption became unsustainable; the pasture turned barren and was taken over by weeds inedible for animals. The cows became “puny and stunted”, ceased to give milk, and finally died. By acting in their own self-interest, the commoners worked not only tofor the detriment of others, but also for to their own detriment in the longer term. To put it simply, they were cutting the branch they were sitting on.

In 1968 Professor of Human Ecology Garrett Hardin put the subject back into spotlight with his article “The Tragedy of The Commons.”1

By recalling Lloyd’s work, Hardin delineated the issue of the tragedy of the commons, which consists in the fact that when people have free access to a shared resource, by acting rationally in their own self-interest they cause the rest of society and themselves to suffer losses in the long run. This is because the institution of common property motivates people to abuse resources and at the same time to neglect their maintenance and renewal.

He notes: “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.”

Let us try to pinpoint the root cause of the problem. Up to a certain point the common resources are so abundant that anyone can use them freely without any adverse effects. For example, a pasture that can feed fifty cattle will not be made barren by three cattle even if feeding is all they do. A single angler cannot hope to catch out all the fish in a large lake, just as a small group of inhabitants of the Great Plains will not contribute to the decline of the American bison population.

There is a turning point, however, at which nature cannot possibly restore such resources. A pasture, for instance, can only feed a certain number of animals during a given time. A lake can only sustain a certain number of fishermen and anglers each year before its fish population starts to diminish. And there is no such thing as an infinite bison supply on the Great Plains.

At some point the increase in the number of animals, fishermen, anglers, or hunters causes the lands to suffer from overcrowding. Freedom of access to the common resources promotes a tendency for their excessive use and for neglect in their maintenance and renewal.
One contemporary example of the tragedy of the commons is high seas. According to the law everyone has equal access to these waters, for example everyone has the right to fish in the high seas.2

Given constant rise of population, modernization of fishing techniques, and other factors, nature just cannot sustain its output. The eponymous tragedy consists in the fact that the law encourages fishermen to catch as much fish as possible. In doing so, the law drives fishermen to catch unsustainable amounts of fish and thus to damage aquatic resources, instead of encouraging them to care aboutfor keeping the fish population at suitable levels.

Are there any ways to avoid the tragedy of the commons?

Yes, but there is no single universal cure that will work in all conditions3.

We can, instead, denote three general groups of solutions. Hardin suggested two of them:

  1. creating and selling property rights to scarce resources, which allows for a change in incentives and for exclusion of others from the use of said resources

and

  1. top-down regulations of the right to enter areas endowed with such resources.

Later research — by Nobel Laureate Elinor Ostrom, among others — has shown, however, that there is one more group of solutions, namely

  1. bottom-up institutions. There are examples that show under the right conditions, some communities were able to establish rules that allowed for a long-term and sustainable use of shared resources. Contrary to what has been implied by Hardin’s work, people using a common resource are not necessarily condemned to repeat the tragedy of the commons. They can talk things through and create adequate institutions.

Effective management of shared resources gets easier as more of the following conditions are met4:
– it is easy to monitor resources and their use, and the information thus gathered can be verified and understood at relatively low cost
– rates of change in resources, resource-user populations, technology, and economic and social conditions are moderate
– communities maintain frequent personal communication and dense social networks that promote mutual trust and encourage greater respect for established rules
– the community can exclude outsiders at relatively low cost from using the common resource
– and resource users support effective monitoring and rule enforcement.

We will endeavor to describe specific examples of such solutions and their effects in one of our next videos.
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2018-07-23T19:33:58+00:00