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Economic Meaning Of The Tragedy Of The Commons Essay

In 1974 the general public got a graphic illustration of the “tragedy of the commons” in satellite photos of the earth. Pictures of northern Africa showed an irregular dark patch 390 square miles in area. Ground-level investigation revealed a fenced area inside of which there was plenty of grass. Outside, the ground cover had been devastated.

The explanation was simple. The fenced area was private property, subdivided into five portions. Each year the owners moved their animals to a new section. Fallow periods of four years gave the pastures time to recover from the grazing. The owners did this because they had an incentive to take care of their land. But no one owned the land outside the ranch. It was open to nomads and their herds. Though knowing nothing of Karl Marx, the herdsmen followed his famous advice of 1875: “To each according to his needs.” Their needs were uncontrolled and grew with the increase in the number of animals. But supply was governed by nature and decreased drastically during the drought of the early 1970s. The herds exceeded the natural “carrying capacity” of their environment, soil was compacted and eroded, and “weedy” plants, unfit for cattle consumption, replaced good plants. Many cattle died, and so did humans.

The rational explanation for such ruin was given more than 170 years ago. In 1832 William Forster Lloyd, a political economist at Oxford University, looking at the recurring devastation of common (i.e., not privately owned) pastures in England, asked: “Why are the cattle on a common so puny and stunted? Why is the common itself so bare-worn, and cropped so differently from the adjoining inclosures?”

Lloyd’s answer assumed that each human exploiter of the common was guided by self-interest. At the point when the carrying capacity of the commons was fully reached, a herdsman might ask himself, “Should I add another animal to my herd?” Because the herdsman owned his animals, the gain of so doing would come solely to him. But the loss incurred by overloading the pasture would be “commonized” among all the herdsmen. Because the privatized gain would exceed his share of the commonized loss, a self-seeking herdsman would add another animal to his herd. And another. And reasoning in the same way, so would all the other herdsmen. Ultimately, the common property would be ruined.

Even when herdsmen understand the long-run consequences of their actions, they generally are powerless to prevent such damage without some coercive means of controlling the actions of each individual. Idealists may appeal to individuals caught in such a system, asking them to let the long-term effects govern their actions. But each individual must first survive in the short run. If all decision makers were unselfish and idealistic calculators, a distribution governed by the rule “to each according to his needs” might work. But such is not our world. As James Madison said in 1788, “If men were angels, no Government would be necessary” (Federalist, no. 51). That is, if all men were angels. But in a world in which all resources are limited, a single nonangel in the commons spoils the environment for all.

The spoilage process comes in two stages. First, the non-angel gains from his “competitive advantage” (pursuing his own interest at the expense of others) over the angels. Then, as the once noble angels realize that they are losing out, some of them renounce their angelic behavior. They try to get their share out of the commons before competitors do. In other words, every workable distribution system must meet the challenge of human self-interest. An unmanaged commons in a world of limited material wealth and unlimited desires inevitably ends in ruin. Inevitability justifies the epithet “tragedy,” which I introduced in 1968.

Whenever a distribution system malfunctions, we should be on the lookout for some sort of commons. Fish populations in the oceans have been decimated because people have interpreted the “freedom of the seas” to include an unlimited right to fish them. The fish were, in effect, a commons. In the 1970s, nations began to assert their sole right to fish out to two hundred miles from shore (instead of the traditional three miles). But these exclusive rights did not eliminate the problem of the commons. They merely restricted the commons to individual nations. Each nation still has the problem of allocating fishing rights among its own people on a noncommonized basis. If each government allowed ownership of fish within a given area, so that an owner could sue those who encroach on his fish, owners would have an incentive to refrain from overfishing. But governments do not do that. Instead, they often estimate the maximum sustainable yield and then restrict fishing either to a fixed number of days or to a fixed aggregate catch. Both systems result in a vast overinvestment in fishing boats and equipment as individual fishermen compete to catch fish quickly.

Some of the common pastures of old England were protected from ruin by the tradition of stinting—limiting each herdsman to a fixed number of animals (not necessarily the same for all). Such cases are spoken of as “managed commons,” which is the logical equivalent of socialism. Viewed this way, socialism may be good or bad, depending on the quality of the management. As with all things human, there is no guarantee of permanent excellence. The old Roman warning must be kept constantly in mind: Quis custodiet ipsos custodes? (Who shall watch the watchers themselves?)

Under special circumstances even an unmanaged commons may work well. The principal requirement is that there be no scarcity of goods. Early frontiersmen in the American colonies killed as much game as they wanted without endangering the supply, the multiplication of which kept pace with their needs. But as the human population grew larger, hunting and trapping had to be managed. Thus, the ratio of supply to demand is critical.

The scale of the commons (the number of people using it) also is important, as an examination of Hutterite communities reveals. These devoutly religious people in the northwestern United States live by Marx’s formula: “From each according to his ability, to each according to his needs.” (They give no credit to Marx, however; similar language can be found several places in the Bible.) At first glance Hutterite colonies appear to be truly unmanaged commons. But appearances are deceiving. The number of people included in the decision unit is crucial. As the size of a colony approaches 150, individual Hutterites begin to undercontribute from their abilities and overdemand for their needs. The experience of Hutterite communities indicates that below 150 people, the distribution system can be managed by shame; above that approximate number, shame loses its effectiveness.

If any group could make a commonistic system work, an earnest religious community like the Hutterites should be able to. But numbers are the nemesis. In Madison’s terms, nonangelic members then corrupt the angelic. Whenever size alters the properties of a system, engineers speak of a “scale effect.” A scale effect, based on human psychology, limits the workability of commonistic systems.

Even when the shortcomings of the commons are understood, areas remain in which reform is difficult. No one owns the Earth’s atmosphere. Therefore, it is treated as a common dump into which everyone may discharge wastes. Among the unwanted consequences of this behavior are acid rain, the greenhouse effect, and the erosion of the Earth’s protective ozone layer. Industries and even nations are apt to regard the cleansing of industrial discharges as prohibitively expensive. The oceans are also treated as a common dump. Yet continuing to defend the freedom to pollute will ultimately lead to ruin for all. Nations are just beginning to evolve controls to limit this damage.

The tragedy of the commons also arose in the savings and loan (S&L) crisis. The federal government created this tragedy by forming the Federal Savings and Loan Insurance Corporation (FSLIC). The FSLIC relieved S&L depositors of worry about their money by guaranteeing that it would use taxpayers’ money to repay them if an S&L went broke. In effect, the government made the taxpayers’ money into a commons that S&Ls and their depositors could exploit. S&Ls had the incentive to make overly risky investments, and depositors did not have to care because they did not bear the cost. This, combined with faltering federal surveillance of the S&Ls, led to widespread failures. The losses were “commonized” among the nation’s taxpayers, with serious consequences to the federal budget (see savings and loan crisis).

Congestion on public roads that do not charge tolls is another example of a government-created tragedy of the commons. If roads were privately owned, owners would charge tolls and people would take the toll into account in deciding whether to use them. Owners of private roads would probably also engage in what is called peak-load pricing, charging higher prices during times of peak demand and lower prices at other times. But because governments own roads that they finance with tax dollars, they normally do not charge tolls. The government makes roads into a commons. The result is congestion.

About the Author

The late Garrett Hardin was professor emeritus of human ecology at the University of California at Santa Barbara. He died in 2003.

Further Reading

Berkes, Fikret. Common Property Resources. London: Belhaven Press, 1989.

Hardin, Garrett. Filters Against Folly. New York: Viking-Penguin, 1985.

Hardin, Garrett. “Living on a Lifeboat.” BioScience 24 (1974): 561–568.

Hardin, Garrett. “The Tragedy of the Commons.” Science 162 (1968): 1243–1248.

Hardin, Garrett, and John Baden, eds. Managing the Commons. San Francisco: W. H. Freeman, 1977.

Hiatt, Howard H. America’s Health in the Balance. New York: Harper and Row, 1987.

McCay, Bonnie J., and James M. Acheson, eds. The Question of the Commons. Tucson: University of Arizona Press, 1987.

McGoodwin, James R. Crisis in the World’s Fisheries. Stanford: Stanford University Press, 1990.

Ostrom, Elinor. Governing the Commons. New York: Cambridge University Press, 1990.

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What is the 'Tragedy Of The Commons'

The tragedy of the commons is an economic problem in which every individual tries to reap the greatest benefit from a given resource. As the demand for the resource overwhelms the supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits. Generally, the resource of interest is easily available to all individuals; the tragedy of the commons occurs when individuals neglect the well-being of society in the pursuit of personal gain.

BREAKING DOWN 'Tragedy Of The Commons'

The tragedy of the commons is a very real economic issue where individuals tend to exploit shared resources so the demand greatly outweighs supply, and the resource becomes unavailable for the whole. Garrett Hardin, an evolutionary biologist by education, wrote a scientific paper titled "The Tragedy of the Commons" in the peer-reviewed journal Science in 1968. The paper addressed the growing concern of overpopulation, and Hardin used an example of grazing land when describing the adverse effects of overpopulation.

Common grazing lands yield adequate food for herd animals as long as the number of grazing animals is limited from natural population control such as disease. If, however, the natural controls are circumvented or do not come to pass, the population of herd animals increases and the grazing land is unable to support the larger population. Hardin's point was if humans faced the same issue as in the example with herd animals, each person would act in his own self interest and consume as much of the scarce resource as possible, making the resource even harder to find.

Real Examples of The Tragedy of the Commons

The Grand Banks fisheries off the coast of Newfoundland is a prime example of the tragedy of the commons. For hundreds of years, fishermen in the area believed the fishing grounds to be abound with cod fish. For centuries, the fisheries supported all the cod fishing necessary. However, in the 1960s, advancements in fishing technology made it so fishermen could catch comparatively massive amounts of cod fish. Fishermen started competing with each other to catch increasingly larger amounts of cod, and by 1990, the population of cod fish in the region was so low, the entire industry collapsed.

The Gulf of Mexico dead zone is another example of squandered resources by the tragedy of the commons. The Mississippi River is extremely fertile, and thousands of farmers flocked to the area, over-fertilizing the river and its tributaries. The rain from the winter months washed the nutrients and chemicals from the fertilizer downstream to the Gulf of Mexico, creating a dead zone where no life can be sustained. The dead zone occurred as a direct result of over-farming an area with historically high yield.