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Tragedy of the Commons

© Frank Monaldo

In 1968, Garret Hardin wrote an article in Science that popularized term ``Tragedy of the Commons.'' The phrase refers to the over exploitation of shared resources. Imagine a common pasture for livestock shared by a community of herdsman. Use of the pasture is free to all. Each individual herdsman gains the entire benefit of any of his livestock in the pasture. Since the costs imposed on the pasture are shared among all the herdsman, it is always to the immediate benefit of a herdsman to add an additional animal to the herd. This may continue for generations until the pasture collapses under the load.

The analogy applies to situations as disparate as shared computing power, network bandwidth and highways. Hardin used the tragedy of the commons to argue that the United Nations' specific guarantee of reproductive freedom should be repealed so that measures could be taken to limit global population.

The logic of the tragedy of the commons is inexorable. Fortunately, the solution, at least in the case of pasture land, is simple. Fence the pasture into separate lots for each herdsman. Each herdsman now gains the benefit of each new animal, but also pays full price in potential overgrazing. It is to the advantage of each herdsman to maintain a herd consistent with the carrying capacity of the land.

In some cases it is not possible to build a fence. Ocean fisheries can be over harvested. Pollution can enter the air or streams imposing costs on others. Classic economic theory did not coin the phrase ``Tragedy of the Commons'' but has known about market failures for generations. Market failures occur when the costs and burdens are placed on others without a voluntary transaction taking place.

The solution to the problem generally lies in government application of market mechanisms. For example, applying effluent charges on pollution forces the polluters to bear the cost of pollution impose on others. Taxing fish catches can act as a feedback mechanism preventing over exploitation.

However, an interesting problem arises as governments and societies become more socialized. As costs become born by society as a whole, there is less incentive to conserve. Potential costs influences decisions to raise children. We have agreed that the costs of primary and secondary education should be shared. Perhaps we will agree to share the cost of medical treatment. Perhaps we will agree that college costs should be shared. As more costs are socialized, we set the stage for a tragedy of the commons.

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