I’ve not read the original article on “The Tragedy of the Commons” that David refers to in this post , but it sounds very familiar, and David’s post brought back memories.
One version of it was discussed in some of my university economics classes: with the conclusion drawn that property rights gave people incentives to look after the long-term health of whatever ‘commons’ happened to be under consideration (usually fisheries, from memory). On the other hand, it was argued, the absence of property rights gave people (individualistic rational maximisers) incentives to plunder a resource as quickly as they could, because ‘if you don’t, somebody else will’, which would lead to destruction of the resource and thus to socially sub-optimal outcomes (e.g. less fish in total in the long-term).
It’s a narrative that has some credibility because, I believe, there is a kernel of truth at its core: in some circumstances, just such a tragedy will indeed occur. The qualification is the key to understanding the strengths and limitations of the story as a guide to policy-making. Continue reading