Mon. Feb 17th, 2025
Tragedy of commonsImage: Pixabay

It is foundational in economics that resources are limited and therefore they must be used judiciously. Common resources are inevitably those not owned by anyone but exhibit a scarce character, such as fish stock in international waters. 

The common resources in economics are those that are rivalrous and non-excludable. 

By non-excludable, it means the inability to exclude others from using the resources. In other words, everyone has access to it.

The rivalry exists because when one person uses a resource, it diminishes the value of it or the quantity available to others.

Therefore, fish stock in international waters is limited. Nobody can be excluded from having access to it, but at the same time, if greed sees no bounds, then the fish stock/supply for other fishermen would be potentially less. 

When the man forgets about this basic principle and starts using these resources inconsiderately, driven by selfish mode, it would lead to tragedy—a situation of several users but paltry available resources. 

It is essential to highlight, public goods differ from common goods as they are non-excludable and non-rivalous. For example, a public park. It can be enjoyed by many people simultaneously without harming the potential depletion of availability to others.

What is the tragedy of the commons?

The tragedy of the commons describes a situation where individuals have access to common resources – used by many, and they use those resources driven by their interests in mind. Thus, ultimately, their actions result in the depletion of resources.

In 1832, a political economist at Oxford University- William Forster Lloyd, studying the recurring devastation of common pastures in England, questioned: “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 enclosures?”

Lloyd underscored the issue of human self-interest in his answer. He believed that self-interest was the guiding force for each human exploiter of the common. At one point, when the carrying capacity of the commons is over-saturated, a herdsman might judge, “Should I add another animal to my herd?” Because the herdsman owns his animals and the gains of doing so would entirely be his. However, the overloading of the pasture would be “commonized” among all other herdsmen. 

His privatized gain weighs more than his share of the commonized loss. Undoubtedly, a self-serving herdsman would add another animal to his herd. Using the same rationality, the other herdsmen would act. Ultimately, the common property would be devastated, and damage would be done. 

In 1968, evolutionary biologist Garrett Hardin published “The Tragedy of the Commons” in the peer-reviewed journal Science, which shed light on the underlying causes of overpopulation. Hardin used the example of sheep grazing land, taken from the early English economist William Forster Lloyd.

Grazing lands that are held as private property are frugally used by the landholder to preserve the land and the health of the herd. Common grazing lands become vulnerable in the presence of plenty of livestock because the grasses are consumed and shared among all sheepherders. Hardin tantamounts his point to humans who over-utilize the commonly accessible scarce resource, making it harder for others to find.

He emphasized that humans put their individual interests or personal needs first, not much bothered with the negative impact it may have on others. Often, this selfish behavior is justified by such people because others also do not act in the best interest of others or the community. 

How to overcome the tragedy of the commons?

Ideally, governments at the local, state, national, and international levels should define and manage shared resources. At an international level, there must be effective treaties that should define the limit of using these resources. While at the national level, governments must pass notifications periodically to stay aligned with their commitments in international treaties.

Alternatively, a suggestion that Elinor Claire “Lin” Ostrom, an American economist, gives is that of resource arrangement and management at the local level. She says some investigation must be undertaken at the local community level to check how effectively communities manage the common resources or where they lack. She used the term ‘common pool resource management’ to explain how local individuals together can make informal arrangements to manage and use the pool of resources

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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