The Tragedy and Rediscovery of the Commons

THE TRAGEDY AND REDISCOVERY OF THE COMMONS

What happens when people, acting in their own self-interest, have access to a shared resource?

Throughout most of the 19th and 20th centuries, the popular opinion was that this could only lead to disaster. In 1833 a Victorian economist by the name of William Forster Lloyd published a pamphlet in which he included a hypothetical example of a shared resource, which in this case was grassland that villages are entitled to let their livestock graze on. Forster argued that the rational thing to do, from an individual perspective, would be to add more cattle, because each additional cattle would bring additional benefits to its owner. But if all herders adopted this strategy, that would lead to overgrazing and depletion or even destruction of the resource.

This hypothetical scenario, which Lloyd coined 'the tragedy of the commons', inspired an essay by a professor of ecology at the University of California, Santa Barbara. In his essay, 'The Tragedy Of The Commons', Garrett Hardin again used the hypothetical example of herders sharing a pasture. Like Lloyd, Hardin believed that each herder would benefit from adding more cattle, even though collectively this would be detrimental. As the land eroded from overuse, the struggle between herders would only escalate, with each individual seeking to maximise their own grazing before resources are exhausted.

(Image from one minute economics)
For a long time, the notion of a 'tragedy of the commons' has been used as a justification of private ownership or State regulation. The argument is that, absent of a price mechanism or government intervention, individuals (being as they are utilitarian-seeking loners in pursuit of maximum personal gain) would play out a zero-sum competitive game that invariably leads to disaster.

WHAT IS THE COMMONS, ANYWAY?

Interestingly, although both Lloyd and Hardin used hypothetical examples to illustrate their point, 'the commons' is not hypothetical. In fact, it is a form of governance that far predates capitalism. According to Crawford MacPherson, who is one of the most distinguished authorities on the history of property, 'the commons' refers to an ancient concept of property based on access and sharing. On a practical level, the 'commons' approach to property can be seen in such examples as the right to enjoy access to the public square, to fish in local streams and, yes, to graze animals on common land.

But, if the commons is not a hypothetical example of unregulated self-interest leading to disaster, but rather an historical case of a form of governance that worked pretty well most of the time, how and why did we come to believe it could only lead to tragedy?

THE CONVENIENT LIE OF THE FREE MARKET

We find a clue by considering how property is viewed within the commons paradigm; as something to be made accessible and shared by a community. You may have noticed that such a description contradicts the modern concept. After all, we are used to thinking of property in terms of exclusion, as the right to private own resources and deny others from accessing them.

As Jeremy Rifkin wrote in 'Zero Marginal Cost Society', "the right to be included, to have access to one another, which is the right to participate 'in commons', is the fundamental property right, while private property, the right to enclose, own, and exclude, is merely a qualified deviation from the norm- although in modern times the qualification has all but subsumed the norm".

Indeed it has, and not accidentally so. As a governance model, 'the commons' and its principle of property as an accessible, shared resource was tarnished by economists who were committed to replacing it with a model based on private property and market exchange.

If you look at examples of commons activity, you will notice that community plays an important role. Indeed, some have argued that the term 'commons' is strictly-speaking a misnomer, since it originally referred to a resource owned by a community, not a resource that anybody- community member or not- had equal and open access to. When talking about 'the commons', social activity is often at the forefront; from the right to participate in the public square to modern-day debates concerning the issue of Internet neutrality, the central question of commons-related issues is always "when should property claims rest in private hands and when in public trust?".

A tactic of free-minute ideologues is to claim that there is no such thing as society. Whereas community is fundamental to the commons, as we shall see, the free-market ideologue considers the individual to be the fundamental unit of economic activity. In pushing this individualistic perspective, the public becomes stripped of its collective power, becoming autonomous agents forced to fend for themselves within a marketplace, rather than support one another within a shared commons.

SALE OF THE CENTURY

One thing that aided and abetted this stripping of collective power was the collapse of the Soviet empire, brought down by widespread corruption, inefficient bureaucracy and stagnant economic performance. Progressive politicians and neoliberal intellectuals were, for the most part, willing to portray any criticism of, and alternative to, the free market as supportive of Soviet-style big government. Although in most industrialised countries, publicly-administered services were managed pretty well (punctual trains, dependent postal services, reliable telecommunications networks and so on) Ill-feeling toward any non-market based was stirred up by big business, keen to portray the market as the only means to achieve economic progress and (in the words of Rifkin) "anxious to penetrate and mine a lucrative economic largesse that had long remained...beyond the reach of the market".

During the Reagan/ Thatcher years, it almost seemed like the notion of public responsibility for overseeing the general welfare of society was over. Goods and services that had long been considered public trusts- telecommunications networks, radio frequencies, public transport and more- were sold off. Almost overnight, governments were hollowed out and the public stripped of its collective power, while the private sector went from strength to strength. According to Rifkin, "there was virtually no widespread debate at the time, despite the breadth of the shift in power from the government to the private sector, leaving the public deeply unaware and uninvolved, although deeply affected by the consequences".

RETHINKING THE COMMONS

But then, after free-market ideology had prevailed and corporations had seized much of the wealth-producing capacity of the planet, various segments of society began to question the wisdom of placing everything on Earth in private hands. They also saw in the Internet distributed, laterally-scaled, peer-to-peer production where access to shareable goods and services distributed over networks seemed to have greater relevance than market-based property exchange. In other words, they saw in the social activity of online life reason to reexamine the commons as a governing model.

Perhaps the most important reexamining of commons-style governance was conducted by Elsinore Ostrom, an economist who wrote the first comprehensive economic and anthropological analysis of the commons over the past thousand years. This study of how and why commons management had succeeded and failed in the past provided Ostrom and her colleagues with insightful prescriptions for future commons management, work that lead to her becoming the first woman to receive the Nobel prize for economics.

Ostrom and her colleagues conducted experiments to determine which conditions lead to a failure of commons management. These experiments show that resources are invariably over-used when subjects are faced with a common-pool resource problem but are forced to make decisions in an independent and anonymous way, with no communication between other subjects. Introducing the ability to openly communicate with one another, however, results in a dramatic reduction in overconsumption.

Ostrom's studies also showed how subjects are willing to incur a cost to themselves in order to sanction free riders, for example willing to pay fees in order to fine other violators. All in all, these studies show that, when it comes to managing common-pool resources such as pastures for grazing animals, individuals will mostly put the community's interests before their own, and prioritise long-term preservation over short-term gain, even when faced with dire plight.

THE RULES

This community-centred behaviour does not appear spontaneously but rather is the result of design principles that Ostrom and her team found to be integral to every effectively-managed commons. First of all, there must be clear boundaries that define who may appropriate from the commons, and who may not. There must be appropriate rules restricting such things as the quantity of resources that can be appropriated, and the amount of labour that can be allocated to that appropriation. Those affected by the rules must be able to democratically determine the rules and adjust them over time. Those monitoring activity should be accountable to the appropriators. Appropriators should be able to subject other appropriators who violate the rules to graduated sanctions, while guarding against overly-punitive punishment that creates bad feeling within the community. There must be procedures for rapid access to affordable private mediation to resolve conflict between mediators. Lastly, if government authorities do not treat the commons association as legitimate and grant it the authority to self-manage, then the self-rule of the commons will be unlikely to achieve long-term sustainability.

What these rules and regulations show is that what keeps the commons viable are democratically agreed upon sets of self-management protocols. Through continuous collaboration and feedback, bonds of social trust can be sustained over generations, bonds that tie the community together and keep the commons from falling apart. The essential theme of commons management is that there are goods and services that are best optimised by public access. Such resources are best managed by the community, and the people who know best how to govern are the members of that community.

(Image from wikimedia commons)
CONTEXT-BASED SOLUTIONS

Far from being commons-style management that leads to unsustainable greed, it was (as Rifkin put it) "the excesses of a market-driven capitalist system motivated by the dogged pursuit of profit and abetted by the heavy hand of government-directed colonial and new-colonial policies that led to the pillage of resources and wholesale exploitation of humanity in the developing world over the course of the eighteenth, nineteenth and twentieth centuries".

Having said that, we must tread cautiously and not cast the free market as a villain, nor assume that commons-style management is always the ideal solution.

Private property arrangements and market exchanges have proven to be very efficient for some purposes. As Matt Ridley said, "markets in goods and services for immediate consumption- haircuts and hamburgers- work so well that it is hard to design them so they fail to deliver efficiency and innovation". Also, there have been many public goods that have been managed well by government oversight, such as roads and postal delivery, as well as markets that really need to be regulated. Ridley again: "markets in assets are so automatically prone to bubbles and crashes that it is hard to design them so they work at all. Speculation, herd exuberance, irrational optimism, rent-seeking and the temptation of fraud drive asset markets to overshoot and plunge- which is why they need careful regulation".

Each of the three dominant management models- government, the private sector, the commons- has its strengths and weaknesses and therefore cannot be the exclusive model. Rather, it largely depends on the particular context how well state, private, or commons-style management will fare. Determining which model to use in which circumstances and defending such context-based approaches against libertarian, socialist and commons ideologues whose blinkered view leads them to a confused 'one way suits all circumstances' mode of thinking will be one of the defining activities of the 21st century.

RESOURCES

The Rational Optimist by Matt Ridley

The Zero Marginal Cost Society by Jeremy Rifkin