Tuesday, October 9, 2012

Collaboration and the commons

I've been working on a chapter describing the Tragedy of the Commons for the forthcoming Encyclopedia of Natural Resource Economics (I'm also writing one on Coastal Resource Economics, more about that one soon).  Hardin discusses the tragedy of depletion as an inevitable result when natural resources are rival and non-excludable, noting that self-interested users will tend to ignore the social costs and focus on maximizing personal benefits. To solve the problem, Hardin called for privatization of the commons or government control via rationing or taxation.  We see many modern day examples of this tragedy, from over-fishing to atmospheric pollution. As I've noted on more than one occasion, all of us can be seen as the herdsmen of our day in one way or another.  

It's important to point out that Hardin's tragedy does not always unfold as he described. Under certain conditions, collective action (group management) can be an effective means of achieving environmentally sustainable and economically efficient outcomes for common pool resources. Elinor Ostrom (winner of the 2009 Nobel Prize in Economics) was a leading researcher in this area.

Here is an excellent summary of Ostrom's work.

Read more about Ostrom's work here and here.

A similar notion is provided by this interesting new sharing site

Lots of reading on the Tragedy here at Science.

1 comment:

N Lipscomb said...

“The Tragedy of the Commons,” does put a lot of emphasis on the rational choice aspect, but I would like to further consider the overpopulation argument. According to Hargett, modern society has overcome the "trimming" that Mother Nature could achieve on her own in regards to an excess of rational sharers of the commons. In essence, our current institutions allow population growth beyond the capacity of the land: a family could have twenty children and if the mother and father could not provide for them all through land and labor, society/government will cover the remainder.
So, if we do implement some sort of StreetBank situation in order to reduce demand of products utilizing natural resource inputs in an attempt to cut supply and improve conservation, what implications would that have for employment within a bulging population? Perhaps demand is cut via a sharing system, supply falls soon after, and then the lost income & unemployment (for how long?) of workers is made up by the ability to share: we can enjoy an economy with smaller markets and less natural resource extraction.
Then I wonder about the supply of jobs:
Perhaps this issue was touched upon in some further reading, but so many jobs are created in natural resource extraction because they're a convenient solution to an "overpopulation" business cycle—politicians want to impress the population by providing quick jobs for the masses. They're convenient in their massive scale (more jobs), high demand for their products as inputs, and they usually require minimal training. Now consider we cut demand through some sort of sharing system. The people who lose their jobs need to be relocated somewhere else--are we at risk of not having enough open positions in other areas to relocate the unemployed from a previously gargantuan market? And then there’s the issue of all the new, coming-of-age workers entering the market that will be considered competition.
Or it can remain that these common-pool-resource communities remain few and small enough that their economic impact is negligible and only the partakers of such communities reap the benefits of shared resources—though this would lead to near negligible conservation efforts in reducing the scope of extractive resource input markets.