[P2P-F] Fwd: [CommonGood] ​The truth about the tragedy of the commons (thanks to veron)

[Michel Bauwens]

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From: tina ebro <cgebro at gmail.com>
Date: Fri, Apr 22, 2016 at 7:37 AM
Subject: [CommonGood] ​The truth about the tragedy of the commons (thanks
to veron)
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​apologies if cross-posting​

​
​​
The Only Woman to Win the Nobel Prize in Economics Also Debunked Mainstream
Economics
​​
The truth about the tragedy of the commons
<http://evonomics.com/the-only-woman-to-win-the-nobel-prize-economics-debunked/#comments>
<http://evonomics.com/the-only-woman-to-win-the-nobel-prize-economics-debunked/#>
<http://evonomics.com/the-only-woman-to-win-the-nobel-prize-economics-debunked/#>
<http://evonomics.com/the-only-woman-to-win-the-nobel-prize-economics-debunked/#us-modal-JeCjs>
<http://evonomics.com/the-only-woman-to-win-the-nobel-prize-economics-debunked/#us-modal-cBzwy>

*By David Bollier*

“Picture a pasture open to all.”

For at least a generation, the very idea of the commons has been
marginalized and dismissed as a misguided way to manage resources: the
so-called tragedy of the commons. In a short but influential essay
published in Science in 1968, ecologist Garrett Hardin gave the story a
fresh formulation and a memorable tagline.

“The tragedy of the commons develops in this way,” wrote Hardin, proposing
to his readers that they envision an open pasture:

It is to be expected that each herdsman will try to keep as many cattle as
possible in the commons. Such an arrangement may work reasonably
satisfactorily for centuries because tribal wars, poaching and disease keep
the numbers of both man and beast well below the carrying capacity of the
land. Finally, however, comes the day of reckoning, that is, the day when
the long-desired goal of social stability becomes a reality. At this point,
the inherent logic of the commons remorselessly generates tragedy. As a
rational being, each herdsman seeks to maximize his gain. Explicitly or
implicitly, more or less consciously, he asks, “What is the utility to me
of adding one more animal to my herd?”

The rational herdsman concludes that the only sensible course for him to
pursue is to add another animal to his herd. And another…. But this is the
conclusion reached by each and every rational herdsman sharing a commons.
Therein is the tragedy. Each man is locked into a system that compels him
to increase his herd with- out limit—in a world that is limited. Ruin is
the destination toward which all men rush, each pursuing his own best
interest in a society that believes in the freedom of the commons. Freedom
in a commons brings ruin to all.

The tragedy of the commons is one of those basic concepts that is drilled
into the minds of every undergraduate, at least in economics courses. The
idea is considered a basic principle of economics—a cautionary lesson about
the impossibility of collective action. Once the class has been escorted
through a ritual shudder, the professor whisks them along to the main
attraction, the virtues of private property and free markets. Here,
finally, economists reveal, we may surmount the dismal tragedy of a
commons. The catechism is hammered home: individual freedom to own and
trade private property in open markets is the only way to produce enduring
personal satisfaction and social prosperity.

Hardin explains the logic this way: we can overcome the tragedy of the
commons through a system of “mutual coercion, mutually agreed upon by the
majority of the people affected.” For him, the best approach is “the
institution of private property coupled with legal inheritance.” He
concedes that this is not a perfectly just alternative, but he asserts that
Darwinian natural selection is ultimately the best available option,
saying, “those who are biologically more fit to be the custodians of
property and power should legally inherit more.” We put up with this
imperfect legal order, he adds, “because we are not convinced, at the
moment, that anyone has invented a better system. The alternative of the
commons is too horrifying to contemplate. Injustice is preferable to total
ruin.”

Such musings by a libertarian-minded scientist have been catnip to
conservative ideologues and economists (who are so often one and the same).
They see Hardin’s essay as a gospel parable that affirms some core
principles of neoliberal economic ideology. It affirms the importance of
“free markets” and justifies the property rights of the wealthy. It
bolsters a commitment to individual rights and private property as the
cornerstone of economic thought and policy. People will supposedly have the
motivation to take responsibility for resources if they are guaranteed
private ownership and access to free markets. Tragic outcomes—“total
ruin”—can thereby be avoided. The failure of the commons, in this telling,
is conflated with government itself, if only to suggest that one of the few
recognized vehicles for advancing collective interests, government, will
also succumb to the “tragedy” paradigm. (That is the gist of Public Choice
theory, which applies standard economic logic to problems in political
science.)

Over the past several decades, the tragedy of the commons has taken root as
an economic truism. The Hardin essay has become a staple of undergraduate
education in the US, taught not just in economics courses but in political
science, sociology and other fields. It is no wonder that so many people
consider the commons with such glib condescension. The commons = chaos,
ruin and failure.

There is just one significant flaw in the tragedy parable. It does not
accurately describe a commons. Hardin’s fictional scenario sets forth a
system that has no boundaries around the pasture, no rules for managing it,
no punishments for over-use and no distinct community of users. But that is
not a commons. It is an open-access regime, or a free-for-all. A commons
has boundaries, rules, social norms and sanctions against free riders. A
commons requires that there be a community willing to act as a
conscientious steward of a resource. Hardin was confusing a commons with
“no-man’s-land”—and in the process, he smeared the commons as a failed
paradigm for managing resources.

To be fair, Hardin was following a long line of polemicists who projected
their unexamined commitments to market individualism onto the world. As we
will see later, the theories of philosopher John Locke have been widely
used to justify treating the New World as terra nullius—open, unowned
land—even though it was populated by millions of Native Americans who
managed their natural resources as beloved commons with unwritten but
highly sophisticated rules.

Hardin’s essay was inspired by his reading of an 1832 talk by William
Forster Lloyd, an English lecturer who, like Hardin, was worried about
overpopulation in a period of intense enclosures of land. Lloyd’s talk is
notable because it rehearses the same line of argument and makes the same
fanciful error—that people are incapable of negotiating a solution to the
“tragedy.” Instead of a shared pasture, Lloyd’s metaphor was a joint pool
of money that could be accessed by every contributor. Lloyd asserted that
each individual would quickly deplete more than his share of the pool while
a private purse of money would be frugally managed.

I mention Lloyd’s essay to illustrate how ridiculous yet persistent the
misconceptions about the “tragedy” dynamic truly are. Commons scholar Lewis
Hyde dryly notes, “Just as Hardin proposes a herdsman whose reason is
unable to encompass the common good, so Lloyd supposes persons who have no
way to speak with each other or make joint decisions. Both writers inject
laissez-faire individualism into an old agrarian village and then gravely
announce that the commons is dead. From the point of view of such a
village, Lloyd’s assumptions are as crazy as asking us to ‘suppose a man to
have a purse to which his left and right hand may freely resort, each
unaware of the other’.”

This absurdity, unfortunately, is the basis for a large literature of
“prisoner’s dilemma” experiments that purport to show how “rational
individuals” behave when confronted with “social dilemmas,” such as how to
allocate a limited resource. Should the “prisoner” cooperate with other
potential claimants and share the limited rewards? Or should he or she
defect by grabbing as much for himself as possible?

Needless to say, the complications are endless. But the basic premise of
such social science experiments is rigged at the outset. Certain
assumptions about the selfishness, rational calculation of individuals and
lack of context (test subjects have no shared social history or culture)
are embedded into the very design of the “game.” Test subjects are not
allowed to communicate with each other, or develop bonds of trust and
shared knowledge. They are given only limited time and opportunity to learn
to cooperate. They are isolated in a lab setting for a single experiment,
and have no shared history or future together. Aghast at the pretzel logic
of economic researchers, Lewis Hyde suggested that the “tragedy” thesis be
called, instead, “The Tragedy of Unmanaged, Laissez-Faire, Common-Pool
Resources with Easy Access for Noncommunicating, Self-Interested
Individuals.”

The dirty little secret of many prisoner’s dilemma experiments is that they
subtly presuppose a market culture of “rational” individuals. Most give
little consideration to the real-life ways in which people come to
cooperate and share in managing resources. That is changing now that more
game theory experiments are incorporating the ideas of behavioral
economics, complexity theory and evolutionary sciences into their design.

Yet the fact remains that a great deal of economic theory and policy
presume a rather crude, archaic model of human being. Despite its obvious
unreality, Homo economicus, the fictional abstract individual who actively
maximizes his personal “utility function” through rational calculation,
continues to hold sway as the idealized model of human agency in the
cultural entity we call the “economy.” Two introductory economics textbooks
widely used in the US, by Samuelson and Nordhaus (2004) and Stiglitz and
Walsh (2006), consider cooperative behaviors to be so inconsequential that
they do not even mention the commons. If economists show any inclination to
discuss the commons, you can be sure that the word “tragedy” will be
lurking very nearby.

Paradoxically enough, the heedless quest for selfish gain— “rationally”
pursued, of course, yet indifferent toward the collective good—is a better
description of the conventional market economy than a commons. In the
run-up to the 2008 financial crisis, such a mindset propelled the wizards
of Wall Street to maximize private gains without regard for the systemic
risks or local impacts. The real tragedy precipitated by “rational”
individualism is not the tragedy of the commons, but the tragedy of the
market.

Happily, contemporary scholarship has done much to rescue the commons from
the memory hole to which it has been consigned by mainstream economics. The
late American political scientist Elinor Ostrom of Indiana University
deserves special credit for her role in expanding the frame of analysis of
economic activity. In the 1970s, the economics profession plunged into a
kind of religious fundamentalism. It celebrated highly abstract,
quantitative models of the economy based on rational individualism, private
property rights and free markets. A child of the Depression, Ostrom had
always been interested in cooperative institutions working outside of
markets. As a young political scientist in the 1960s, she began to question
some of the core assumptions of economics, especially the idea that people
are unable to cooperate in stable, sustainable ways. Sometimes working with
political scientist Vincent Ostrom, her husband, she initiated a new kind
of cross-disciplinary study of institutional systems that manage
“common-pool resources,” or CPRs.

CPRs are collective resources over which no one has private property rights
or exclusive control, such as fisheries, grazing lands and groundwater. All
of these resources are highly vulnerable to over-exploitation because it is
difficult to stop people from using them. We might call it the “tragedy of
open access.”

What distinguished Ostrom’s scholarship from that of so many academic
economists was her painstaking empirical fieldwork. She visited communal
landholders in Ethiopia, rubber tappers in the Amazon and fishers in the
Philippines. She investigated how they negotiated cooperative schemes, and
how they blended their social systems with local ecosystems. As economist
Nancy Folbre of the University of Massachusetts, Amherst, explained, “She
would go and actually talk to Indonesian fishermen or Maine lobstermen, and
ask, ‘How did you come to establish this limit on the fish catch? How did
you deal with the fact that people might try to get around it?’”