Economics

What Is the Tragedy of the Commons?

In economics, the tragedy of the commons is used to describe the failure of a shared-resource system if individual users are only thinking about their particular needs.

Tragedy of the Commons

William Forster Lloyd developed the concept of the tragedy of the commons in his 1833 essay. The tragedy of the commons refers to the economic theory describing a shared-resource system where individuals act according to their personal interests instead of working towards a mutual interest. In such a situation, the shared resources (commons) become overused, leading to their collapse. In modern times, the concept became famous after an article was written by an ecologist Garret Hardin in 1968. Shared resources that are defined in the tragedy of commons include the atmosphere, water resources and machinery.

Practical Application

The tragedy of the commons is applied in many situations, particularly regarding sustainable development and judicious use of shared resources. Discussions involving global warming, climate change, and environmental protection use the concept to analyze the effects and contribution of selfish human behavior with the deterioration of natural resources. The principle is also applied in the analysis of behaviors and trends in the fields of psychology, sociology, politics, anthropology, and taxation. In sustainable development, proponents suggest that the theory can be used as a self-regulatory measure where every concerned party is aware of the consequences of overexploitation.

The Commons Dilemma

The commons dilemma is a social situation where long-term results from the use of common resources conflict with the short-term selfish interests of individuals. Many factors influence the commons dilemma such as psychological, strategic, and structural elements. Researchers on the commons dilemma consider these factors in examining the use or disuse of common resources. Afterwards, they draw conclusions and recommend solutions to the problems arising from the utilization of the commons.

Criticisms

Some scientists criticize the theory of the tragedy of the commons as means of propagating private ownership. Hardin argued that a rational individual faced with the dilemma of the commons will seek to increase his assets. According to critics, rational people will first analyze the pros and cons of their actions on the long-term effects rather than the short-term effects before making decisions.

Solutions to the Tragedy of Commons

In his description, Hardin explains that while utilizing common resources, each user tries to maximize their own positive gain. All of these small individual percentages add up which cause negative results. Since freedom exists in commons, privatization was recommended as the only way to make each person accountable for the consequences of their actions. Government regulation on the use of common resources such as fisheries is also recommended as a practical solution to the tragedy of the commons. Another solution suggested is cooperation among users of the commons on how to use the available resources through collective restraint.

Relevant Examples

A real event that involves the collapse of the commons due to over-exploitation includes the fall of the Grand Banks Fisheries of Newfoundland due to cod numbers declining. The extinction of the Bluefin tuna in the Black and Caspian seas despite regulation measures is an example of the tragedy of the commons. Global warming, the dead zone along the Mississippi in the Gulf of Mexico, traffic congestion, population growth and unregulated logging are also examples.

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