
Since it was introduced in the 60s, the Tragedy of the Commons, the idea that humans will inevitably ruin any resource we all share, has had sweeping effects on government and public attitudes on who owns the environment. Problem is, it was fictitious.See omnystudio.com/listener for privacy information.
Chapter 1: What is the Tragedy of the Commons?
Another econ edition. Typically not my favorite, but, you know, this one I could wrap my head around for the most part.
I think that's one of the reasons why it's had such an enormous impact on the world, because it is so easy to wrap your head around. We should probably say we're talking about the tragedy of the commons. And for those of you who aren't familiar, it's this idea, this concept that if you have a shared resource, a commons, say,
Chapter 2: How does the Tragedy of the Commons affect shared resources?
And people are able to use it at their own leisure, for their own purposes. Eventually, as they seek to maximize their profits, they're going to overuse this commons. And inevitably, it'll be ruined because people can't have anything nice, essentially.
You know what's funny? You're going to laugh at me here. They're all going to laugh at you. The central area of my high school was called the Commons. Yeah. And it just occurred to me 35 years or so after I graduated that that's what that meant.
Oh, I see. I thought you were going to say like my teenage years were the tragedy of the commons.
No, I just, I don't know. I never thought about the word because it was when you're in high school, it's just said in the commons, we'll meet in the commons. But it never occurred to me that that's what that meant, just like a common area shared by everyone.
It didn't either. To me, I know exactly what you're talking about. There was, if not high school, then maybe middle school. There was some school where that was called that too. And I wonder if it was like a surreptitious shot at kids, like they're all sheep. Because I don't think that's true. But one of the major uses for commons traditionally has been for grazing. That's a really good example.
If you let a bunch of people graze on a shared resource, but they're taking what they can from that resource to make money for themselves, to support themselves, then just because humans are rational, selfish, horrible beings, that meadow or that high school cafeteria will be ruined.
Yeah, that's right. And the idea of the Tragedy of the Commons started out in 1968 in an article from Science, the journal Science. It was called the Tragedy of the Commons, and it was by a biologist named Garrett Hardin. And he was sort of piggybacking on a 19th century English mathematician and economist named William Forster.
Not Foster. I would say piggybacking or hijacking.
Hijacking. William Forster Lloyd. And you mentioned grazing, and this is sort of the thought experiment Harden went with, which is like you have a grazing field, and let's say three farmers have use of it, and they're letting their cows and sheep graze out there.
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Chapter 3: What are the solutions proposed by Garrett Hardin?
Plus, you keep your 10-person safety buffer in case things change for you and your lifeboat, and you're fine. He actually argues— against guilt. You shouldn't feel any guilt. And as a matter of fact, we shouldn't put guilt on people for making decisions like these because they're just smart.
And then secondly, he also says that if you are one of those people like that one farmer who is like overgrazing, is morally repugnant, and I'm not going to do it. If you were like that farmer in this lifeboat and you said, I just, I can't do this. I can't sit there and watch people drown while I'm sitting here. I'm going to give up my seat for somebody else.
Hardin argued that just by virtue of a person accepting your seat, they are less moral than you. And that over time, as more people in the lifeboat give up their seat for moral reasons, morality will be replaced in this lifeboat with self-interest. And then what do you have then? So he makes all these like.
Chapter 4: How does privatization impact resource management?
Like if you're a rational person and you take emotion out of it, you're like, you know, I guess that kind of makes sense in a little bit. But the moment you add in any a drop of humanity to it, you're like, this is horrible that this guy wrote a series of papers arguing this.
Yeah, and he, you know, as far as the tragedy of the commons goes, he very explicitly says, like, you know, you've got to prioritize yourself here and what you're doing and maximize your profits. And if you don't, if you have ethics or something, then you're not a very smart person.
Right, exactly. So this was his whole thing that, you know, like all of it was overpopulation. The thing is it got diluted or – Taken very literally, very quickly. And it was applied to actual commons, as we'll see. And just it was stripped of its overpopulation, xenophobia, racism, all of that stuff. And just got applied to real world commons management.
And to say like it changed things is the understatement of the century, Chuck.
That's right. Should we take a break? Yeah, let's. All right. We'll be right back, everybody.
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Chapter 5: What role does government intervention play in resource management?
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Chapter 6: How has the Tragedy of the Commons been misinterpreted?
If company A does a really good job and does the right thing and comes in like way under the amount of emissions that they're supposed to hit by simply selling that to company B, who's like, man, we're not too good at that. I mean, is it creating like, doesn't that kind of defeat the whole purpose?
No, it doesn't. And we talked about this in the acid rain episode. Do you remember whatever happened to acid rain, that thing? Oh, yeah. It can work, and it does work. We actually reduced sulfur dioxide emissions that were associated with acid rain. So much that acid rain went away. And it was like the ozone layer of like the early 80s, I think, in 70s. Like it was a big, scary thing.
And we took care of it because of cap and trade schemes. So it can work. But how?
That's what I don't get. If one company is lowering their output, but another one is increasing theirs because they just bought the other companies, then how is that a net loss? Yeah.
Because of the cap. Because you put the cap at something close to a target that you want to reduce things to. So you don't make like some sky-high cap that's more than what you're at now. You make it less. And then maybe a couple years later, you make it less than that.
So those caps, those little shares or whatever, those allowances that they can trade, they get more and more valuable the less and less they represent because the law is kind of bringing these emissions down further and further. So ultimately, you're rewarding a company by reducing their emissions because they can make money selling that to another company.
And that other company is actually technically being punished because they're having to shell out more money than they budgeted for because they're emitting more than they are supposed to. So ultimately, you're penalizing and rewarding companies. through this cap-and-trade scheme, but you're also creating an artificial cap.
All these companies could just pollute as much as they want, but this government is saying, no, you actually can't. Here's your level. Here it is divided among the 10 companies. Go to town.
Does that make sense? Well, yeah. The thing I still don't get, though, is – Is the company that's, you know, buying extra emissions, whatever, output from the company that's, like, really good at it, are they allowed to go over the cap?
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Chapter 7: What are real-world examples that disprove the Tragedy of the Commons?
That's what happened with enclosure when they fenced the commons. It changed everything. And the concept of private property like really kind of developed out of that, at least in the West. Right. So we'll do a whole separate episode on that. But suffice to say that it seems to be once the commons were fenced and were no longer a shared resource, that's when the issues started to come up.
If you ask Karl Marx, he would have said that this is where we came up with the landless proletariat, the working class who had to work for wages because they no longer owned anything. Mm hmm. It created the very, very wealthy class that didn't actually have to do anything because all they had to do was start renting this private property of theirs to the people who needed to work.
It created a whole system of... problems. And in fact, some people are like, however you feel about capitalism, you can kind of trace this back to the beginning of capitalism, the fencing of the commons. The irony of all this is that William Forrester Lloyd was arguing against Adam Smith's capitalist idea that the invisible hand of the market will always guide things to a good outcome.
He created ultimately the tragedy of the commons as a thought experiment to show like, no, actually, people aren't guided to this bottom good. Instead, they are going to act in their own self-interest and destroy this stuff. So Hardin actually took it and turned it around as an argument for capitalism, for private enterprise, for privatizing stuff.
This argument that was originally used to disprove that.
Yeah. And if you were enclosing your own comments or arguing in that favor at the time, you were saying, hey, everything has been chaos up into this point. It's very inefficient. And there's got to be a more organized way to do this. And that was, you know, it wasn't a guise, I guess. But what they were really saying was, is we want this area. Right.
It's ours.
Yeah. I mean, let's just oversell the chaos maybe because it was actually working out okay for many centuries. But we're going to just sell it as this chaotic mess that needs to be cleaned up and organized.
Right. That's how it's done, it seems like, isn't it, Charles? Like people come along and create a problem that's not actually there for their own benefit ultimately. Yeah.
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Chapter 8: How did enclosure change the management of commons?
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We don't have a definitive answer. I was just kidding. You got me. We should talk about Eleanor Ostrom, though. This is a woman who wrote a book in 1990 called Governing the Commons, colon, the evolution of institutions for collective action. And she's probably like at the top of the list for really bringing this to the upper echelons of the political world worldwide, I guess.
Um, she took a bunch of examples all over the world of, uh, controlled, uh, CPRs like, um, grazing areas. It's always a good one. Um, in Switzerland, in this case, uh, forests in Japan, meadows in Japan, and of course, fisheries and things like that in this case in the Philippines.
Um, so kind of really kind of picking different spots all over the world and examining those, uh, these and how they've worked out, uh, And basically argued that like, hey, these things are had been working out for for centuries. And it worked out pretty good because everybody lived there who was involved.
And when you have local people that have long term interest in the well-being of their land and their area and keeping that up. then the economic side of things is not going to go away, but it's going to take a back seat to ensuring that this land that they live in stays as close to as it is as possible.
Yes, and. So she was the one who went out and actually did those field studies that Garrett Hardin didn't. Like, she had the receipts to back up what she was saying, which was the tragedy of the commons isn't actually true. It's certainly not in every case. And the ironic thing is this, Chuck. The tragedy of the commons played out, I feel like, for the most part—
When things were privatized and outside industry were allowed to come in and have a share of the commons. Yes. That's when it was – that's when the problems really began.
Yeah.
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