Tragedy of the Commons

The “tragedy of the commons” illustrates the fundamental differences between the effects of public and private property ownership.

“If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds.” – Ludwig Von Mises (Human Action)

The “tragedy of the commons” is the lack of incentive for individuals to maintain the quality, quantity, standard, etc., of a publicly owned resource. Something that is publicly owned is not owned by a single individual and everyone has equal access to it. This is opposed to private ownership where a single individual has the right to exclusive access. There is no reason for users of a publicly owned resource to be careful about how they use that resource because there is no guarantee that the resource won’t be destroyed or used up by the rest of the public. No one has any interest in maintaining a resource they cannot have exclusive access to.

 

For example, if you go to the movies with a date and split a soda, it is commonly owned between the two of you. If you each buy your own soda, your sodas are your own private property. If you and your date are extremely thirsty, how will these two scenarios play out? If you split one soda between two thirsty people, they will drink it without much regard for how much they are each consuming. Because you can’t limit your date’s consumption of the common resource, it is in your interest to consume as much as you can before your date consumes a majority of the resource.

If you each get your own sodas, you each have exclusive access to your own sodas and can consume in a more appropriate fashion rather than trying to drink it all before your date does. In a world of scarcity, resources to be conserved are best owned privately rather than publicly. This way, there is a sole owner who is responsible for and has an interest in maintaining the standard of that resource.

 

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