Overview

Why do we overfish the oceans? Why do we pollute the air? Because they belong to everyone, and therefore they belong to no one. The Tragedy of the Commons explains why shared resources always get destroyed unless we have rules.

Core Idea

The core idea is Privatize Profits, Socialize Costs.

  • If I catch a fish, I get 100% of the profit.
  • If the ocean runs out of fish, everyone shares 1% of the cost.
  • Rational Strategy: Catch as many fish as possible right now before someone else does.

Formal Definition

A situation where individuals acting in their own self-interest deplete a shared resource, contrary to the common good. Coined by Garrett Hardin in 1968.

Intuition

  • The Pasture: A village has a shared field.
    • Farmer Joe adds one extra cow. He gets more milk (+1). The grass gets slightly damaged (-0.01 for everyone).
    • Joe thinks: “+1 is bigger than -0.01. I’ll add the cow.”
    • Every farmer thinks the same. They all add cows.
    • The grass dies. The cows die. The village starves.

Examples

  • Traffic Jams: The road is a commons. Everyone drives because it’s convenient for them. Result: Gridlock.
  • Space Junk: Companies launch satellites because it’s profitable. They leave the junk in orbit. Eventually, there will be so much junk we can’t leave Earth (Kessler Syndrome).
  • Climate Change: The atmosphere is the ultimate commons. We dump CO2 into it because it’s free.

Common Misconceptions

  • It’s inevitable: Elinor Ostrom won a Nobel Prize for proving that communities can manage commons without government or privatization, using social norms and trust.
  • Property Rights: The standard solution. If Joe owns the field, he won’t let the cows eat all the grass because he wants to use it next year.
  • Free Rider Problem: People who use a public good (like NPR or a park) without paying for it.

Applications

  • Fishing Quotas: Governments sell “Catch Shares.” You own the right to catch 1 ton of fish. You have an incentive to protect the population so your share is worth more next year.

Criticism / Limitations

  • Hardin was wrong: Historically, medieval villages managed commons very well for centuries. The “Tragedy” only happens when strangers compete without communication.

Further Reading

  • Ostrom, Elinor. Governing the Commons.
  • Hardin, Garrett. The Tragedy of the Commons.