The Tragedy of the Commons

Topic 42 – Garrett Hardin and

the English Commons

Simulation

• Choice• Incentives• Property Rights• Voluntary Exchange

The Tragedy of the Commons

• Property held “in common” often tends to be overused, abused, over-harvested –each individual gains the full benefit of the

use –while suffering less than full costs of his or

her actions on the common property

• If everyone owns it…

The American Buffalo

The cod fisheries of New England

Open-ocean blue fin tuna

Whales

Public restrooms versus private restrooms

Redfish and Paul Prudhomme

Yellow bikes

Problems with common ownership

• Rewards aggressive harvest• Penalizes stewardship and resource

conservation• Promotes conflict among community

members with differing values

Works well only when there is little pressure on the resource

Property Rights

Why are private property rights useful?

• Resource owners have a strong incentive to embrace stewardship and conservation.

• Resource owners are exposed to the long-term consequences of their actions.

• Resource owners have legal recourse towards those who would damage the resource.

Why are private property rights useful?

• Resource owners have an incentive to share access when the others in society given the signal that they want access. This occurs through others being willing to pay a price to have that access.• Resource owners who are paid for

access have funds to ensure continued access.

Private property rights must be

• Defined• Defendable• Divestible

Defined

• Contracts and Barbed Wire• The privileges and

limitations of property ownership must be clearly specified and easily ascertained

Defendable

• Owners must have reasonable expectation that their rights will be protected

• Owners must have legal recourse and enforcement through the courts and police

Divestible• Owners must be able to transfer all or

portions of the property rights to others