I ran out of money in my final semester of graduate school. My first teaching job awaited me in the fall semester, but I had no income for the three summer months before then.
So I gave up my apartment and moved into a shared house with seven other guys. It was a huge old house with eight bedrooms, so each of us had a private room, and we all shared a common kitchen and two bathrooms.
Perhaps you know that some guys are neater than others, so the eight private rooms varied from clean to messy, but each guy was content with his own space. Yet the common kitchen and bathrooms were always dirty-to-disgusting, and we all complained about them.
When I moved in, I spent an afternoon cleaning the bathroom nearest to my bedroom. Within two days it was gross again, and I resolved spend no more time cleaning it. That summer I showered at the university gym.
We tried to solve the kitchen mess by setting up a rotation schedule. Seven days in a week and eight guys in the house, so each guy was assigned a day that he was responsible for cleaning the kitchen, with one guy to fill in when needed. The plan’s math was good, but the rotation schedule lasted for three days. One of the guys missed his cleaning day, food remnants and the dishes piled up, and the next guy refused to do double-duty. Everyone got mad and the system broke down. I ate out a lot that summer.
Question: Why were the house’s common areas unusable and the private areas satisfactory?
Let’s return to Garrett Hardin’s classic tragedy of the commons scenario. Each herdsman using a common pasture has an incentive to add more cows to the pasture so as to increase his profits. At the same time, he has little incentive to weed the pasture or dig a well on it, since he’d be doing the work and the other herdsmen would freeload. So the pasture is overused and under-maintained and becomes unusable.
The Greedy Nature of Man (GNOME) hypothesis blames the self-interest of the herdsmen: if only they weren’t so selfishly concerned with their own profits! How can we make them act for the common good? Clearly we need the government to manage resources — to ration, conscript, tax, and police as necessary to maintain the common resources! That is, socialism is the solution or we’re all going to suffer and even die!
Not so fast. The tragedy results from two factors working jointly: the common resource and private self-interest. What if the commons is the problem and not the self-interest?
Suppose that the common pasture is 10,000 acres and there are twenty herdsmen using it. We could divide the land into twenty 500-acre parcels and give one parcel to each herdsman. That is to say, we could privatize the resource by turning it into private property.
How would that change the dynamic? Suppose you’re one of the herdsmen now with your own 500-acre farm.
* Is it in your self-interest to keep adding cows to your pasture? Clearly not: if you want the pasture to be useful to you into the future, you will make sure that you put out only as many cows as the pasture can support.
* Will you dig a well so that your cows have water in the hot summer months? Costly, yes, but your cows will get the full use of the water — and if it’s an especially productive well you can sell the extra water to your neighbors.
* Will you talk with your neighbors about splitting the cost of a fence along your joint property line, so that his cows don’t wander onto your land and vice versa? Yes.
* Or will you think: Someday I want to retire, and when I do I want to sell my farm for a lot of money so that I can live comfortably until the end of my days. So I should manage my farm well so as to increase its economic value for the long term.
* Or: I want to leave my farm to my kids when I die, and I want them to have the best start possible in life. So I want to bequeath to them a productive, well-maintained farm.
The point is that with this private-property solution, self-interest is now aligned with healthy resource use. There is a role for government — not to manage the resource, as under GNOME’s socialism — but to assign and register property titles in the first place, to protect each farmer’s property rights, and to adjudicate disputes as they arise. If my cows wander onto your land, you have the right to prevent them and sue me for any damage they do. If you steal water from my well, you can be prosecuted. We both have an incentive to respect each other’s rights.
We have just described the free-market capitalist solution to the tragedy: self-interest and the profit motive working with property rights and limited government. That is, Capitalism Loves the Environment as Necessary (CLEAN).
But what about bad farmers? My last name is Hicks, which means that I come from a long line of farmers. What if I am lazy or incompetent or have a string of very bad luck and run my farm into the ground? It becomes dirty and weedy and impoverished to the point that I am no longer able to support myself with it.
My only option then is to sell the farm. To whom will I sell? Only to a farmer who can afford it — which is to say, to a farmer who has managed his own farm well and so made a profit from it, which put him in a position to invest in other resources.
But what about poor me? I am now without a farm. What happens to incompetent farmers like me is an issue, but our concern now is with good resource maintenance and solving the tragedy of the commons. The great virtue of the CLEAN system is that those who misuse resources are unable to do so for long. Resources end up in the hands of those who have an incentive to look after them and know what they are doing.
Return now to my partly-unpleasant summer sharing a house with seven guys. The kitchen and the bathrooms truly were a tragedy. And that is because they were a commons.
When we find mis-managed resources and nasty pollution, we almost always find a commons. Either there are no property rights or there is a failed attempt by a government to manage the resource as a common.
But how far can we extend the privatization solution?
Private property rights in land make sense, but land is not the only environmentally-sensitive resource and it is not always clear how property rights can solve all land-use claims. How would they work for more fluid resources such as air and water and animal species that migrate across great stretches of land? How do we extend them to new and intangible resources such as intellectual values? Cutting-edge stuff.
And is the choice only between privatization and government management? Nobel Prize winner Elinor Ostrom argued for a middle way: no one-size-fits-all, Ostrom argued, and she presented successful examples from around the world of locally-developed user associations that had evolved semi-private and semi-public practices for managing all kinds of resources. (Coincidentally, Ostrom was a professor at my graduate university at the time, so perhaps we should have consulted her about how to solve our kitchen-and-bathroom tragedy.)
This brings us to the current state of the art. The debate over the tragedy of the commons is part of the great Doomster versus Boomster battle. And the stakes are high, so let’s avoid the easy ideologically-driven shouting matches. Let’s first make sure we learn from the history of actual examples and consider all sides of the debate.
[This article was originally published in English at EveryJoe.com and in Portuguese at Libertarianismo.org.]