[Market Economy Guide] The Tragedy of the Commons

“If anyone can use a pasture, it ends up becoming wasteland.”

“If incentives are used well, resources can be used while also growing them.”

Since Malthus, many scholars have worried about overpopulation. Carrying on that tradition, the American biology professor Garrett Hardin warned of the so-called “tragedy of the commons,” arguing that “if common resources that all members of a community can use—such as underground resources, grasslands, and lakes—are left solely to the workings of the market, they may be wasted and quickly depleted.”

Biologist Garrett Hardin’s Warning

One way to prevent this is to appeal to individuals’ consciences through public service advertisements encouraging people to use common resources carefully, or through signs posted around shared spaces. However, it is hard to guarantee that such measures will be highly effective.

A sure way to prevent the tragedy of the commons is to make people feel that the commons are “their own.” Charging fees is also a good method. When there is no fee system, even people who do not really need the resource may come and waste it. But once fees are introduced, each person is prompted to think again: “Is this resource necessary enough for me to pay to use it?” This has the effect of protecting the commons by preventing unnecessary users from entering and exploiting them.

Without an owner, common goods are damaged

Consider fishing grounds for blue crabs. If anyone can enter those waters and catch as many blue crabs as they want, everyone will try to catch more than others. That is because the person who gets there first and takes as many crabs as possible before others do can gain more. If people become obsessed with catching blue crabs—even taking juvenile crabs—rather than avoiding spawning seasons or making efforts to protect fishery resources, then over time the crab population will decline and fishery resources will be destroyed. In severe cases, people may never be able to catch blue crabs there again.

Users of common goods tend to maximize their own interests as much as possible. If this is left unchecked, the “tragedy of the commons” occurs, in which common goods are damaged beyond repair. Scholars argue that to prevent this, proper systems governing rights to use the commons must be established. In fact, systems such as catch limits or closed seasons to protect juvenile fish are already in operation with this in mind. Aquaculture is a representative success story in preventing overfishing of fishery resources while developing seafood into an industry. In Korea, major aquaculture products include olive flounder, abalone, eel, laver, oysters, and rockfish.

Diverging results: Elephant policies in Kenya and Zimbabwe

The commons can also be protected through privatization and the establishment of property rights. The contrasting elephant conservation policies of Kenya and Zimbabwe provide a good example. The governments of Kenya and Zimbabwe in Africa both struggled with indiscriminate elephant poaching.

In response, the Kenyan government completely banned elephant hunting and made the trade in hides and ivory illegal in order to protect animals. But despite these measures, the elephant population fell sharply over 10 years, from about 65,000 to about 19,000.

Zimbabwe, facing the same problem, made a completely different choice. It distributed elephants to local residents and recognized them as private property. Residents who had once captured elephants recklessly when they belonged to no one began to care for them when they became “my elephants.” As a result, the elephant population, which had been headed toward extinction, grew miraculously to about 110,000. As the number of elephants increased, the Zimbabwean government recognized an annual hunting quota of about 5,000 elephants and once again allowed the trade of elephant hides and ivory.

The differing elephant protection policies of Kenya and Zimbabwe, and their outcomes, provide an important clue to solving the tragedy of the commons. That clue is the proper role of government. Government must guarantee privatization and property rights by law and implement realistic, viable policies and institutions that take incentive principles into account. If it does so, we can be freer from the tragedy of the commons.

■ Please remember

Users of common goods tend to maximize their own interests as much as possible. If this is left unchecked, the “tragedy of the commons” occurs, in which common goods are damaged beyond repair. Scholars argue that to prevent this, proper systems governing rights to use the commons must be established. In fact, systems such as catch limits or closed seasons to protect juvenile fish are already in operation with this in mind.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 공유지의 비극

Author: Sung-no Choi

Date: 2019-03-11

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=14&idx=19987