Rivising the Tragedy of the Commons

In 1968, Garrett Hardin first introduced a new framework to specify situations in which consumption of goods increases short-term utility of individuals while creating a long-term dead-weight loss in total welfare at the same time. He defines these situation in the following way: “The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone’s long-term interest for this to happen (Hardin, 1968). Hardin proposes enclosure of these commons, a redefinition of property rights.

Either a person owns his own land or someone is given ownership to the whole to manage the resource and distribute usage against compensation. The tragedy of the commons is related mainly to the acquaintance of Global public goods, which leads to the question how these can be defined in context to the framework of ecological crisis in todays world. Since 1968, there is an increasing number of academic research about how to deal with the commons, some agreeing to Hardin, others deviating from his standpoint.

The question arises whether the key-arguments and assumptions within Hardins “the tragedy of the commons” are correct and in what way Hardin’s work restricts options when dealing with the ecological crisis. In order to specify situations, in which the “tragedy of the commons” or alternative frameworks dealing with the commons can be applied, the paper first defines global public goods and introduces different kinds of commons. Secondly, Hardin’s argumentation is summarized in a practical example via game theory.

By revealing the primary motivations in decision-making as well as the final payoff-structure of individuals and society, Hardins assumption and hypothesis become much clearer. These arguments are then individually revisited and complemented by approaches taken from other research results. Finally, real-life examples will paint a picture about which approaches actually work in practice and what assumptions and conditions must be met in order to successfully implement these in order to solve the ‘tragedy’.

II. Specifying a framework II. a Defining the Commons The tragedy of the commons related to ecological crisis applies mainly when there are Global public goods involved. Traditionally, the definition of these goods focuses on the fact that they are characterized as non-excludable (can someone be excluded from consumption? ) and non-rival (Can a specific good be consumed by one person only at a time? ). Furthermore another restriction is that theses goods cannot be distributed on a market.

Nevertheless there are some problems with this distinction. Firstly, the distinction between the private and the public spheres is increasingly blurred and the market no longer belongs exclusively to the ‘private’ or the government to the ‘public’ sphere. Secondly, the failure to take into account the ‘actual’, i. e. Socially-constructed, properties of a good. For example the fact that the atmosphere is non-excludable and therefore public in nature, but can be made excludable and therefore private through pollution emission permits.

Kaul and Mendoza define a public good in the following way: “goods are de facto public if they are nonexclusive and available for all to consume” (2004). Based on this definition, the determination of property of a good is done on the basis of its excludability (rather than rivalry), and this property can be temporary. A further distinction can be made for goods that can become exclusive (through difficult and expensive means) in terms of excluding third parties from using and therefore abstracting benefits from the so called common pool resource (CPR). These resource are either naturally or man made.

Examples for these goods are forests, water, atmosphere or simply fishing grounds. According to Elinor Ostrom (1993), public goods and common pool resources share the attribute of the difficulty and costliness of exclusion (fencing, parceling etc. ) whereas the problem of overuse is due to subtractability is shared with pure private goods. (Ostrom, 1993) II. b Defining the “Tragedy,” Hardin’s payoff structure within Game theory In order to explain Hardin’s main findings, his concept is adapted on a Game-theoretical payoff structure representing the tragedy of the commons.

Hardin’s goal is to change the properties of Global public goods from public to private in order to achieve the payoff of a cooperative outcome. Imagine 2 fishermen living on one Island. Close to this Island, the only fishing-ground close enough to reach represents the only source of Income to these fishermen. At the carrying capacity of a commons, the fishing ground, each fisherman earns zero economic profits. Each fish sells for $ 5. Each fisher incurs one-half of the marginal cost of abstracting one fish and thereby decreasing discounted future costs due to decreasing population birthrates of fish.