Tragedy of the Commons

The Tragedy of the Commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally based upon 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.

"The Tragedy of the Commons," is a definitive market insight that was apparently first offered by Garrett Hardin in 1968 in the journal Science. In its most reduced state, it makes the argument that when a resource is shared those who use it will not care for it but simply exploit it. Without the ownership function, no one will have the incentive to preserve the resource; on the contrary, self-interest dictates that each will try to gain the largest share of the resource before it runs out.

Hardin's article enunciated a modern principal but disappointingly, he likely (ironically) comes to the wrong conclusion insofar as the solution is concerned, demanding that government itself provide the solution through greater regulation and oversight of scarce resources. How he arrives at this conclusion is difficult to say, as government itself is a foremost creator of shared-use resources – which is where the problem lies.

While Hardin's analysis of the Tragedy of the Commons would seem to be the most compelling portion of his perspective, even that has come under attack. The complaint is that Hardin did not sufficiently distinguish between common property resources and open-access resources. The term "commons," according to critics, implies some sort of "institutional arrangement." What Hardin was actually describing was more germane to open-access resources where there is no ownership arrangement at all.

One cannot help but wonder if such arguments are ultimately generated because of the discomfort that Hardin's argument posed to those who support state administration of resources. In fact, there does not seem to be much practical difference between property held in common and resources that are entirely "open access." Certainly the argument can be made that both suffer from the same sort of abuses.

Those who support government administration of "public use" resources do not want to recognize this, of course, because attributing validity to Hardin's insights would inevitably undercut government power. Hardin himself either did not see this or refused to acknowledge it when he argued that even more government involvement could make up for the lack of an Invisible Hand leading to the Tragedy of the Commons in the first place.

It is the lack of competition and ownership rights of resources that leads to the Tragedy of the Commons in the first place. This is a wonderful libertarian insight, though Hardin was no libertarian. The larger tragedy is that these elements in all their destructiveness are present throughout the administrative/political process.