A common resource or “commons” is any resource, such as water or land, that provides users with tangible benefits but which nobody has an exclusive claim. The tragedy of the commons is an economic problem where the individual consumes a resource at the expense of society.
If individuals act in their best interests, over-consumption can harm society as a whole, lead to under-investment, and result in the total depletion of shared resources.
Key Takeaways
- The tragedy of the commons is an economic problem where the individual consumes a resource at the expense of society.
- A common resource or “commons” provides users with tangible benefits but lacks exclusive claims.
- The tragedy of the commons occurs when an economic good is rivalrous in consumption, non-excludable, scarce, and a common-pool resource.
Economic Theory
The tragedy of the commons is an economic theory that claims individuals tend to exploit shared resources, causing demand to outweigh supply, ultimately making resources unavailable to all.
In 1968, evolutionary biologist Garrett Hardin published the seminal article “The Tragedy of the Commons” in the journal Science. Using an illustration of sheep grazing, initially from English economist William Forster Lloyd, Hardin showed that privately held grazing lands are prudently utilized, while common grazing lands become oversaturated due to shared consumption.
Supply and Demand
The tragedy of the commons manifests when an economic good is rivalrous in consumption, non-excludable, scarce, and a common-pool resource. Consumers rush to consume as much as possible before others deplete the good, lacking incentives for maintenance or reproduction.
- Rival good: A good consumed by one precludes consumption by another on an individual basis.
- Non-excludable: Consumers are unable to prevent others from consuming the good.
- Scarce: A good that is limited, making a non-scarce good never rivalrous in consumption.
- Common-pool resource: A hybrid between public and private goods, shared and available to all but finite in supply.
Preventing the Tragedy of the Commons
Institutional and technological factors influence the rivalry and excludability of goods. Societies develop methods for dividing and enforcing exclusive rights, or punitive measures for over-consumption of common resources.
Regulatory Solutions
Top-down government regulation can reduce over-consumption, while conservation and resource renewal initiatives can help avoid depletion. For instance, governing bodies can limit livestock grazing or set fish catch quotas on government lands.
Assigning private property rights can convert a common resource into a private good. Such transformation often aligns with technological developments that clearly demarcate units of a resource into private parcels.
Collective Solutions
Nobeilist Elinor Ostrom highlighted that traditional rural arrangements achieved effective resource management through community norms. Practices such as rotational cropping, seasonal grazing, and sanctions against resource overuse allowed collective action to mitigate the tragedy of the commons.
Collective action can prevail where technical or natural constraints prevent division into private parcels, relying instead on regulations to manage consumption.
Has the Tragedy of the Commons Led to Extinction of a Resource?
The dodo bird serves as a historical example. This flightless bird, easily hunted by sailors, became extinct within a century of its discovery in 1598, due to overhunting in its small island habitats.
Where Is the Tragedy of the Commons Evident in Industry?
In the Grand Banks off Newfoundland, large-scale cod fishing backed by technological advances led to the industry’s collapse. Initially abundant, the fishery could not sustain such over-exploitation and crashed by 1990, illustrating the failure in managing shared resources without regulation or property rights.
How Is the Tragedy of the Commons Handled When Different Nations Share Resources?
Local governments can manage shared resources within clear boundaries. However, internationally shared resources are difficult to regulate. Solutions rely heavily on voluntary international cooperation, complicated by the absence of international enforcement mechanisms.
The Bottom Line
The tragedy of the commons highlights the risk of individual over-consumption in shared resources, emphasizing the need for effective management. When a resource is rivalrous in consumption, non-excludable, scarce, and a common-pool resource, informed regulation and community-driven strategies provide pathways to sustainable usage.
Related Terms: common-pool resource, rival good, non-excludable, private property, conservation, Elinor Ostrom, depletion.
References
- Scientific American. “The Tragedy of the Tragedy of the Commons”.
- American Association for the Advancement of Science. “The Tragedy of the Commons”.
- The Nobel Prize. “Elinor Ostrom—Facts”.
- Panorama. “How Humanity First Killed Dodo, Then Lost It as Well”.
- National Park Service. “The Grand Banks: Where Have All the Cod Gone?”
- Earth.org. “What Is the Tragedy of the Commons”?
