Regulation of Resources is the Best Solution to 'The Tragedy of the Commons'
With the omnipresent, invariable necessity for certain goods in our world and a rapidly expanding population many resources are becoming exponentially more scarce and valuable. Given the tremendous dependency upon these resources, such as timber, oil, fish and farmland, they are in great need of proper management.
The lack of resources and misuse of what is available is a phenomenon known as The Tragedy of the Commons. "The Tragedy of the Commons" is an economic theory put forward by the noted American ecologist Garrett Hardin in 1968. Hardin’s theory stated that when dealing with resources that have a common ownership among many constituents, a selfish “rational” reasoning causes one to take advantage of what is available, regardless of whether it is exceeding their fair share or not.
In Hardin's essay, he posited that individuals’ overuse of communal resources are instantly beneficial to that particular user but detrimental to the community’s long term success. The user gets the full advantage of the extra resources while the costs are spread among the community. This repeated action will eventually destroy the commons, dooming the livelihood of those depend on its fruit.
The reason this tragedy exists is because the lack of resources causes people to face a Prisoner's Dilemma. This is when a person's actions depict their future, as well as all others facing the same Prisoner's Dilemma. If everyone acts in a selfish manner then everyone gains something from their behavior but ultimately loses some because of everybody else's behavior. If everybody acts in a selfless manner, nobody would gain anything from their actions but would not be taken from because nobody abused the resources.
As seen in a study from the University of Hamburg, actual prisoners are better at succeeding in this seemingly lose-lose situation. 56% of inmates remained silent while only 37% of students did. This goes to show there is a way of wrongfully manipulating the system when applicable. The only solution is to eliminate all possibilities of facing this dilemma.
As seen to the right, the different combinations of actions call for different outcome. This is the original Prisoner's Dilemma.
There are two basic strategies for managing any limited resource: privatization and regulation. When considering the more effective method for allocating these resources, one must weigh each option carefully because the decision will have lasting, and in some instances profound, consequences.
Privatization entails restricting access to a resource to a designated group of members who essentially buy in to the plan. Regulation requires people to take responsibility when dealing with shared goods through the imposition of restrictions on use and penalties for those who violate the restrictions. Regulation differs from privatization in that the resource continues to be shared in common instead of being divided and granted to one or more owners. Although privatization offers some benefits as a solution, and in some instances may be the preferred solution, the benefits from regulation in most instances far outweigh those of privatization.
Privatization is a Common Approach to Solving this Tragedy, Though Often Flawed
Privatizing limited resources is one way of solving the tragedy of the commons. The argument for this practice is if people were to have ownership over the commons, they would begin to feel a sense of responsibility for those goods and resources as well as a keen appreciation for the consequences of misusing them. In the case of farmland, for example, if a farmer allows his cows to overgraze and deplete the grass, he is the only one affected by these actions. While his cattle are the sole reapers of the instant benefit of using more than required, he is the only farmer who will suffer the consequences of his shortsightedness. At first glance, privatization might appear to be a sound solution to this need.
The inherent flaws to this solution are exposed upon closer examination. When dealing with a massive, diverse terrain, a private ten acre plot in a steep, rocky region is much less valuable than a private ten acre plot in prime, lush grasslands. In the case of this land being carved up and sold to individual contractors, inequity can arise among the contractors’ properties.
Of course, the market value (and price charged) would not be the same for each parcel, which could serve as a means to compensate those who end up with less valuable plots, but there is no real way to accurately measure the differences resulting from unique areas. As stated by Joseph Raz, comparing different goods is impossible because goods are incommensurable. For example, steep, mountainous land is much more valuable to an avid skier than it would be to a handicapped senior citizen, the same way a new wheelchair can be a life changing acquisition to the aforementioned senior while holding little to no value for a healthy skier. Equity is very difficult to achieve via privatization.
Accessibility, Accountability, and Promotion of Responsible Behavior Render Regulation the Superior Solution
Regulation of the resources is, in most instances, the more effective method of curing the Tragedy of the Commons. In many cases, such as a large fisheries, privatizing the water into smaller, private fishing zones is not always practical. If contaminants are found in an area of the water allocated to one particular owner, that owner is now out of luck because his “fair” section of the fishing zone will be unusable for a period of time. Also, fish are not necessarily evenly dispersed; rather, they find habitats and live in groups, or schools. The paths traveled by schools are not necessarily orderly nor evenly spaced. One area may have more fish than all others combined. So, instead of selling off the water into smaller fractions of property, it is more effective and fair to regulate it.
Overfishing is a phenomenon experienced in nearly all fishing communities, simply because the lack of resources calls for obtaining as much as possible. By prohibiting nets and other large scale capturing devices, you severely decrease the rate at which fish are caught. Another similar regulation is limiting time at sea. Less time at sea decreases the amount of fish captured, thus preventing the rapid depletion of fish.
Professor Green, with a specialization in economics, discusses the advantages of regulating the fishing industry.
The forestry industry presents another strong case for a regulated system for the advancement of resource optimization. A quick depletion of trees would physically prohibit their reproduction, or at the very least impede the process of replenishment. Rather than clearing a region, many loggers will instead use the plan of selective cutting. By using this method, the lifespan of the forests are stretched in comparison to clear cutting.
(Green's explanation for the regulation of logging)
Clear cutting occurs when all of the trees in a region are cut down in one session. This action allows immediate maximization of efficiency, yielding incredible instant economic benefits. This unregulated efficiency is doomed to self destruct because of the disregard for the continued available of those resources in the long term. It is only a matter of time until shortsighted practices such as clear cutting destroys the forest beyond repair.
Selective cutting is the practice of cutting down a certain amount of trees in an area for a certain amount of time. This helps to ensure that the long term viability of the forest will not be compromised. Regulating this process does not yield the instant “jackpot” effect of clear cutting; however, by selectively cutting we can spread the economic benefits over a longer period of time, eventually making up for - and far exceeding - the difference of the original earnings. The incentive of greater long term success drives responsible and forward-thinking members of the logging industry to take the path of selective cutting.
There is a natural trade off between efficiency and equity. In the short run, efficiency goes down for the sake of promoting equity, or conservation. In the long run, the efficiency and value of of an intelligently regulated process will be manifested because more land remains available to harvest those valued resources. A long term, consistent pay out demonstrates the clear advantages of a regulated efficiency rate to maximize overall, lasting success compared to a quick windfall of wealth with little promise of durable results.
The Oil Industry's Turmoil Demonstrates The Flaws of Privatization
Privatization in the oil industry offers a cautionary tale in the area of resource management. The efficiency, or initial success, is uncontrolled, allowing those in the market to use and exploit the available resources at limitless rates. This form of distributing goods has been historically proven to test and crumble peoples’ moral and ethical strength, leading them to act in ways detrimental to others’ well being as well as undermining society’s implied code of conduct set in place to maintain cooperation and coexistence. The main goal of privatized systems is to obtain as much of a resource as possible in order to sell as much as possible, to achieve the ultimate goal of maximum monetary success.
In a regulated system, many of the major restrictions are geared toward slowing down the rate of gathering and using resources. Because this is a profit driven industry, the primary motivations of business owners are financial, often conflicting with notions of conservation and sustainability.
If oil was regulated and distributed by the
government, there would likely be a more environmentally-conscious approach to their work. The government is charged with ensuring the long term well-being of its citizens and environment, whereas a private corporation is not. The government would be obligated to act in a more moderate fashion because of its responsibilities and moral necessities, free of the pressures corporations and their managers often face to produce short term results.
Much of the issue of lack of resources has been expedited by misuse and exploitation of available resources. These actions are seemingly beneficial to those who obtain the immediate benefits of their actions, but this short sighted mindset could not be more inversely effective. As much as avoiding Prisoner’s Dilemmas can help alleviate the Tragedy of the Commons, the reality of privatizing these goods leaves individuals facing these dilemmas at a consistently high rate. The alternative method of regulating these resources from a governmental or objective committal stand point has been proven to work more effectively than privatizing them.
With the omnipresent, invariable necessity for certain goods in our world and a rapidly expanding population many resources are becoming exponentially more scarce and valuable. Given the tremendous dependency upon these resources, such as timber, oil, fish and farmland, they are in great need of proper management.
The lack of resources and misuse of what is available is a phenomenon known as The Tragedy of the Commons. "The Tragedy of the Commons" is an economic theory put forward by the noted American ecologist Garrett Hardin in 1968. Hardin’s theory stated that when dealing with resources that have a common ownership among many constituents, a selfish “rational” reasoning causes one to take advantage of what is available, regardless of whether it is exceeding their fair share or not.
In Hardin's essay, he posited that individuals’ overuse of communal resources are instantly beneficial to that particular user but detrimental to the community’s long term success. The user gets the full advantage of the extra resources while the costs are spread among the community. This repeated action will eventually destroy the commons, dooming the livelihood of those depend on its fruit.
The reason this tragedy exists is because the lack of resources causes people to face a Prisoner's Dilemma. This is when a person's actions depict their future, as well as all others facing the same Prisoner's Dilemma. If everyone acts in a selfish manner then everyone gains something from their behavior but ultimately loses some because of everybody else's behavior. If everybody acts in a selfless manner, nobody would gain anything from their actions but would not be taken from because nobody abused the resources.
As seen in a study from the University of Hamburg, actual prisoners are better at succeeding in this seemingly lose-lose situation. 56% of inmates remained silent while only 37% of students did. This goes to show there is a way of wrongfully manipulating the system when applicable. The only solution is to eliminate all possibilities of facing this dilemma.
As seen to the right, the different combinations of actions call for different outcome. This is the original Prisoner's Dilemma.
There are two basic strategies for managing any limited resource: privatization and regulation. When considering the more effective method for allocating these resources, one must weigh each option carefully because the decision will have lasting, and in some instances profound, consequences.
Privatization entails restricting access to a resource to a designated group of members who essentially buy in to the plan. Regulation requires people to take responsibility when dealing with shared goods through the imposition of restrictions on use and penalties for those who violate the restrictions. Regulation differs from privatization in that the resource continues to be shared in common instead of being divided and granted to one or more owners. Although privatization offers some benefits as a solution, and in some instances may be the preferred solution, the benefits from regulation in most instances far outweigh those of privatization.
Privatization is a Common Approach to Solving this Tragedy, Though Often Flawed
Privatizing limited resources is one way of solving the tragedy of the commons. The argument for this practice is if people were to have ownership over the commons, they would begin to feel a sense of responsibility for those goods and resources as well as a keen appreciation for the consequences of misusing them. In the case of farmland, for example, if a farmer allows his cows to overgraze and deplete the grass, he is the only one affected by these actions. While his cattle are the sole reapers of the instant benefit of using more than required, he is the only farmer who will suffer the consequences of his shortsightedness. At first glance, privatization might appear to be a sound solution to this need.
The inherent flaws to this solution are exposed upon closer examination. When dealing with a massive, diverse terrain, a private ten acre plot in a steep, rocky region is much less valuable than a private ten acre plot in prime, lush grasslands. In the case of this land being carved up and sold to individual contractors, inequity can arise among the contractors’ properties.
Of course, the market value (and price charged) would not be the same for each parcel, which could serve as a means to compensate those who end up with less valuable plots, but there is no real way to accurately measure the differences resulting from unique areas. As stated by Joseph Raz, comparing different goods is impossible because goods are incommensurable. For example, steep, mountainous land is much more valuable to an avid skier than it would be to a handicapped senior citizen, the same way a new wheelchair can be a life changing acquisition to the aforementioned senior while holding little to no value for a healthy skier. Equity is very difficult to achieve via privatization.
Accessibility, Accountability, and Promotion of Responsible Behavior Render Regulation the Superior Solution
Regulation of the resources is, in most instances, the more effective method of curing the Tragedy of the Commons. In many cases, such as a large fisheries, privatizing the water into smaller, private fishing zones is not always practical. If contaminants are found in an area of the water allocated to one particular owner, that owner is now out of luck because his “fair” section of the fishing zone will be unusable for a period of time. Also, fish are not necessarily evenly dispersed; rather, they find habitats and live in groups, or schools. The paths traveled by schools are not necessarily orderly nor evenly spaced. One area may have more fish than all others combined. So, instead of selling off the water into smaller fractions of property, it is more effective and fair to regulate it.
Overfishing is a phenomenon experienced in nearly all fishing communities, simply because the lack of resources calls for obtaining as much as possible. By prohibiting nets and other large scale capturing devices, you severely decrease the rate at which fish are caught. Another similar regulation is limiting time at sea. Less time at sea decreases the amount of fish captured, thus preventing the rapid depletion of fish.
Professor Green, with a specialization in economics, discusses the advantages of regulating the fishing industry.
Professor Green, with a specialization in economics, discusses the advantages of regulating the fishing industry.
The forestry industry presents another strong case for a regulated system for the advancement of resource optimization. A quick depletion of trees would physically prohibit their reproduction, or at the very least impede the process of replenishment. Rather than clearing a region, many loggers will instead use the plan of selective cutting. By using this method, the lifespan of the forests are stretched in comparison to clear cutting.
(Green's explanation for the regulation of logging)
Clear cutting occurs when all of the trees in a region are cut down in one session. This action allows immediate maximization of efficiency, yielding incredible instant economic benefits. This unregulated efficiency is doomed to self destruct because of the disregard for the continued available of those resources in the long term. It is only a matter of time until shortsighted practices such as clear cutting destroys the forest beyond repair.
Selective cutting is the practice of cutting down a certain amount of trees in an area for a certain amount of time. This helps to ensure that the long term viability of the forest will not be compromised. Regulating this process does not yield the instant “jackpot” effect of clear cutting; however, by selectively cutting we can spread the economic benefits over a longer period of time, eventually making up for - and far exceeding - the difference of the original earnings. The incentive of greater long term success drives responsible and forward-thinking members of the logging industry to take the path of selective cutting.
The Oil Industry's Turmoil Demonstrates The Flaws of Privatization
Privatization in the oil industry offers a cautionary tale in the area of resource management. The efficiency, or initial success, is uncontrolled, allowing those in the market to use and exploit the available resources at limitless rates. This form of distributing goods has been historically proven to test and crumble peoples’ moral and ethical strength, leading them to act in ways detrimental to others’ well being as well as undermining society’s implied code of conduct set in place to maintain cooperation and coexistence. The main goal of privatized systems is to obtain as much of a resource as possible in order to sell as much as possible, to achieve the ultimate goal of maximum monetary success.
In a regulated system, many of the major restrictions are geared toward slowing down the rate of gathering and using resources. Because this is a profit driven industry, the primary motivations of business owners are financial, often conflicting with notions of conservation and sustainability.
In a regulated system, many of the major restrictions are geared toward slowing down the rate of gathering and using resources. Because this is a profit driven industry, the primary motivations of business owners are financial, often conflicting with notions of conservation and sustainability.
If oil was regulated and distributed by the
government, there would likely be a more environmentally-conscious approach to their work. The government is charged with ensuring the long term well-being of its citizens and environment, whereas a private corporation is not. The government would be obligated to act in a more moderate fashion because of its responsibilities and moral necessities, free of the pressures corporations and their managers often face to produce short term results.
Much of the issue of lack of resources has been expedited by misuse and exploitation of available resources. These actions are seemingly beneficial to those who obtain the immediate benefits of their actions, but this short sighted mindset could not be more inversely effective. As much as avoiding Prisoner’s Dilemmas can help alleviate the Tragedy of the Commons, the reality of privatizing these goods leaves individuals facing these dilemmas at a consistently high rate. The alternative method of regulating these resources from a governmental or objective committal stand point has been proven to work more effectively than privatizing them.
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