PHILOSOPHY – Rational Choice Theory: Tragedy of the Commons [HD]


(intro music) Hi! My name is Jonny Anomaly, and I teach
at Duke University and UNC Chapel Hill. Today, I’m gonna talk about the
Tragedy of the Commons. Let’s start with an example. When Polynesians arrived in Hawaii over a thousand years ago, they
encountered a flightless bird which archaeologists now call “moa-nalo,” the Hawaiian words for “lost bird.” Because the birds had no natural
predators, they lost the capacity to fly and were easy prey for hungry Hawaiians. All Hawaiians would be better off preserving enough birds to replenish
the natural stock of food, but since the birds were an unowned
resource, each Hawaiian had a strong incentive to eat the
bird into extinction, and that’s exactly what they did. Commons tragedies occur when resources
are either unowned or commonly owned, and when the benefits of
use go to each person while the costs are shared
by everyone in a group. To make the previous example precise, suppose there are twenty Hawaiians. Each Hawaiian gains five utility points
from killing and eating a bird, while all Hawaiians as a
group lose ten utility points every time another bird bites the dust. Since my fraction of the collective
loss to twenty people is only half a utility point,
but I gain five points, I get four and a half points, on
net, by killing endangered bird that I would prefer to preserve. The most interesting thing about commons tragedies is that, like the
prisoner’s dilemmas, they show that it can be fully rational
for each member of a group to act in a way that leaves everyone in the group worse off than they
would be if they could cooperate. Notice that common strategies,
like prisoner’s dilemmas don’t necessarily arise
because of self-interest. I may hunt an endangered species so that I can feed my family and friends
or donate the meat to some other cause that I consider worth promoting. So, how do we avoid commons strategies? The most common solution is property
rights, which lead individual owners to internalize both the
benefits and the costs of their use a scarce resource. John Locke and David Hume saw this is a crucial function of property rights. Property rights can be used to preserve
scarce resources, like endangered species. But they can also be a tool for
increasing social welfare by incentivizing the production
of new and better resources. Since most productivity gains come
from ideas for transforming existing resources into new products, intellectual property is an especially important form of
private property rights. It is easy to see how ownership over
external objects would induce owners to preserve and
improve natural resources. But intellectual property, ownership
over ideas, is a bit more subtle. While there’s quite a bit a controversy about how efficient particular systems
of intellectual property are, many economists believe that without
allowing people to own ideas, they would have less incentive to conduct
costly research and development campaigns to create new medicines, new kinds of
computers, or new genres of music. All of these ideas create social value. But without the right to take exclusive ownership over the ideas,
at least for a while inventors would not be able
to recoup the time and money they spent coming up with them. Still, private property is not a panacea. Property rights are costly to enforce, and they
may stymie innovation in certain domains. Consider the problem of patent trolls, people
who make their living buying patents with no intention of using them. Patent trolls sue companies that use technologies which resemble
the patents they’ve purchased. In many cases, companies find it cheaper
to pay off the patent trolls than to wage a costly court battle against them. This leads to a misallocation of resources
and rewards people who make money without producing any real value. Property rights have to be
enforceable to work well. Enforcement is costly, since it requires
monitoring violations, prosecuting violators, and settling disputes. Some countries are too poor to be able to monitor property rights effectively,
and others are too corrupt. In these cases, Elinor Ostrom has shown that local commons tragedies, like
overfishing a lake or overgrazing cows on a common pasture, can sometimes
still be solved by communities. In place of formal property
rights and court adjudication, members of small communities often rely
on social norms that determine how property can be acquired,
used, and traded. People who violate local property norms
are ostracized, or excluded from enjoying important social benefits. In these cases, our concern
for a good reputation and for the benefits of living in a community can solve commons tragedies, but only when monitoring
social norms is cheap and group cohesion is strong. I’d like to end with a challenge for you. Think about a commons trategy witnessed in the last month, and try to
figure out why it hasn’t already been solved through social norms
or through legal sanctions. Subtitles by the Amara.org community

12 comments

  1. Great video, one of the best quality I've seen from wiphi so far (and what a great name "Jonny Anomaly"). Also a subject close to my heart after working some time in research and becoming totally disillusioned by the patent system. Anyone that thinks patents are a good idea need only ponder for a few moments to see that it's supposed to protect the smaller people from the large corporations but in fact it does the opposite.

    One thing that needs changing right now is the intellectual property rights should never be transferable. If an inventor/song writer/whatever dies then the ideas go into the public domain.

  2. So essentially, we need to create strong global cohesion, and eliminate scarcity as much as possible! – A Resource Based Economic Model?

  3. Makes the mistake of confusing Common Ownership will Common Use.

    Common ownership means owning an equal share of the value derived from that resource.

    For example, if a State gets royalties from leasing mineral rights for public revenue, this is common ownership.

    Also, the moral case for intellectual property and patents isn't clear cut. The laws of nature dictate that new ideas are not so much invented but discovered.

    Being first to discover is rewarded by being the first to capitalise that new idea.

    IP and patents in this sense are State granted monopoly privileges that harm the rate of progress and are not in the consumer interest.

  4. You seem to completely mix up Commonly owned from State owned. Elinor Ostrom has pointed out very distinctly that there are various ways in which large amounts of people can own land and collectively manage it correctly and keep it sustainable.

  5. The age of property rights is the age we live in which has been the most destructive and wasteful age of man. This is more ideology than factual

  6. How does this work then for preserving things that don't have a profit value to being preserved? Selling a public forest to a private company does nothing to ensure that the private company won't just log all the trees. For me this is the biggest fault in this argument and might be one of the biggest problems the world faces today. Seems like regulation rather than ownership is the only solution I can see.

  7. The tragedy of the commons is actually a tragedy of "no man's land". The difference should be obvious:
    -The commons belong everyone; the "no man's land" belongs no one.
    -For the commons are the municipality responsible; for the "no man's land" nobody.
    -For the commons there are usage rules which are established and monitored by the municipality; for the "no man's land" there is nothing like that.

    In addition, here is an excerpt from "Theorien alternativen Wirtschaftens" by Gisela Notz (translated by me):
    "In economics, it is referred to as" tragedy of the commons", that their general use leads to their overuse or damage, since the people are not able to regulate social sharing, that is: What belongs to everyone, seems no one to be worth something. Single individuals use public goods unduly at the expense of all. The neoclassical economics concludes that the solution of environmental problems is impossible if the market and the state fails. By contrast, Ostrom turns. She believes that institutions can crucially contribute to disarm this "tragedy of the commons". As part of case studies, on the use of community pastures, irrigation systems and fishing grounds, that she has created for research, she found a lot more examples of successful community usage of property as the contrary. She highlighted it with works from geologists, historians and anthropologists. Their conclusion is that not privatization and market mechanisms, nor government controls and rules are useful for a sustainable, durable successful use of common goods because both threaten harmful overuse. "Institutionalized regional cooperation of stakeholders on the municipal or cooperative level", (i.e. Commons) would function better. Ostrom warns to wait for global solutions (e.g. a global climate agreement); real opportunities to act have to be tested at the local level. However, she calls for clear principles, which are determined and monitored by all participants in common, for the management of common resources. The use of mild penalties for violations is not ruled out. She refers to on self-organized local groups of the alternative economy, which have crosslinked globally – in the cities, in the regions of the USA and Europe and also in developing countries. Alternative-economic ecology-oriented projects have followed mainly the important task of collecting experimental experience of the careful use of the commons on a networked level. The increasing privatization and expropriation-processes of Commons confronts the actors also with new tasks. Finally, it is important to produce new Commons, namely in the material and immaterial area.
    Inspiring for this purpose is also the theoretical approaches for an economy beyond commodity production and the market (so-called peer-economy). Peer-production always takes place in communities, where people in an open, never completed process determine the rules, organization- and institutionalization form, which correspond best to the attainment of their aims. In free cooperation, these self-organized communities manufactures products that are usually commons and freely available to all (or at least for all involved in the project). Anyone who have been involved in alternative economic projects knows, that joint production can make fun and that it can be pleasant and satisfying."

  8. On the free market, the Customer is also a resource !
    WOW ! I JUST REVOLUTIONIZED THE WORLD'S ECONOMIC THOUGHT  ! BANG, BANG !
    Don't you think?
    You should feel privileged for being exposed to this idea.

  9. Democracy is the original commons problem. The allocation of resources and implementation of ideas will always come at the cost of the marginal interests. The wellbeing of subcultures are speed bumps to magarity vehicle. Pure democracy is an unchecked hunter of minority opinion. Only with the coupling of a democratic republic do we stand a chance at being a little more balanced. While I despise the reason for the institution of the electoral college, I do understand the principle of representational concern. I do appreciate the desire to not turn our country into a giant stripmall selling to one demographic. It is important that we not decimating a culture that has less numbers.

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