Summary: The Tragedy of the Commons is an economic theory that describes how people often use natural resources to their advantage without considering the good of a group or society as a whole. When a number of individuals consider only their own welfare in this manner, it leads to negative outcomes for everybody, as the natural resource becomes depleted.
Originators: William Forster Lloyd (1794-1952), Garrett Hardin (1915-2003)
Keywords: resources, natural resources, depletion, over-use, the commons, exploitation, pollution, over-fishing, deforestation, global warming, government regulation, taxation, public property, private property
In 1833, William Forster Lloyd wrote a short pamphlet detailing the concepts behind the economic theory known as The Tragedy of the Commons. The contents of this pamphlet were mostly unknown until 1968, when Garrett Hardin wrote an article in Science magazine that brought Lloyd’s work into the spotlight.[i]
Understanding this economic theory requires a working definition of what is meant by “the commons.” “The commons” includes any natural resources that are not owned by an individual or corporation. Rather, these resources are available for public use. This might include public pasture land, lumber, oil, the oceans, the atmosphere, wildlife and fish, and many other common resources.
The Tragedy of the Commons describes how people often take advantage of resources that are freely available to them. Often, they don’t consider the fact that if everyone over-uses the resource, this will lead to negative effects for everyone, including themselves.
The famous example given by Hardin (1968) includes pastureland that people use to graze their cattle. Herdsmen who operate under The Tragedy of the Commons don’t consider how excessive grazing or adding additional cattle to their herd will impact other herdsman or everyone as a whole in the long run. The more herdsman who only consider their own herd and profit, the more the pasture is run down and the more all of the herds suffer. As Hardin (1968) put it, “Freedom in a commons brings ruin to all.”
The Tragedy of the Commons is relevant to many current issues.
National Parks are often cited as a prime example.[ii] More and more people have visited the U. S. National Parks since WWII, leading to concerns about the exploitation of environmental resources.
Overfishing is another relevant topic.[iii] Many bodies of water including oceans, lakes, and rivers, are open to the publish for fishing. This has led to many species of fish becoming endangered and many fisheries finding themselves in trouble. Increased regulations and privatization of certain bodies of water has led to improvements in this area.
Pollution and climate change have also been cited as an example. [iv] The atmosphere can be seen as a global resource, and as people fail to limit the amount of pollution they produce, everyone is affected by the resulting climate change.
Other problems that some people have connected to The Tragedy of the Commons are deforestation, overpopulation, depletion of gas and oil reservoirs, and harm to ground water.
Several solutions have been proposed to offset negative outcomes related to The Tragedy of the Commons.[v] In general, solving this problem requires collaboration and cooperation as people come together to preserve resources for the good of all. Regulation and taxation by the government can limit the effects people have on certain resources. Informal or formal property rights can be given to individuals or groups to restrict peoples’ over-use of other resources.
[i] Hardin, G. (1968). The tragedy of the commons. Science, 162(3859), 1243-1248.
[ii] Wozniak, S. & Buchs, A. (2013). U.S. national parks and “the tragedy of the commons”. Journal of Alpine Research, 101(4).
[iii] Benjamin, D. (2001). Fisheries are classic example of the “tragedy of the commons”. PERC Report, 19(1).
[iv] O’Gorman, M. (2010). Global warming: A tragedy of the commons. Comparative Research in Law and Political Economy, 6(7).
[v] Libecap, G. D. (2008). The tragedy of the commons: Property rights and markets as solutions to resources and environmental problems. The Australian Journal of Agricultural and Resource Economics, 53(1), 129-144.