The
tragedy of the commons was a concept put forward by a biologist but Garrett Hardin’s
underlying assumptions, when he developed it, are drawn quite distinctly from
economics. As Elinor Ostrom, who shared a Nobel Prize in economics for
her efforts in challenging the idea of the 'tragedy', noted while Hardin was a
biologist, he shared the assumption of most economists that human beings focus
on personal gain and found cooperation between each other difficult. She noted that Hardin echoed the logic of the distinguished economist, H. Scott Gordon, who had argued
that,‘The fish in the sea are valueless to the fisherman, because there is no
assurance that they will be there for him tomorrow if they are left behind
today (2009: 522).
While economists claim that their
subject is a 'value free' social science, their critics argue that it is based
on particular beliefs that may be open to discussion and interpretation.
These are worth briefly outlining if we are to understand the strengths
and potential weaknesses of such a way of examining commons. The word ‘economics’
is derived from the study of 'oikos' the ancient Greek word for a household.
According to the well-known definition from Professor Lionel Robbins,
economics 'is the science which
studies human behavior as a relationship between given ends and scarce means
which have alternative uses' (1932: 16). Economists focus on concepts
such as choice, resources, rationality and opportunity cost, all of which are
seen as neutral rather than culturally determined and can be applied
universally to different human societies. It is assumed that human being
need to make choice, in fact, the concept of choice is perhaps the essence of
economics. Resources that can be used to produced goods or services can
be used in different ways. We must choose how to use such resources.
Opportunity cost is the notion that when one choice is made, other
choices are given up. The choice or choices not made are the opportunity
cost. There is a strong assumption of 'rationality', within economics,
which stresses that individuals pick the alternatives that provide them with
the most personal gain. Thus Erik
Olin Wright notes, 'economists
assign a privileged place to self-interested rational action in their
micro-level explanations of social phenomenon, and thus give central weight to
the problem of incentives in explaining variations across contexts' (2008:
235).
Implicit
in economics is the notion of methodological individualism, which the political
philosopher Jon Elster has defined in the following terms, 'The elementary unit of social life is the individual human
action. To explain social institutions and social change is to show
how they arise as the result of the actions and interaction of individuals'
(Elster 1989: 13). The interaction of communities is largely ignored by
economists who may find it difficult to understand collective forms of property
and communal action.
Economists argue that individual choice determines
outcomes, for example, if more consumers are prepared to pay for a product,
such increased demand tends to push up the price. In turn price increases
tend to increase profits and motivate producers to provide what consumers
desire. Individual preferences based on the need to gain the maximum
personal benefit drive the economic system. Individuals compete to try
to achieve the greatest personal benefit. The commons, in its varied forms, seems to cut across many of
these assumptions because of the apparent free rider problem. Garrett Hardin and
others critical of common pool property arrangements, argue that in a commons
individuals will take advantage of others, who might conserve a resource, by
using it more intensively. Apparently selfish behavior from a 'free
rider' is perversely rewarded and economists assume that an individual cannot
trust other individuals to conserve shared ground. Thus those who act
ethically and attempt to promote sustainability, say by removing their cattle
from the commons, will see the commons destroyed if others continue to put
their cattle on. The rational individual may even put more cattle on the
commons, exploiting the good action of the supposedly moral individual. Self-interest
pushes ethical action to the margins and, as Garrett
Hardin argued, means that commons must be
eliminated if land is to be sustained ecologically. Thus he
sociologist Erik Olin Wright suggests that for economists 'a
well-maintained commons is a puzzle' and as such 'cries out for an
explanation'. He notes that economists tend to be surprised and confused
that commons might work (Wright 2008: 234).
In contrast, Elinor Ostrom has used assumptions of
broadly rational methodical individualism to suggest that in particular
circumstances commons can be maintained to sustain shared prosperity.
Given particular conditions it is possible for the bounded commons,
particularly on a small scale basis to be preserved. Individuals can join
together and agree to maintain conservation processes, especially where
sanctions can be applied and rules are mutually agreed rather than imposed by
outsiders. The commons, can as Elinor Ostrom argues, in many
circumstances be an economically rational solution to resource management.
Elinor Ostrom might be seen as moving beyond economics in
her largely 'economic' account of commons, certainly there are number of
reasons to see her approach as more sophisticated and flexible than previous
attempts by economists to analyze common pool property.
However, she has been criticized as an 'economic
imperialist' who applies the notions of traditional economics to areas of human
life where they are inappropriate, rather than making economics more cultural,
she might be seen as making social and cultural matters part of the
economic approach of costs, benefits and rational maximizing behavior
(Fine 2010). Ostrom's approach to economics is quite complex
and it is important to understand her theoretical approach developed with her
husband Vincent if we are to assess her description of commons in terms of its
relationship to questions of culture.
The
Ostroms are various described as members of the 'Bloomington School' or 'New
Economic Institutionalists' or as advocates of ‘institutional analysis and development’ (IAD).
Bloomington refers to the main Indiana University campus where the
Ostrom's were both based. 'Institutional analysis and development' is the
particular variant of New Economic Institutionalism (NEI) developed by the
Ostroms. NEI is a product of market based economics; it is rooted in the
thought of individuals like Austrian economists such as Friedrich Hayek and Ludwig
von Mises whose assumptions seem much closer to those of Garrett Hardin than
Ostrom (Aligica and
Boettke 2009). Indeed, as we have seen Ludwig von
Mises specifically criticized the notion of common pool property. Elinor Ostrom was even a President of the Public
Choice Society, public choice is an approach to governance which is strongly
critical of the state and advocates market based policies such as privitization.
Rational choice theory is at the heart of public choice theory and NEI,
an approach which seeks to extend economic reasoning, based on costs and
benefits, to sociology to explain human behavior outside areas normally covered
by economics. Elinor and her husband
Vincent did not abandoned the rational choice theory that underpins public
choice but took it in a new direction. NEI
is based on the assumption that rationality is 'bounded' i.e. individuals
follow self-interest but within a particular context shaped by particular
values and circumstances.
Thus
the New Institutionalists explicitly bring in the influence of particular
institutions and varied culture. From their perspective they build on concepts
such as rational choice but apply them in what they see as a messy, complex and
often rather irrational world. From the perspective of much traditional
economics this is boldly radical, from that of disciplines such as sociology
and anthropology it remains rather conservative. Maximizing behavior
continues to drive the models used, rather than alternative goals.
Elinor
Ostrom argues that property rights are not simply 'state' or 'private' and
that, in many circumstances, it is impractical to replace commons with private
property. Through negotiation and learning individuals can often get
together and find ways of managing common property so that, through collective
action, individuals can maximize their net collective benefit. From her
perspective, failure to work out common rules and apply them would lead to the
destruction of the commons, so self-interest is served by establishing
consensual frameworks. Such consensual construction of effective
rules may, according to Ostrom, be difficult to achieve in some circumstances,
but is far from impossible. The approach of unrefined rational
choice theory that suggests that cooperation is virtually impossible, because
of the Prisoners’ ’ dilemma and similar models that invoke the free rider
problem is rejected by Ostrom.
The
Icelandic economist Thrainn Eggertsson sums up the neo-institutional approach
to commons noting that commons are often efficient economically but their
relative benefits depend on social and political factors as well as pure economic
considerations(1993:20).
This is approach is a form of
political economy, in that political assumptions and institutions are seen as
shaping economic decision making. The rules depend on the institutions
constructed and institutional design is a political act. Even at the
level of a Japanese village or indigenous territory in the Ecuadorian Amazon,
the politics of rulemaking and negotiation is apparent. This approach is
based on the development of particular cultures, which are refined, transmitted
from generation to generation and evolve over time. Such cultural
foundations of an economic system are usually ignored by economists but are of
vital importance to both Ostroms and to other institutional economists.
There is also a good article here from the Economist magazine on the commons.
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