Tragedy Of The Commons*

The Tragedy Of The Commons is a story used to illustrate the risk of owning things in common. It is meant to be a critque of communism in its basic sense. In the story a village is described that possesses a meadow as a piece of common ground. The villagers graze one cow per household on the commons. One villager buys an additional cow. He now grazes two cows on the common land. The land is only sufficient for 12 cows so the addition of one more animal causes the land to become over-grazed and milk production to decline on average though absolute output remains the same. The same amount of pasturage produces the same amount of milk but production is divided between a larger number of animals.

All the villagers experience a decline in milk production per cow but the additional cow provides the villager grazing two animals with an additional share of milk. The greed of the one and his willingness to place the cost of his greed onto others is rewarded with double the production of his neighbours who suffer a corresponding decline in milk production. 

The solution the writer gives is for the Commons to be privatized or the ownership of the commons be centralized under one owner. This is an odd remedy if we consider that it may be the villager who socialized costs onto his neighbours who obtains ownership of the commonland. His neighours would now have no place to graze their animals unless they rent forage land from the lands owner. Privatization leaves the village dependent on the greedy villager for their milk and meat supplies the same person who precipitated the need to privatize the land.

The addition of a cow to the common land steals value from the co-owners or villagers. This is free riding or socialism. Socialists do not appreciate the seriousness or consequences of social costs.  In reality and historically the errant villager would have been disciplined by the other 11 villagers who would not let one member deprive them of what was rightfully theirs. In the story when the land is sold or centralized under one owner the villagers are expected to find other forms of work and while historically this has happened as people leave farming to take up work in factories the process has not worked as well as it needs to if the privatization option was to be a viable option. The solution actually worsens the situation. Not only is the grazing potential of the land stolen the livelihood of the town is removed from the villagers. A better solution would have been for the villagers to tar and feather the wrong doer and seize his cattle selling one and keeping the other as part of the village common goods. This would had been done had the village been a free market.

What is not dealt with in the story is who privatizes this Commonland? How has the right to remove what belongs to all and consolidates ownership in a single persons hands? In reality the state does this but no one explains where it gets this right from.

The town ought to have sold their land to free market. What is called here a Free Exchange. This is accomplished by exchanging assets (land) for equity (shares in the Exchange). The title to the land is held by the Exchange and forms the equity of the Exchange. Each villager now has the value of the property in the form of a part ownership in the Free Market Exchange held as Preferred Shares plus each villager has one voting share or Common Share.

The land is an asset of the Exchange. Each villager owns one share of the business as well as possessing equity in the free marekt. This is issued as Preferred Shares and these can be used as a local currency for the purchase of goods and services. The care of the land and the care of the cows becomes the concern and responsibility of the Exchange. The Exchange can, with the consent of the shareholders put the responsibility for the land and other assets under the care of one manager the difference is the the value created by the Exchange is the property of the villagers.

The Exchange ensures that all use of the land is paid for, the villagers are customers as well as owners. A villager who wishes to graze an animal on the land or who wishes to use the land for other purposes pays the Exchange for this service. The manager of the land then has to ensure that the land is operated in the best interest of all shareholders. The income the Exchange makes is divided amoung the shareholders after expenses. If another animal is grazed on the land an additional fee is charged and this fee is such that it offsets the costs the use creates. Or, if the additional stress is regarded as potentially damaging the extra-use is disallowed or assessed such a high fee that it no longer benefits anyone to add additional animals to the herd.

The real tragedy of the commons is that its value became a liability. 


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see also High Seas and Private Ownership



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