The Tragedy of the Commons

Table of Contents

The Tragedy of the Commons
- Notes from the book “Predictably Irrational”
- Overview

The Tragedy of the Commons

Notes from the book “Predictably Irrational”

This phrase can be traced back to Oxford professor William Forster Lloyd, who described the phenomenon in his 1833 book on population. He noted that

in medieval England, parishes had common land on which each member of the community could graze a limited number of cattle and sheep.* Keeping the number of animals low allowed the grass to grow back at a speed that kept its level more or less the same. This approach was rather successful when all the farmers stuck to the rule. Unfortunately, in their selfish desire to improve their own financial situations, some of the farmers increased the number of their animals to a level that the land could not sustain. This strategy was very good (at least in the short run) for the individual farmers who had more animals, but each additional cow or sheep resulted in less grass for all of the animals. As the grass dwindled, all the livestock on the commons became malnourished and underproductive - a result that hurt everyone, including the greedy farmers.

When we all cooperate, trust is high and the total value to society is maximal. But distrust is infectious. When we see people defect by lying in their advertisements, proposing scams, etc., we start acting similarly; trust deteriorates, and everybody loses, including the individuals who initially gained from their selfish acts.

If we start to think about trust as a public good (like clean air and water), we see that we can all benefit from higher levels of trust in terms of communicating with others, making financial transitions smoother, simplifying contracts, and many other business and social activities. Without constant suspicion, we can get more out of our exchanges with others while spending less time making sure that others will fulfill their promises to us. Yet, as the tragedy of the commons exemplifies, in the short term, it is beneficial for each individual to violate and take advantage of the established trust.

Overview

The Tragedy of the Commons describes how individuals, acting selfishly in their own interest, deplete or spoil a shared resource (a “commons”) to the detriment of everyone, like overfishing oceans or causing traffic jams. Popularized by Garrett Hardin in 1968, it shows that while each person benefits from using more, the collective overuse leads to resource collapse, harming the whole group. Solutions involve privatization, government regulation (quotas, taxes), or community-based management to encourage sustainable use.

Core Concept

Shared Resource: A resource accessible to many people, such as grazing land, fisheries, clean air, or groundwater.
Self-Interest: Each individual user gains more by taking slightly more than their fair share (e.g., adding one more cow to the pasture).
Collective Ruin: When everyone acts this way, the resource becomes overused, damaged, and eventually unusable, hurting everyone.

Examples

Overfishing: Fishermen catch too many fish, leading to fish stock collapse (e.g., Grand Banks cod).
Traffic Congestion: Everyone drives their own car for convenience, creating gridlock and pollution for all.
Deforestation: Companies clear forests for timber or farming (like palm oil), destroying habitats and impacting global climate.
Groundwater Depletion: Farmers pump too much water, lowering the water table faster than it can replenish.

Solutions & Approaches

Regulation: Government imposes rules like quotas, licenses, or taxes (e.g., pollution permits).
Privatization: Dividing the commons into private property so owners bear the full cost of overuse.
Community Management: Local communities develop their own rules and norms for sustainable use, as studied by Nobel laureate Elinor Ostrom.
Education & Awareness: Informing people about the consequences of their actions to encourage responsible behavior.