The biggest roadblock standing in the way of many people’s recognition of the importance of the commons came tumbling down when Indiana University professor Elinor Ostrom won the Nobel Prize for Economics.
Over many decades, Ostrom has documented how various communities manage common resources—grazing lands, forests, irrigation waters, fisheries—equitably and sustainably over the long term. The Nobel Committee’s recognition of her work effectively debunks popular theories about the Tragedy of the Commons, which hold that private property is the only effective method to prevent finite resources from being ruined or depleted.
Awarding the world’s most prestigious economics prize to a scholar who champions cooperative behavior greatly boosts the legitimacy of the commons as a framework for solving our social and environmental problems. Ostrom’s work also challenges the current economic orthodoxy that there are few, if any, alternatives to privatization and markets in generating wealth and human well being.
The Tragedy of the Commons refers to a scenario in which commonly held land is inevitably degraded because everyone in a community is allowed to graze livestock there. This parable was popularized by wildlife biologist Garrett Hardin in the late 1960s, and was embraced as a principle by the emerging environmental movement. But Ostrom’s research refutes this abstract concept with the real life experience from places like Nepal, Kenya and Guatemala.
“When local users of a forest have a long-term perspective, they are more likely to monitor each other’s use of the land, developing rules for behavior,” she cites as an example. “It is an area that standard market theory does not touch.”
Garrett Hardin himself later revised his own view, noting that what he described was actually the Tragedy of the Unmanaged Commons.
Columbia University economist Joseph Stiglitz, also a Nobel winner, commented, “Conservatives used the Tragedy of the Commons to argue for property rights, and that efficiency was achieved as people were thrown off the commons…What Ostrom has demonstrated is the existence of social control mechanisms that regulate the use of the commons without having to resort to property rights.”
The Nobel Committee’s choice of Ostrom is significant considering that many winners of the prize since it was initiated in 1968 have been zealous advocates of unrestricted markets, such as Milton Friedman, whose selection helped fuel the rise of market theory as the be-all, end-all of economics since the 1980s. Policies based upon this narrow worldview sparked the rise of corporate power and the diminishment of government’s role in protecting the commons.
While right-wing thinkers scoffed at the possibility of resources being shared in a way that maintains the common good, arguing that private property is the only practical strategy to prevent this tragedy, Ostrom’s scholarship shows otherwise.
“What we have ignored is what citizens can do and the importance of real involvement of the people involved,” she explains.
A classic example of this is an acequia, a centuries-old tradition of a cooperative irrigation in New Mexico and Colorado where the small flow of water available for agriculture is allocated by the community as a whole through a democratic process.
Ostrom is the first woman to be awarded the economics prize, which some observers say helps explain her emphasis on the role of people’s relationships in our economic arrangements rather than the focus on individualized market choices expounded by many male winners of the Nobel.
Equally noteworthy is the fact that Ostrom was not trained as an economist, but as a political scientist—a factor that may be even more useful in explaining her outside-the-box approach to economics.
Yale economist Robert Schiller, quoted in the New York Times, welcomed the merging of the two fields. “Economics has become too isolated and stuck on the view that markets are efficient and self-regulating. It has derailed our thinking.”
Elinor Ostrom has always been explicit in recognizing the importance of the commons—she helped found the International Association for the Study of the Commons, also based at Indiana University—and her selection as a Nobel Laureate marks an early milestone in the emergence of a commons-based society. Her works shows that our social, environmental and personal advancement depends on the vitality of the commons.
The Non-Tragedy of the Commons, By John Tierney in the NYTimes.com, 15 Oct 2009
The 2009 Nobel Prize for economics is a useful reminder of how easy it is for scientists to go wrong, especially when their mistake jibes with popular beliefs or political agendas.
Elinor Ostrom of Indiana University shared the prize for her research into the management of “commons,” which has been a buzzword among ecologists since Garrett Hardin’s 1968 article Science, “The Tragedy of the Commons.” His fable about a common pasture that is ruined by overgrazing became one of the most-quoted articles ever published by that journal, and it served as a fundamental rationale for the expansion of national and international regulation of the environment. His fable was a useful illustration of a genuine public-policy problem — how do you manage a resource that doesn’t belong to anyone? — but there were a couple of big problems with the essay and its application.
First, Dr. Hardin himself misapplied the fable. Declaring that “overpopulation” was a tragedy of the commons, he warned that “freedom to breed will bring ruin to all.” He and others advocated a “lifeboat ethic” of denying food aid, even during emergencies, to poor countries with rapidly growing populations. But “overpopulation” was not even a theoretical example of the tragedy of the commons. Parents are not like the cattle owners who profit individually by adding cows to the pasture (while collectively destroying it). Parents, unlike the cattle owners, have to pay to feed and house and educate their children, and the high economic costs of children are one reason that birth rates have declined around the world — without any of the coercion discussed by Dr. Hardin and some other ecologists (like Paul Ehrlich).
The second problem arising from Dr. Hardin’s fable was the presumption that a commons needed to be regulated by national and international agencies. Dr. Hardin didn’t explicitly make that generalization in the essay — he noted that the tragedy could be avoided either by regulating the commons or by converting it to private property — but others in the environmental movement essentially drew that conclusion. Although some greens talked about the virtue of “acting locally,” major environmental groups lobbied in Washington for expanded federal authority, and they urged the rest of the world to follow the American and European example by creating national rules governing commons like forests and fisheries.
But too often those commons ended up in worse shape once they were put under the control of distant bureaucrats who lacked the expertise or the incentives to do the job properly. Dr. Hardin and his disciples had failed to appreciate how often the tragedy of the commons had been averted thanks to ingenious local institutions and customs. Dr. Ostrom won the Nobel for her work analyzing those local institutions. In an interview at the Mercatus Center at George Mason University, Dr. Ostrom discussed the damage that had been done by those who had supplanted the local institutions:
International donors and nongovernmental organizations, as well as national governments and charities, have often acted, under the banner of environmental conservation, in a way that has unwittingly destroyed the very social capital — shared relationship, norms, knowledge and understanding — that has been used by resource users to sustain the productivity of natural capital over the ages. The effort to preserve biodiversity should not lead to the destruction of institutional diversity. . . . These institutions are most in jeopardy when central government officials assume that they do not exist (or are not effective) simply because the government has not put them in place.
Another Nobel laureate economist, Vernon Smith, described her work in an interview with Ivan Osorio for the Competitive Enterprise Institute:
She’s looked at a huge number of commons problems in fisheries, grazing, water, fishing water rights, and stuff like that. She finds that the commons problem is solved by many of these institutions, but not all of them. Some of them cannot make it work. She’s interested in why some of them work and some of them don’t.
One example is the Swiss alpine cheese makers. They had a commons problem. They live very high, and they have a grazing commons for their cattle. They solved that problem in the year 1200 A.D. For about 800 years, these guys have had that problem solved. They have a simple rule: If you’ve got three cows, you can pasture those three cows in the commons if you carried them over from last winter. But you can’t bring new cows in just for the summer. It’s very costly to carry cows over to the winter—they need to be in barns and be heated, they have to be fed. [The cheese makers] tie the right to the commons to a private property right with the cows.
Letting cheese makers set their own rules is an example of what Dr. Ostrom calls polycentric governance. In the interview at the Mercatus Center, she explained the advantages of trusting locals:
The strength of polycentric governance systems is each of the subunits has considerable autonomy to experiment with diverse rules for a particular type of resource system and with different response capabilities to external shock. In experimenting with rule combinations within the smaller-scale units of a polycentric system, citizens and officials have access to local knowledge, obtain rapid feedback from their own policy changes, and can learn from the experience of other parallel units.
Here’s a paper by Dr. Ostrom on fisheries. Here’s a a report for PERC by Donald Leal that summarizes Dr. Ostrom’s research: “Her studies of well-managed, commonly-owned property show that well-defined boundaries, a strong community tradition, and absence of government interference can preserve resources.”
As Catherine notes, the comedian Larry David explains one way to avoid the tragedy of the commons in an episode of “Curb Your Enthusiasm.” Mr. David discusses the tradition requiring guests at a party to refrain from eating too many hors d’oeuvres at once. After your first helping, he says, you have to wait 20 minutes and make sure that the food isn’t disappearing too quickly before you go back for seconds. Does that qualify as polycentric governance?
By David Bollier in Forbes Magazine
In fact, as Professor Elinor Ostrom’s pioneering scholarship over the past three decades has demonstrated, self-organized communities of “commoners” are quite capable of managing forests, fisheries and other finite resources without destroying them. On Monday, Ostrom won a Nobel Prize in Economics for explaining how real-life commons work, especially in managing natural resources.
Contrived “prisoner’s dilemma” experiments have long purported to show the futility and irrationality of cooperation with others. But Ostrom’s work has shown that people can in fact develop systems of communication and coordination to work together to manage collective wealth. They can cultivate the reciprocal trust and social norms needed to allocate scarce resources fairly. They can devise effective rules and graduated sanctions for punishing “free riders” and vandals. A “tragedy,” while always possible, is hardly inevitable.
Ostrom’s landmark 1990 book, Governing the Commons: The Evolution of Institutions for Collective Action, explains how these principles play out in different contexts–among farmers in Valencia, Spain, who have managed water-irrigation canals for nearly 1,000 years, among Swiss villagers, who have sustainably managed alpine grazing meadows for centuries, and many others.
At a moment when the mysteries of environmental sustainability remain elusive, Ostrom’s scholarship has much to say. For example, if traditional government regulation is too blunt and unresponsive to local circumstances, Ostrom has proposed “limited-purpose governmental enterprises” that let participants work out the rules themselves, subject to certain overarching design principles (clear boundaries to the commons, participation by everyone affected, monitoring, etc.). Such approaches let people devise governance regimes that are tailored to the peculiarities of the local resource and can draw upon the commoners’ personal familiarity with it.
“Bureaucrats sometimes do not have the correct information, while citizens and users of resources do,” Ostrom recently told a reporter. The great virtue of the commons is that it can be a responsive, effective way to manage a resource in the public interest without command-and-control regulation and legalisms.
Perhaps the most vivid example of this scenario is the Internet. Thanks to a shared set of non-proprietary technical protocols that let different types of computers interoperate with each other, the Internet has become the largest, most robust commons in history. Anyone can form their own niche community to curate and share photos, music, videos, blog posts, research and much else.
Although Ostrom has not written extensively about the Internet and online commons, her work clearly speaks to the ways that people can self-organize themselves to take care of resources that they care about. The power of digital commons can be seen in the runaway success of Linux and other open-source software. It is evident, too, in the explosive growth of Wikipedia, Craigslist (classified ads), Flickr (photo-sharing), the Internet Archive (historical Web artifacts) and Public.Resource.org (government information). Each commons acts as a conscientious steward of its collective wealth.
People who do music remixes and video mashups have formed their own commons, as have scientists who publish their research in open-access journals managed by their disciplines rather than by commercial publishers. There are digital commons devoted to compiling “open textbooks” (Wikibooks), sharing university course curricula (M.I.T.’s OpenCourseWare) and assembling neuroscientific research strewn across the Web (the Neurocommons project), among many others.
A key reason that all these Internet commons flourish is because the commoners do not have to get permission from, or make payments to, a corporate middleman. They can build what they want directly, and manage their work as they wish. The cable and telephone companies that provide access to the Internet are not allowed to favor large corporate users with superior service while leaving the rest of us–including upstart competitors and non-market players–with slower, poorer-quality service.
In an earlier time, this principle was known as “common carriage”–the idea that everyone shall have roughly equivalent access and service, without discrimination. Today, in the Internet context, it is known as “net neutrality.”
Net neutrality is a key reason why the Internet has been so phenomenally generative. Because the Internet functions as a commons, it enables anyone to find others, strike up a collaboration and generate useful stuff without first having to pay a premium fee, raise capital or persuade a corporate gatekeeper that the idea is marketable. Unsuspected types of value can surface and develop easily, often evolving into new markets that disrupt entrenched businesses. Examples: open-source software, wi-fi, the Internet Movie Database and podcasting.
It’s an idea that Elinor Ostrom has spent her career documenting: With an appropriate policy architecture, the commoners can take charge of their own problems and devise their own rules and social norms to manage their shared wealth.
Now that the Nobel Prize has honored Ostrom’s pioneering research, it’s time to banish old prejudices about the “tragedy of the commons,” move beyond the stilted “government vs. market” debate and explore the rich promise of the commons.
Bollier is the author of Viral Spiral: How the Commoners Built a Digital Republic of Their Own and an editor at Onthecommons.org.