What is the Tragedy of the Commons?

In 1968, Garrett Hardin coined the phrase, the Tragedy of the Commons. Almost half a century later, we’re still fouling our own nest without a workable solution.

Earth is reaching a tipping point. The population is growing, and people are living longer, but the critical shared resources needed to sustain the planet are being destroyed in slow-motion acts of collective cognitive dissonance. The human race is fouling its own nest, so much so that the wealthiest are in a race to get off the planet and start again somewhere else – welcome to the Tragedy of the Commons. 

Origin of the Tragedy of the Commons?

Garrett Hardin coined the phrase, the Tragedy of the Commons, in a seminal 1968 essay, arguing that the rational behaviour of individuals using a common resource, like fishing in a lake, would paradoxically ruin it for everyone in the long run through overfishing. 

Over half a century and 4 billion more people later, Hardin’s controversial perspective on man’s inability to act as a responsible custodian of the planet’s shared assets couldn’t be more relevant. 

From climate change to urban pollution, the cognitive dissonance that allows each person and each nation to maximise their individual benefit from common resources, knowing that they will ultimately suffer the collective consequences of their decisions, is as strong as ever.

Garret Hardin’s overgrazing thought experiment

Hardin used the simple example of an open pasture and the behaviour of herdsmen seeking to graze their cattle to illustrate the Tragedy of the Commons.

If each herdsman acts in their rational self-interest, which you can only expect them to do, they will try to keep as many cattle as possible grazing on the common land. 

Hardin gave his hypothetical situation no particular parameters but assumed the situation would work in everyone’s favour up to a critical tipping point.

[grazing would] work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land.

The Tragedy of the Commons, Science, New Series, Vol. 162, No. 3859 (Dec. 13, 1968),

But eventually, a day of reckoning comes when the goal of social stability, counteracting war, poaching and disease, becomes a reality, removing the forces that kept the pressure on the pasture in check. 

Technological progress has enabled some nations to reach this point faster than others, and the consequences of rapid but uneven industrialisation haven’t been thought through. 

So rather than bring harmony and sustainability, social stability and the rational drive to maximise our individual benefit from the commons, to use Hardin’s own words, ‘remorselessly generates tragedy’.

• If you like this article, find out what rent-seeking is.

No technical solution problems

And even without the foresight to predict how far technology would advance in the fifty-odd years after he published his ideas, Hardin knew that we couldn’t invent away our natural tendency to foul our nest. 

He described the Tragedy of the Commons as a ‘no technical solution problem’ or, in other words, something that wouldn’t simply be solved by science. 

All the evidence suggests he was right. The computing power that put a man on the moon three years after Hardin’s essay is now dwarfed by hand-held phones, and in just six months, advances in AI suggest AGI (artificial general intelligence) with all its associated benefits (and risks) could soon be a reality.

Yet, with all this scientific progress, recent reports suggest we’ll breach the crucial 1.5-degree increase in global temperature by 2027. UN agency says El Niño and human-induced climate breakdown could combine to push temperatures into ‘uncharted territory’

To put the logic of his no technical solution concept into perspective, Hardin used the example of tick-tack-toe, a game with no technical solution, because after learning how the game works, both sides simply cancel each other out. 

The only way to gain an advantage is outside of the rules of the game by coercing, threatening or distracting your opponent.

Hardin believed the same was true of the Tragedy of the Commons. That external intervention was needed because rational action combined with population growth would, like tick-tack-toe, only lead to a ruinous stalemate, which is broadly what happened at the latest climate summit COP26 in Glasgow.

Why the Commons end up being ruined

Returning to Hardin’s example, we can look at the mechanics of the dilemma to understand the road to ruin.

Each herdsman seeks to maximise his gain, thinking, “What is the utility to me of adding one more animal to my herd and letting it graze on the common pasture?“

Pro

• The herdsman receives all the proceeds from the sale of the additional animal (+1)

Con

• It creates additional overgrazing, but all the herdsmen share the impact, so the negative utility to the individual is only a fraction of that associated cost. 

Based purely on this rational cost/benefit assessment, the only sensible course for the herdsman to pursue is to add another animal to his herd.

The problem is that the herdsman’s logic doesn’t factor in the impact of everyone else thinking in exactly the same way.

The same logic leads an individual to enjoy the utility of an additional international flight, putting more rubbish in a landfill or driving a polluting car, despite all these actions collectively creating ruinous problems; this phenomenon is otherwise known as the free-rider problem. 

And it applies equally at scale, with each country evaluating whether to continue burning fossil fuels, over-farm or exploit the oceans.

It seems there is a fatal flaw in human reasoning that leads us to self-destruct, which some scientists have even suggested is why we haven’t found other intelligent life, in a theory coined by Robin Hanson in 1998 called the Great Filter.

What is the solution to the Tragedy of the Commons?

Back in 1968, Hardin suggested several social solutions to the no technical solution problem he had discovered.

1. Privatisation – Auctioning off common resources, then letting the market establish a fair value to retain access/use.

2. Allocate access rights – keeping the commons public but restricting access based on some parameter, such as means testing, an auction, merit, random selection or first-come-first-served.

So what’s the track record of these proposed solutions? We can look at some examples to find out.

Britain’s Sewage Problem

In 1989, management of the UK’s water system was privatised as part of a wider plan by the Conservative government to put national industries up for sale.

Rail, gas and telecoms were all privatised alongside water, with the expectation that the market would bring efficiency, just as Haddin imagined.

In the case of water, the biggest challenge facing private franchises that were each allocated regional monopolies was upgrading the Victorian sewerage systems that caused vast amounts of raw sewage to end up in rivers and coastal outflow.

Fifty years later and the required investment that has continuously been promised is yet to emerge, despite massive yearly profits, shareholder dividends and executive bonuses.

The scale of sewage pumping is unprecedented, and such is the public outcry that re-nationalisation is trending on social media.

Despite sewage been dumped into the environment for 7,519,523 hours on 1,076,795 separate occasions over the last 3 years just 4 water companies have been prosecuted by the @EnvAgency.

Now you know what regulatory failure looks like.https://t.co/cBF1MWY6It

— Feargal Sharkey (@Feargal_Sharkey) May 30, 2023

Though the Water Companies clearly have a case to answer, the problem is more complex than their greedy abuse of monopoly on a fundamental natural resource.

Climate change, failed regulation, the rapid urbanisation of the natural environment, agri-farming and household water consumptions all have a part to play. This is perhaps the problem with Haddin’s expectation that the markets would do a better job of protecting resources than common ownership. 

The complexity of managing rivers, water networks and the coastline is just too great to expect fragmented private businesses to come up with a joined-up strategy.

Regulators, politicians and national oversight agencies should have provided oversight and enforcement, but all have failed miserably for a whole host of separate reasons that cast serious doubt on whether the market can really be trusted to solve the Tragedy of the Commons.

Right-wing thinkers and Austrian economists might argue that the markets haven’t been free enough, but water isn’t an isolated case.

• Rail franchises have failed to properly invest in new rolling stock or infrastructure, yet tickets rise above inflation each year.
• The shock to the UK energy market by the Russian invasion of Ukraine has exposed the vulnerable to rocketing prices, while energy companies post record profits.

• At the global level, climate change has exposed the failure of common ownership & coordination despite the threat of human extinction.

The tragedy of the virtual commons

Though Hardin never mentioned it in his paper, the Tragedy of the Commons equally applies in the metaphysical world.

Second Life is considered the original Metaverse experience, open to all, with minimal rules and no particular purpose than virtual exploration.

Turns out societal behaviour didn’t improve in the Metaverse, with users griefing each other and the system. The ‘flying penis attack’ became the most common method, while there was a virtual riot in 2007.

Gambling & Sex quickly became the most popular industries/activities, creating issues around regulation and censorship; casinos were banned in 2007, and Second Life never recovered from its peak usage.

The tragedy of common money

Money is effectively a common tool, a social construct that allows us to move beyond finding the 1,600 calories a day that Hardin described as subsistence to apply our energy to what we call work.

Despite money as a concept theoretically sitting in common ownership, the government decides how it is managed, following the second of Hardin’s solutions to avoid common ruin – gated access.

But like our polluted waterways, money came close to collapse in 2008, with bankers acting entirely rationally by maximising their profit, knowing losses are socialised by the wider community, ignoring the potential for destroying the entire financial system and taking everyone down, them included.

Though not a direct response to the 2008 financial crisis but more a consequence of the fiat monetary system’s failure, Bitcoin created a new form of money and a new type of commons model based on decentralisation.

A game-theoretical way to manage a monetary system without a central authority and ensure that participants act in the best interests of the system.

So does this new approach to social consensus offer a potential solution to Hardin’s tragedy? Unfortunately, not.

Because anyone is free to use this radical new peer-to-peer cash system, Bitcoin has experienced its own version of the Tragedy of the Commons, with what was described as the Block Wars from 2015-17, and more recently with Bitcoin’s version of NFTs incentivising short-term gain, over common use.

So it seems that in both the physical and metaphysical realm, self-interest leads to overall ruin. The ultimate free lunch is giving the human race chronic indigestion, but we just can’t stop being greedy.

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