Rivers, oceans, lakes, open pastures, fish stocks, forests, wetlands . . . Yosemite, the Amazon jungle, the Great Barrier Reef . . . clean air and even the electromagnetic spectrum, which includes radio waves that enable broadcast communications . . . All these things constitute what are generally referred to as “the commons.” Since the emergence of homo sapiens on planet Earth 90,000 years ago, the species has availed itself of the variety of natural resources available. However, as the population increases and as technology allows for more efficient exploitation of resources, humanity has intensified the pressure on shared – and finite – assets. The principal challenge of humanity regarding the commons is how to utilize common resources in a way that enables people to benefit from them while sustaining them for future generations.
How would the commons be managed in a free society absent the political state? That is the subject of this chapter. Even people who believe that private enterprise can replace a variety of basic state functions from the postal service to fire protection may have difficulty envisioning how private enterprise could manage the commons equitably.
In 1968, Science magazine featured an article by ecologist Garrett Hardin entitled “The Tragedy of the Commons.” In it Hardin contemplates what happens to finite resources when groups of people share these scarce resources in common. Hardin describes a pasture “open to all” where “each herdsman will try to keep as many cattle as possible on the commons.” 1 While this is individually beneficial to each herdsman in the short term, in the long term, by trying to get his fair share while it’s still available, each will have contributed to the ultimate degradation of the pasture by overgrazing.
Hardin summarizes the issue as follows:
“Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.” 2
Since Hardin’s article there has been a great deal of debate about how to solve what he termed the tragedy of the commons. Some argue that the only way to prevent the degradation of the commons is to extend top-down, institutionalized state regulation of the commons; in other words, a strong state entity must enforce rules to manage common pool resources. Another school of thought asserts that for effective management and preservation, the commons must be privatized.
This chapter posits that state management of the commons comes with an enormous price tag and typically yields disappointing results. Moreover, state control is unacceptable no matter how desirable it may seem in and of itself because once a political state is launched its activities become, eventually, an all-powerful force for coercion and theft, with wars and taxes being the hallmark examples.
This chapter posits that the best means of dealing with utilization of the commons are the institution of private property rights and voluntary cooperative solutions arising spontaneously from resource users themselves. Before examining these solutions, let’s first look at what happens when management of common pool resources is left to the political state.
STATE MISMANGEMENT OF THE COMMONS
The facts show that the political state does a poor job in managing the commons – not just in the U.S., but globally.
China is an example. China’s air pollution is one of the more egregious – and visible – examples of commons mismanagement. According to the World Bank, in 2007 China had sixteen of the world’s twenty worst cities for air pollution. 3 If a strong central government is critical to protecting the commons, which includes the air we breathe, environmental stewardship in communist nations should be the best. However, just the opposite is true. In China, where the all-powerful state controls almost every aspect of personal and economic life, air pollution has risen to dangerous levels.
Turning to the Third World, in the poorest nations, environmental concerns factor very low on the list of daily priorities (if they factor at all). In Time Magazine’s list of the top 10 most polluted places on Earth, each of the 10 areas fall within an impoverished, communist, or formerly communist state. 4 Leaders in a few poor, developing nations have set up wildlife preservation programs, but these efforts have been generally ineffective. There is evidence that while government officials in these countries voice concern for wildlife, many are simultaneously profiting from illegal trade in wildlife.
The problems with state administration can be seen in the U.S. as well. The federal government owns huge amounts of forestland, but instead of being pristine oases of wildlife and natural ecology these forests are in terrible shape due to decades of mismanagement. For example, for many decades forests on federal land have been severely overcut. In some regions, entire ancient forest ecosystems on federal lands have been destroyed. 5
The Washington Post reported in 2004 that a large area of the Tongass National Forest in Alaska was clearcut, and that trees had been left to rot – all due to poor planning and mismanagement by the forest service. 6
To add insult to injury, government efforts to manage the commons have come with a huge price tag. A 2003 report by the Government Accountability Office (GAO) stated: “Historically, the Forest Service has not been able to provide Congress or the public with a clear understanding of what the Forest Service’s 30,000 employees accomplish with the approximately $5 billion the agency receives each year. Since 1990, the GAO has reported seven times on performance accountability weaknesses at the Forest Service.” 7 And the agency’s financial operations were on the GAO’s “high-risk” list for waste between 1999 and 2005.” 8 The main text of this chapter discusses additional examples of commons mismanagement by federal and state authorities in the U.S.
Without the state, how could the problem of pollution be addressed? As we have already seen, the political state is not a responsible environmental steward and offers no effective remedy for problems of common pool resources.
Pollution is an inescapable byproduct of human action, and in fact occurs in nature even without human activity – consider, for example, the immense amount of gas emitted during volcanic eruptions that pollute the air. Pollution poses a problem to the common pool resources of air and water. Yet since it is an inescapable reality of life, we must find a way to mitigate it if we want to enjoy clean air and water.
Technology and innovation, not state coercion, offer effective solutions to the problem of pollution. The catalytic converter is an emissions control device that was invented by French mechanical engineer Eugene Houdry in the early 1950s while he was living in America. Widespread use of the device in automobiles began in the U.S. in the 1970s and has caused an enormous reduction in air pollution created by motor vehicle use. The beneficial impact of the catalytic converter can be seen in Los Angeles with its limited public transit system and heavy reliance on private automobile transport.
Even though America’s productivity, GDP, and automobile use have increased considerably since the 1940s, Americans enjoy cleaner air. The accompanying graph shows this in the case of Los Angeles. While most people believe that it was EPA regulation that decreased air pollution levels, the reality is that the the EPA has no intrinsic ability to reduce air pollution. It was innovation – in this case, the introduction of the catalytic converter – that helped to reduce air pollution by creating a technology that increased the efficiency of the combustion process in automobile engines and thereby reduced exhaust emissions.
Turning to water pollution, the dirtiest water is found in the poorest nations and has been the source of tremendous problems and suffering. For example, 3.4 million people die each year from the diseases found in dirty water, and 780 million people around the globe lack access to clean water. 9
The path from dirty, polluted water to clean water is not political action, it is innovation. Water reclamation technologies, which were created by innovation, not state regulation, allow humans to clean up even the dirtiest water. Water reclamation technology is so effective that astronauts in space are able to create drinking water from human waste.
It is time to dispel the fallacious notion that the political state is the only reliable protector of the public good, which includes common pool resources. The stereotype of the evil, capitalist corporation is also fallacious, and the story of Volvo seat belts demonstrates this.
In 1959, Volvo engineer Nils Bohlin invented the three-point safety belt, which fit over the driver’s torso as well as his or her lap. This new design proved much safer in car crashes than the earlier two-point waist restraint, which actually harmed drivers and passengers in auto accidents. Writer Patrick George commented that the three-point safety belt was “a revolutionary invention and one that could have netted Volvo a fortune on patents alone.” 10 However, in a gesture of admirable magnanimity, Volvo did not patent the three-point safety belt. The company gave the innovation away, recognizing that keeping it for themselves would limit widespread adoption and therefore save fewer lives. According to Volvo, as of 2009 over one million people have been saved by Bohlin’s safety belt design.
When one investigates what it is that promotes environmental cleanliness, one finds not politics, not legislative action, not regulatory agencies or bureaucratic committees, but innovators and the technologies they create.
An inescapable fact of human nature is that people take better care of things they own than things they don’t own. The term “proprietary interest” symbolizes this idea. Proprietary interest is the reason why most people don’t litter in their own back yards and why the proprietor of a business often works harder than his or her employees. Lack of proprietary interest explains the failure of collective farms in Communist nations such as the Soviet Union and China.
Robert J. Smith of the Cato Institute explains:
“The problems of environmental degradation, overexploitation of natural resources, and depletion of wildlife all derive from their existence as common property resources. Wherever we find an approach to the extension of private property rights in these areas, we find superior results. Wherever we have exclusive private ownership, whether it is organized around a profit-seeking or nonprofit undertaking, there are incentives for the private owners to preserve the resource. Self-interest drives the private property owners to careful management and protection of their resource.” 11
The main text of the chapter discusses a variety of situations where privatization of the commons was more effective (in terms of resource conservation and preservation) than non-privatized areas. Here we offer just one example.
Red Rock State Park near Sedona Arizona was closed in 2010. Despite collecting more than $300,000 annually in admissions fees, the park suffered yearly budget shortfalls. There was also a backlog of maintenance projects that had not been addressed due to having operated at a loss.
Also near Sedona Arizona is Crescent Moon Ranch. With the same admission costs, visitation hours, and recreation facilities, the park is comparable to Red Rock. However, Crescent Moon Ranch is not only profitable and up-to-date on maintenance projects, its profits enable approximately $60,000 each year to be added to the Forest Service recreation budget – all without requiring tax dollars to operate.
What is the difference between Red Rock State Park and Crescent Moon Ranch? Crescent Moon Ranch is operated by a private organization that is held accountable for performance. While state agencies are theoretically held accountable, it is actually a false accountability because the state cannot be fired; a private company can, and so has the incentive to do a good job. Author Warren Meyer explains that private companies that operate state parks “substantially reduce costs while providing more accountability and customer service.” 12
And although the aforementioned parks are nearly identical, he explains, “the state-operated Red Rocks Park costs more than twice as much to operate as the privately operated Crescent Moon Ranch, which remains fully maintained and generates a return for the U.S. Forest Service . . . without the need for tax money.” 13
HOW TO HANDLE THE TRANSITION FROM COMMUNAL TO PRIVATE LANDS
How does communal property become private property? How can a just and fair transition be accomplished in the transition from political or communal control of common resources to private ownership?
A history of prior use appears to be a rational and equitable basis by which to determine ownership. For example, in his Second Treatise of Government, John Locke explains that when an individual “removes [a common resource such as land] out of the state that Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property.” 14
Recent transitions of land from communal to private ownership in Kenya and Senegal offer insight as how best to approach the privatization of common resources. The result of the transition from communal to private lands for many Kenyan farmers was disappointing to say the least, as the distribution of land was grossly inequitable. In Senegal the result was much better. To find out why please refer to the full text of this chapter.
SPONTANEOUS ORDER: AN ALTERNATIVE TO PRIVATIZATION
As we have seen, the condition of wildlands, forest lands, and other natural sites improves when they are privatized. However, resources that are unfixed and malleable – such as the air, the ocean, and the electromagnetic spectrum – cannot be privately owned. This is where “spontaneous order” comes into play.
What is the spontaneous order? It is how humanity developed complex structures as diverse as language, free markets, and the Internet.
Chinese philosopher Zhuangzi observed spontaneous order as early as the 4th century B.C.E. He said that there “has been such a thing as letting mankind alone; there has never been such a thing as governing mankind [with success];” and “good order results spontaneously when things are let alone.” 15 Later, thinkers of the Scottish Enlightenment and the Austrian laissez-faire school of economics also observed this phenomenon. Scottish philosopher Adam Ferguson (1723-1816) wrote that solutions develop as “the result of human action, but not the execution of any human design.” 16 Essentially, spontaneous order describes the voluntary self-organization of human beings to solve problems without the direction of a government body or central planner.
Top-down organization always coerces and it always fails to achieve its objective. In her Nobel Prize winning work entitled Governing the Commons, Elinor Ostrom (1933-2012) explains how solutions imposed from above are often completely ineffective because they are designed by individuals lacking adequate knowledge of the complexities surrounding a particular resource. Her work is based on decades of close research and analysis of commons management systems all over the world. Without explicitly using the term “spontaneous order,” Ostrom describes a variety of cases where resource users “frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest” in the management of common resources. 17
When privatization is not feasible, the bottom up approach of spontaneous order is optimal because it is based on human freedom and the ability of at least some humans to innovate solutions and technologies for even problems that at first seem incapable of resolution.
What do modern-day fishermen in Alanya, Turkey have in common with the 17th century hunters of Quebec and Labrador? Each group of resource users innovated sophisticated sharing systems to manage their common assets equitably and responsibly for sustained use.
CREDIT AND DISPUTE RESOLUTION SERVICES
IN THE MANAGEMENT OF THE COMMONS
Air and water pollution, whether created by industry or non-commercial human use, is an offense against the property of other people; that is, it is an offense against their health, which according to Galambos’ teachings is part of the primordial property of life itself.
A claim that any person or group including a business organization is polluting would be subject to registration in the credit mechanism. The offended person or persons could engage the services of a private dispute resolution company to register the claim of damages in a central clearing house for such claims, and also to determine responsibility for pollution-caused damage. Appropriate restitution for damage would consist of mitigation and remediation of the polluting activities.
Failure of the polluter to mitigate and remediate would be a further violation of the property rights of other people. The injured parties could notify the credit clearing house of the failure of the polluter to rectify the pollution. Then the spontaneous order sanction of boycott would come into play. CTLR posits that people would boycott the offender, and that would cause the offender to choose between mitigating and remediating, or being cut off from exchanges with fellow humans. Being cut off from exchanges means other people would refuse to deal with the offender. In a non-coercive, free society, the sanction of boycott would work more powerfully than any state coercion to bring about better conduct and restitution for damages. Examples are given in subsequent chapters of CTLR on credit and justice.
The 21st century system of credit is manifest primarily in the financial realm. If, for example, a person is repeatedly delinquent in paying his credit card bill, he will eventually lose access to credit and his credit score will be negatively impacted as well. However, with the advent of digital electronic computing, the concept of credit is expanding to include not only an individual’s financial history, but his or her online reputation in general. Whether one is a bookseller on Amazon, a host on Airbnb, or the proprietor of a restaurant listed on Yelp, the ability to attract new customers depends in considerable part on customer comments that appear on the internet or an aggregate of all past customer reviews. Soon, it is likely that ratings –whether for businesses or individuals – will expand to include many aspects of character, from a FICO score 18 to Amazon ratings, to any sort of good behavior online.
The online credit and reputation systems described above show how businesses and individuals are rewarded for good behavior and suffer consequences for bad behavior. Online marketplaces that are popping up all over (such as Airbnb) did not require government involvement to ensure quality, safety, or anything else. They are self-governing, self-monitoring, and self-managing.
Most people want to enjoy in perpetuity the common heritage of nature on this planet. From clean air and oceans, to fish stocks, forests and scenic wonders, nature’s gifts provide life, beauty, and offer sanctuary. Without these treasures, life on our planet would be incomparably poorer.
This chapter explains how a free society operating without the political state could manage common pool resources successfully to ensure both current use and preservation for the future. The cases examined are illustrative not exhaustive. Our objective is to offer examples that show how human beings can cooperate voluntarily to innovate ways of preserving our most valuable common resources without involvement by a coercive political state. We seek to show that political state regulation is not necessary to manage the commons and, to the contrary, does more harm than good to humanity’s shared natural resources.
- Hardin, Garrett, “The Tragedy of the Commons”, Science, December 13, 1968, Vol. 162 no. 3859 pp. 1243-1248 (referred to below as Hardin, “Tragedy of the Commons”). ↩
- Hardin, “Tragedy of the Commons.” ↩
- World Bank, The Little Green Data Book 2007, http://siteresources.worldbank.org/INTDATASTA/64199955-1178226923002/21322619/LGDB2007.pdf ↩
- http://content.time.com/time/specials/2007/completelist/0,29569,1661031,00.html ↩
- “Clearcutting: Destroying America’s Public Forests”, from Save America’s Forests Fund, http://www.saveamericasforests.org/pages/educationcda.htm ↩
- “Reopening Forest Areas Stirs Debate in Alaska,” by Blaine Harden, Washington Post, August 1, 2004, p. A3. ↩
- Government Accountability Office, “Forest Service: Little Progress on Performance Accountability Likely Unless Management Addresses Key Challenges,” GAO-03-503, May 2003, p. 1. – See more at: http://www.downsizinggovernment.org/agriculture/forest-service#_edn7 ↩
- Government Accountability Office, “High-Risk Series: An Update,” GAO-05-207, January 2005. – See more at: http://www.downsizinggovernment.org/agriculture/forest-service#_edn7 ↩
- http://water.org/water-crisis/water-facts/water/ ↩
- http://jalopnik.com/volvo-gave-away-their-most-important-invention-to-save-1069825878 ↩
- Smith, Robert J. “Resolving the Tragedy of the Commons by Creating Property Rights in Wildlife,” Cato Institute. ↩
- Warren Meyer, A Tale of Two Parks, Property and Environment Research Center, Sep. 25, 2013, http://perc.org/articles/tale-two-parks. ↩
- Same as above. ↩
- John Locke, Second Treatise of Government (1689) Chapter V, “Of Property”, section 27. ↩
- See Wikipedia, “Spontaneous Order,” en.wikipedia.org/wiki/Spontaneous_order ↩
- Adam Ferguson, Essay on the History of Civil Society, (1767) Part III Section I. ↩
- The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009: Press Release 12 October 2009, http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/press.html ↩
- FICO is an American public company that provides credit scoring reports designed to help financial services companies make complex, high-volume decisions. ↩