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Let's say that we have three small ponds.
This is pond A, this is pond B
and this is pond C over here.
Let's say that this first pond right over here,
it's a privately owned pond.
It's owned by Al
and this pond over here is owned by Carol.
But this middle pond, pond B I guess we called it
to start of with.
This is common land,
or I guess this is a common pond
or this is open to the public.
Let's say that Al and Carol, they're both fisher.
I guess Carol would be a fisherwoman.
They both like to fish,
that's how they make their living.
Al in his pond, he has fish in there
and he does some fishing in his pond.
But he makes sure not to overfish
because he doesn't want to deplete the stock
of fish he has.
He fishes just enough
that he can pay his bills and whatever else
but not so much that it depletes the fish
and essentially makes them extinct in his pond.
He doesn't want to overfish,
and Carol does the same thing.
She's got fish in her pond
and she uses them to make a living.
She gets them out and sells them and eats them
and whatever else
but she's careful not to overfish
because if you overfish then there wouldn't be fish.
There wouldn't be a next generation of fish.
Over here in this public pond, there are also fish.
I'll draw there fish in orange.
There are also fish in this public pond over here.
They're smiling,
maybe they won't be smiling for long.
What is going to happen?
Anyone can go and fish in this public pond.
Al might say, and we'll just assume
we'll in a world of two people.
Obviously, the real world has more than two people.
Al will say, "Okay. I'm going to be very careful
"in my own pond. I'm going to fish just enough
"that I don't deplete the fish there.
"But any extra fish I need, I could go over here
"to this public pond and fish all I want.
"And I might be concerned about depletion
"in the public pond except for the fact,
"if I'm concerned about depletion,
"that's still not going to help the situation
"because other people might come
"and still not be so concerned
"and so I won't even get the benefit of the depletion
"if I hold back and other people come
"and deplete the pond."
When you have this pond that is open to the public,
all of the surrounding people whether it's Al or Carol
or I guess you could have other people here,
they would say, "Look. I'm going to fish here.
"I'm going to get some benefit
"and even if I overfish
"the benefit of overfishing I'm going to get.
"In the near term I'm going to get all of those fish."
Then the cost of that overfishing
which is in the future there won't be as many fish
or no fish at all,
that's going to be spread out amongst everyone else.
So you have the situation where,
because there's no one, I guess you could say,
either owning this land
or there's no one protecting this lake
or however you want to describe it,
there's a rational.
And I want to be clear,
rational does not always mean good.
Rational act or it might decide to overfish.
Essentially, by doing that,
everyone's going to be [were] soft.
They're going to destroy the productivity
of this pond.
They're going to destroy the productivity
of the pond right over here.
This idea that if there's this common land
or common resource,
in this case it was a pond
and people can spread out the cause
and they get the benefits directly.
Essentially, you have a situation
where that shared resource can get abused
and this is called the tragedy of the commons.
This is the tragedy of the commons
where in the example we did here,
the pond is the common space that's being abused.
It's especially a tragedy
and I've already hinted at this already,
is that even if Al decides that,
"Hey, you know what? I'm going to hold back a little bit.
"I'm not going to fish so much
"because I don't want to deplete it."
He'll say, "But wait. If do that,
"other people are going to come and deplete it
"so I have no incentive to hold back."
So other people are also going to have the same logic
and then this thing is going to get overfished here.
The classic example of tragedy of the commons
where the example was first given
was common grazing lands.
Same exact idea.
If this was private grazing land over here
where I can keep my cows and my sheep
and this is private grazing land over here
where someone else has their cow and sheep
but this over here is literally a commons
where anyone can graze their cow and sheep.
Then, just like the fishing,
huge incentive for people to let their cow and sheep
maybe overgraze the land, destroy the land,
make it not sustainable
but the cost of it
are going to be shared by everyone else
and the benefit of overgrazing, at least in the near term,
you, the person who's overgrazing
is going to get from it.
You might even say,
"I'm not even the one overgrazing it.
"It's all of us collectively overgrazing."
so you don't blame me.
Now, what is the solution to the tragedy of the commons?
How does a government or jurisdiction
or a group of people avoid this type of destruction
of a resource?
Well, one way that you could do
is you could make this somehow into a private land.
So if that was owned by the government,
it could sell it, auction it off to private people
who could then sell access to this.
Or if the government does retain control of it,
it could sell permits to the land.
In this situation, you could sell permits.
It could figure out hey, if someone fishes responsibly
in a given day, they're going to get,
I don't know, $200 of value by doing this.
We're going to make a permit cost, I don't know,
$150 so that someone still has an incentive to do it
but that will also limit the amount of fishing
that can be there
and we can have some conservationist that make sure
that not too many permits are given
for this space over here.
We see that happening.
If you wanted to go hunting,
there are permits you need to have.
If you want to go fishing in a lot of places,
there are permits that you want to have.
If you want to go camping in a lot of places,
there are permits
because you could even over-camp an area
if too many people are walking there,
too much trash is there.
It could ruin the camp grounds.
So this tragedy of the commons,
the best way or the way most often seen,
the best way of preventing the tragedy of the commons
is through some type of a permitting process.