Positive sum games: Get yer Elinor Ostrom here! A reprise of posts on rolling up our sleeves to address real problems that "markets" (& govt.) now aggravate
I excerpt below, in chronological order, portions of my prior posts here that refer to Elinor Ostrom (the political scientist who recently was awarded the Nobel prize in economics) and are indebted to her thinking.
Perhaps items 3 and 10 are most accessible for readers in a hurry to find links to her own work.
1. Too Many or Too Few People? Does the market provide an answer?, Sep 28 2007:
Too many or too few? Good question, Dan.
I agree with you that the population question is like any other aspect
of the social order: best addressed by the market and by free societies.
There are just a few small problems – even within the developed
world (and very clearly outside of it), there are many important
resources that are unowned and thus not fully priced in the “market” economy.
Unowned resources include almost all of Nature. Primary
productivity (the amount of vegetation produced from photosynthesis)
has changed little, so as we use technology and our organizational
abilities to divert more and more of it to feed us, this is an
inevitable cost to other species, either directly or in the form of
altered environments that support less life (and less diversity of
life).
In altering our environments to suit us, we are of course no
different from other life forms that compete for resources to live and
propagate, but with our technical and organizational abilities, mankind
has clearly triumphed over the rest of nature (except perhaps evolving
microbes, to whom we represent an increasingly large and relatively
untapped food source). But at what cost?
Through the centuries we have wiped out many wild systems of food
and other resources – because they were never owned, and because our
improving technology enabled us to race each other to take the
resources before others (or from others, in the case of many native
peoples). Not only Jared Diamond`s “guns, germs and steel”, but
also forms of social organization have played deciding roles in the
competition between human societies for survival, growth and
dominance. In this regard, societies that recognize and protect
property rights and utilize free markets have proven clearly superior
in the competition with other societies to obtain and utilize available
resources.
But our struggle has been not only to capture resources and to use
them before others do, but also to manage and protect them
effectively. Evolving ownership systems have been a key means of
limiting wasteful “tragedy of the commons” struggles (see Yandle; von Mises),
but even where ownership systems have been implemented, we have
generally replaced complex natural systems with simpler systems
designed solely to feed us (and particularly so where, due to higher
consumptive demand, we have replaced common property systems with
private property systems (Ostrom)).
Meanwhile, virtually all of the natural world – the world’s oceans,
atmosphere, tropical reefs, tropical forests and other great commons –
remain unowned and thus unmanaged and unregulated (or indigenous
occupants have been forced aside). For example, the great cod fishery
off of the Grand Banks that fed Europe for centuries has now
disappeared, and other fishery stocks worldwide are crashing – to be
“replaced” by “farmed” fish that are fed to a substantial degree by
catching and grinding up fish stocks that humans prefer not to consume
directly, and in part by fish firms that are established by destroying
the mangroves that are estuaries to various fisheries. The same is
true of the replacement of vast tracts of tropical forests with
soybeans or oil palm plantations, with the rapid increase in
atmospheric CO2 (and attendant risks to climate) and with the
correspondingly geolologically rapid increases in ocean acidification (and
threats to plankton, corals and shellfish).
While populations in the developed economies are now relatively
stable, demand from our markets (as well as the burgeoning developing
markets) continues to strip out unowned (or mismanaged “public”)
resources from the oceans or undeveloped countries, aided by
kleptocratic elites who are happy to steal from the peoples they
supposedly represent in order to line their own pockets.
As Dan points out, property rights failures in poorer nations
contributes to population growth there by delaying the demographic
transitions that we have experienced. Developed economies face similar
problems with respect to “public”, state-owned lands, for which
rent-seeking by and sweet deals to insiders are enduring problems and
sources of politcal conflict (as markets cannot work to allocate
resources).
Dan states that the stunningly rapid growth of human populations
from the Renaissance to the present (6+ billion now expected to nearly
double again soon) “actually represents the rise of capitalism and
capital development … [and] shows … the stunning capacity of
freedom to provide for the whole world.” While partly correct, this
misses completely the question of our massive impact, within a very
short period of geological time, on the environment in which we evolved
over millions of years, the fact this has occurred because clear and
enforceable property rights have not been created in many of the
resources that have been consumed, and the corollary fact that
we continue to lack the ability to manage our impact on our endowment
of natural resources.
The market clearly does NOT send accurate pricing signals with
respect to goods that are unowned or ineffectively owned; these goods
are either unpriced or underpriced, so the effect is overconsumption
until the point that the resource is greatly degraded, at which point
attention is turned to the next unowned resource. Thus, human
populations are responding to rather imperfect market signals. And
where resources are unowned, individuals and groups with differing
values and desires cannot adjust or realize those desires by means of
private, market transactions. As a result, we are seeing a recourse to
the public and political arenas – and the inevitable discordant debates
– as various parties seek to use either moral suasion or the levers of
government (locally, nationally and internationally) to advance what
they consider to be their own interests. (Of course, in a “tragedy of
the commons” situation, all resource users share an interest is the
future availability of a resource; the difficulty is in the prisoners’
dilemma negotiations at the primary user level about how to allocate
short-term pain in the interest of long-term gains, compounded in the
case of multinational resources by rent-seeking with each national
participant.)
A cynic may say that our ongoing assault on nature is only
“natural”, presents no moral or philosophical issues and that we hardly
owe any responsibilities to “nature” or even “future generations” – so
let’s just all keep on partying, consuming for today, and patting
ourselves on the back at how marvelous our market systems are. And
that we should keep on hurling invective at those evil “enviros” who
want to crash the party and drag us all back to the Stone Age.
Perhaps I suffer from a want of sufficient cynicism.
2. Using the State to solve common resource problems?, Oct 12 2007:
How exactly do you transfer commons into private ownership in a fair way, even for easily divided up stuff like land?
Libertarians do not insist that open-access resources (or common
property resources/CPR) be divided up by creating individual property
rights; cooperative ownership via formal agreements or informally
developed practices and customs (such those developed by Maine
lobstermen, English angling clubs, indigenous peoples and Wikipedia and
online communities) may work better at solving the prisoners’ dilemma
issues and are just as acceptable.
But technological advances and greater demand often swamp CPR
regimes, so such regimes remain vulnerable if they are not accorded
legal protection. My understanding of the UK enclosures in this regard
is that they were actually a legislative theft of common property by
the powerful.
Can states play positive roles in solving problems? At least
internally, it is rather clear that the answer is that the state works
best by allowing, and providing judicial mechanisms to enforce, private
transactions, and works least well when it tries to specify detailed
and rigid “solutions” itself – since the government itself never has
perfect information, often plays favorites and once a regulatory regime
is put in place, parties have no ability to work out their differences
directly with each other, but are forever in the position of trying to
influence the state and in adversarial positions vis-a-vis each other.
But states can also play a positive role by disseminating information
and by acting to facilitate deals between various resources users,
particularly in cross-border/multi-state problems.
Elinor Ostrom is the guru of CPR regimes; anyone interested
should look into her fascinating and highly-regarded work, particularly
her seminal Governing the Commons (1990).
[She is a member of the American Academy of Arts and Sciences, the
National Academy of Sciences, and the American Philosophical Society,
and a recipient of a number of prestigious awards. Her other books
include Rules, Games, and Common-Pool Resources (1994); The Commons in the New Millennium: Challenges and Adaptations (2003); The Samaritan’s Dilemma: The Political Economy of Development Aid (2005); Understanding Institutional Diversity (2005); and Understanding Knowledge as a Commons: From Theory to Practice (2007).]
Here is one link to get readers started: Elinor Ostrom et al.,
Revisiting the Commons: Local Lessons, Global Challenges, Science 9
April 1999: http://conservationcommons.org/media/document/docu-wyycyz.pdf
Technology seems to provide us ability to create property rights regimes in ocean fisheries.
The
stickiest problems are those where the resource is located in a country
where we cannot ourselves create or enforce legal rights and in the
atmosphere, which no one owns and to which all have access.
Unfortunately, many libertarians don’t even want to acknowledge, much
less discuss, these problems. Since they are not confined to any one
country, clearly we need to coordinate with others – for which
purposes our state apparatus cannot be avoided.
Reaching any kind of effective solution for problems of this type
will require much more focussed attention and bridge-building (abroad
and at home), and if libertarians do not want to be part of the
discussion, clearly they will have little influence on the results.
3. Sophomoric optimism?, Oct 16 2007:
Our states are merely one subset of the wide universe of formal and
informal institutions through which we cooperate with one another.
States are not a market, to be sure, but then neither are corporations,
and there is a spectrum of ownership types between the two. We can
study all of these institutions and use that knowledge to direct how we
make use of them. Such study has informed, for example, the deliberate
shifts in policy that have led to the ongoing (yet incomplete)
privatization of the former USSR and of China.
A study of institutions governing common pool resources by guru Elinor Ostrom makes the following point:
“Whether people are able to self-organize and manage CPRs also depends on the broader social setting within which they work. National governments can help or hinder local self-organization. “Higher”
levels of government can facilitate the assembly of users of a CPR in
organizational meetings, provide information that helps identify the
problem and possible solutions, and legitimize and help enforce
agreements reached by local users. National governments can at times,
however, hinder local self-organization by defending rights that lead
to overuse or maintaining that the state has ultimate control over
resources without actually monitoring and enforcing existing
regulations.“Participants are more likely to adopt effective rules in
macro-regimes that facilitate their efforts than in regimes that ignore
resource problems entirely or that presume that central authorities
must make all decisions.If local authority is not formally recognized by larger regimes, it is difficult for users to establish enforceable rules. “
Elinor Ostrom et al., Revisiting the Commons: Local Lessons, Global Challenges, Science, 04/09/99 http://conservationcommons.org/media/document/docu-wyycyz.pdf
Was von Mises foolish to suggest we can use the state to reform our institutions?
“It is true that where a considerable part of the costs incurred are
external costs from the point of view of the acting individuals or
firms, the economic calculation established by them is manifestly
defective and their results deceptive. But this is not the outcome of
alleged deficiencies inherent in the system of private ownership of the
means of production. It is on the contrary a consequence of
loopholes left in this system. It could be removed by a reform of the
laws concerning liability for damages inflicted and by rescinding the
institutional barriers preventing the full operation of private
ownership.”
http://mises.org/humanaction/chap23sec6.asp
And Cordato, for suggesting that Austrians take particular policy approaches to environmental issues?
“For Austrians then, public policy in the area of the
environment must focus on resolving these conflicts over the use of
resources that define pollution, not on obtaining an ultimately
unobtainable “efficient” allocation of resources. … For Austrians, whose goal is to resolve conflicts, the focus is on clarifying titles to property and rights enforcement.
Sorry, but I cannot believe that we are condemned always to repeat
all mistakes, despite our rather constant human nature. Rather, as Yandle notes, our very history as a species is about our success in evolving, devising and adopting ways to manage shared problems. http://www.fee.org/publications/the-freeman/article.asp?aid=4064
This is a message of profound optimism, not cynicism — said the fool.
4. Ron Bailey of Reason congratulates Al Gore , Oct 15 2007:
1. You were right last year when you
said that “In the end, the debate over global warming and its obverse,
humanity’s energy future, is a moral issue.”
http://www.reason.com/blog/show/113924.html
2. I share your understanding of the
economics and institutional problem and agree that a straightforward
explanation of these is important for very many.
3. However, you forget what
evolutionary psychology, Ostrom and Yandle have explained to us so well
about how our innate moral sense drives and underpins mankind’s success
as a species by enhancing our ability to cooperate and to overcome
commons issues.
Ostrom: http://conservationcommons.org/media/document/docu-wyycyz.pdf
Yandle: http://www.fee.org/publications/the-freeman/article.asp?aid=4064
Our long history of developed rules and
institutions (informal and formal now overlapping) are based on our
moral sense and the effectiveness of these rules depends critically on
our moral investment in accepting their legitimacy – witness our views
on murder, theft, lying and “not playing by the rules” – and in
voluntarily complying with them.
Our moral sense reinforces our judgments
about when rules/institutions are not working and the need to develop
new ones in response to changing circumstances and new problems. When
we see a problem that we think requires change, it is unavoidable that
we respond the the status quo, the behavior of people within it and the
need for change with a moral sense.
This is simply a part of our
evolutionary endowment. (Of course, other parts of our endowment
accentuate our suspicions of smooth talkers and help us catch free
riders and looters and to guard against threats from outsiders.)
4. Accordingly, while it’s unclear how
deliberate Gore’s talk of “a moral and spiritual challenge” and
“lifting the global consciousness” is or whether this is a
productive approach for some people, I think it is fairly clear that,
in order to build consensus for a solution to the climate commons
problem (and other difficult commons problems) and to ensure that any
agreed solutions are actually implemented, we will need to bring our
moral senses to bear.
In other words, it is RIGHT to worry
about climate change, but no meaningful/effective “solution” can be
reached or implemented unless it is FAIR and the parties involved have
sufficient TRUST (backed by information) in each other.
5. Not Climate Change Welfare, But Capitalism and Free Markets, Jan 22 2008:
[F]ar from “forc[ing] rich countries to become poor”,
figuring out how to manage a global commons like the atmosphere, while
it may have the effect of imposing a cost on the release of carbon, is
basically aimed at privatising externalities, with the intention of
increasing the efficiency of private transactions and net wealth. Climate
change is, of course, just one of a broad range of pervasive problems
that occur when markets encounter resources that are not clearly or
effectively owned or managed. http://mises.org/Community/blogs/tokyotom/archive/2007/09/28/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx
3. Most importantly, while Lockitch correctly diagnoses the illness
– poor countries need to “embrace free markets and private property
rights and attract the investment of profit-seeking entrepreneurs to
create wealth and drive economic growth” – he simply fails to address what wealthy nations SHOULD be doing, if anything, to assist the cure. This,
of course, is the main dodge, because Lockitch fails to own up to the
true difficulties involved in trying to help the developing nations.
Trying to build “soft” infrastructure in the form of rule of
law and property rights (ending kleptocracy and theft of “public”
resources) is tremendously difficult – perhaps a problem that is even
more difficult than the wealthy nations deciding how to share the pain
of GHG reductions (as I noted in comments to a post on Amazonian deforestation here: http://sciencepolicy.colorado.edu/prometheus/archives/climate_change/001043lahsen_and_nobre_20.html) Heck,
the wealthy nations have a hard enough time doing the easiest things to
speed development of poorer nations, which is simply to open import
markets by removing domestic tariffs, import restrictions and subsidies.
Rather, it seems that the richer nations have to feed their more
powerful elites first, while hamstringing competition from poorer
nations in products for which they should be able to exploit a
comparative advantage. If Lockitch was truly interested in
helping the poor of developing nations, you’d think he’d note how
enduring rent-seeking at home serves to keep the poorer nations down.
And if the wealthy nations should do something to help
poorer nations, which seems implicit in Lockitch’s analysis (if not
conventional aid, then aid to build soft, governance infrastructure),
then can’t some of those efforts easily dovetail with efforts to
establish carbon pricing in the wealthy countries? Why couldn’t aid
budgets be funded by carbon taxes at home, for example? And can’t
demand for “carbon credits” help to establish incentives to improve
governance infrastructure in poorer nations? In other words,
“mitigation” (efforts to limit climate change) in developed
nations need not conflict with any efforts to help poorer
nations “adapt” to climate change or otherwise become wealthier.
4. Lockitch asserts that the concern of enviros for the world’s
poor is “feigned”, but this is a cheap and unproductive ad hominem –
and one that can easily be turned around. While some enviros may not
understand the institutional sicknesses that hinder development, this
illness has been fed much more by governments and corporations at home
than by enviros, many of who have been involved in the long,
hard effort to build local infrastructure and to protect traditional
private and community property rights.
On the other hand, just what is it that evidences that
Lockitch himself – or other skeptics – have any “real” concern for the
world’s poor? Does the wheel of this concern ever hit the road, or is
it simply spinning noisily, to welcoming nods from domestic special
interests who benefit from the continuation of climate externalities?
A key insight of Austrian economics relating to the environment is that man does not harm the environment per se, but that social
welfare or efficiency problems arise because of interpersonal conflict
associated with irresolvable inefficiencies – inefficiencies that
cannot find a solution in the entrepreneurial workings of the market
process because of institutional defects associated with the
lack of clearly defined or well enforced property rights. (See Roy
Cordato, http://mises.org/daily/1760).
It is both ironic and disappointing that many Austrians and others
similarly minded, rather than focussing on the difficult task of
conflict resolution in the case of the climate, seem to prefer the
emotional rush of conflict itself over analysis and bridge- and
consensus-building. But this is nothing new (and is certainly
tempting, given our tribal nature)(http://mises.org/Community/blogs/tokyotom/archive/2007/12/17/holiday-joy-quot-watermelons-quot-roasting-on-an-open-pyre.aspx).
No one owns the world’s atmosphere, so all are entitled to
their opinions about managing it. And clearly the world continues to
struggle with the rapid exploitation of other unowned, “public” or
poorly defined or protected physical resources, in the face of growing
populations, growing markets and technological advances that lower the
costs of access to the commons. I suggest that rather than ad
hominems, we would be better served by frankly acknowledging problems
of this nature and starting to build shared understandings. The writings of Elinor Ostrom are a good place to start: http://www.conservationcommons.org/media/document/docu-7e8akm.pdf
In honestly engaging on these issues, it is perfectly
appropriate – nay, essential – to be aware of the self-interests of
various participants and to caution against the problems of
rent-seeking, “rent-farming” by politicians, and frequently unaligned
incentives of bureaucracies.
5. Finally, this is a quibble, but Lockitch is wrong to assert thay developing nations need to “industrialize”. What they need to do is to better govern themselves by protecting investments, markets and human rights, and then getting out of the way of their people.
What results will be these countries’ own path, which will naturally
differ from Western industrialization (leapfrogging it in some ways).
Rob Bradley has a new post up at MasterResource, cheering on big (and now “clean”) coal, which has apparently received assurances from the Obama administration – after being bad-mouthed by NASA scientist Jim Hansen, Steven Chu and Obama himself – that, despite pressures from the “Malthusian anti-energy crusade” regarding climate change impacts, the recent massive TVA fly-ash spill and opposition to destructive mountaintop removal practices in Appalachia, coal will remain profitable during Obama’s term and central to US energy supplies. Hooray!
But I wasn’t quite clear on all of Rob’s message, so I asked him a few questions in the comment thread:
Rob, are the John Badens, Terry Andersons, Bruce Yandles, Elinor Ostroms
and others who want to find ways to manage our commons better – by
improving ownership, incentives and pricing signals – also part of a[n
evil] “Malthusian crusade”?
I just wanna make sure I know who to hate.
As for that big fly-ash breach/spill in
Tennessee, I’m glad that you didn’t point out how this was a result of
government ownership of TVA, with the added benefit that costs will be
borne not only by direct and indirect victims, but by taxpayers as
well. No sense in pointing out how government is so often in the way,
particularly if it detracts from our “we hate enviros!” message. Last
thing we ever want to do is to reach a shared understanding with
enviros of the institutional underpinnings of problems, since that
means our funders might lose some of their fairly purchased,
government-given special privileges.
While it’s clear that “free-market” Rob cares little about whether the coal industry continues
commercial activities that shift the environmental costs and risks
(including potential costs arising from GHG emissions) to others,
I forgot to ask Rob whether, as a hearty cheerleader for those poor
coal underdogs, he also supports their position that the government
should subsidize their change in business model by (a) having Uncle Sam pay the bulk of capital costs for IGCC (integrated gas combined cycle plant) [something like $1 billion for the first one with CCS], (b) giving them a further break (reduced royalties) on the sweet deals they already have
for stripping coal from public lands and (c) – now that the federal
government is getting into the busy of running the financial sector –
making sure that power producers that want to use coal have easy access
to credit, by twisting the arms of those uppity Wall Street financiers
who with their fancy new “Carbon Principles” and “Enhanced Due Diligence” seem a bit too reluctant to extend credit for coal-fired power plants.
Here’s hoping Rob weighs in further. I want to make sure I’m not
messing up when I try to distinguish the “white hats” from the “black
hats”. From what I can tell so far, seeking to manipulate government
policy for your own benefit is evil – as long as you’re not a coal
firm – and we call the evil ones “Malthusians”. Right?
7. More stupid from Tierney; this time on “Kuznets curve” and the dynamics of “wealthier and greener”, May 12 2009:
Tierney seems to believe that the Kuznets curve means that greater
wealth magically makes for a cleaner environment. To the contrary, it
is the hard work of people, expressing their desires to protect their
own property and to realize other preferences regarding shared
resources, to increase wealth by finding means (property rights
institutions, litigation and government regulation) to end tragedy of
the commons-type situtations, who improve their environment. That is, working to close externalities leads to both wealthier and greener societies.
(I`ve remarked on the Kuznets curve before; interestingly, conservatives seem to misunderstand it more than liberals.)
So
I tried to offer a more libertarian understanding, which I`ve taken the
liberty of memorializing here (with typo correction and emphasis and
further links added):
Andrew, food for thought on enviro Kuznets:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=kuznets
http://mises.org/Community/blogs/tokyotom/archive/2008/01/22/poor-countries-need-capitalism-not-climate-change-welfare.aspx
http://mises.org/Community/blogs/tokyotom/archive/2007/09/27/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx
Unfortunately, Tierney simply fails to understand that the enviro
Kuznets curve does not tell us that problems relating to environmental
cost-shifting or to the over-exploitation of unowned commons are best
resolved by ignoring them and simply hoping for the best. Rather, it
affirms that as people become more wealthy, they care more about
protecting the environment and put more elbow grease into achieving
improvements – via improved property rights protection, improved
information disclosure, greater consumer pressure and even through
greater regulation (which is the path the West has largely followed),
and reaching agreements with others sharing the relevant resource).
In other words, the work relating to global, regional and various
national commons (atmosphere, seas, forests, water, etc.) is still
ahead of us. Libertarians can advocate for property rights (and
privatization of public lands) as ways to have a more efficient (and
just) path on the curve, or they provide implicit support for powerful
and dirty industries by standing by and waiting until citizen pressure
groups force government to act in heavy-handed ways.
-
-
Andrew. I suggest that you start with this short article by Yandle.
I have plenty more links on my blog to him, Terry Anderson, Mises, Cordato, Block, Rothbard and others on Austrian approaches to environmental issues, fisheries, and climate. Ron Bailey (at Reason) has good posts on fisheries; leading enviro groups all agree that more privatization is desirable:http://mises.org/Community/blogs/tokyotom/archive/2009/01/15/for-crashing-fisheries-coalition-of-mainline-us-enviro-groups-calls-for-property-rights.aspx
Commons remain commons either because government ownership
prevents privatization (as in the Amazon, US public lands and most
fisheries management) or because full privatization is difficult. There
are many examples of the latter case that involve semi-privatization
and commons management, like traditional forestries, fisheries and water rights. Elinor Ostrom is the expert on commons; I have plenty of links to her too. … -
People and firms invest all the time in doing
things in response to incentives, both positive and negative; viz. they
also try to reduce costs, including the costs their activities impose
on others if those they injured have rights of recourse. The effort to
reduce costs is one of the chief factors driving technological advances.Surely you`re not suggesting that the best way to encourage
wealthier societies is to free people from responsibility for the
damages they cause others? That`s hardly a Lockean or libertarian view.
A “Laissez Faire approach” leaves government out, in favor of voluntary
transactions and enforecment of property rights, including rights not
to be injured. The regulatory state has in fact been a boon to the most
powerful producers, by giving them rights to pollute, often
grandfafthering dirty plants, while forcing the highest costs on more
nimble and cleaner producers. If you^re interested in learning
about libertarian approaches to the environment, again, I suggest you
look at Rothbard, Cordato, Block and others, whom I link to on my blog.You seem to make reference to the enviro Kuznets curve, and how
wealthier societies bring pollution dow, while completely missing the
dynamics. Wealthier societies clean up because they insist on
bringing an end to tragedy of the commons-type exploitation of
resources. A society that focusses on property rights typically has a
lower curve than societies that fail to enforce property rights (needed
for Coasean bargaining) in favor of government regulatory approaches.
Our own curve remains too high, because wealthier investors prefer to
use regulation to shift costs to the rest of society.
-
8. Libertarians to lefty-enviros: without community-based property rights, sustainable fisheries are impossible, May 11 2009:
Elinor Ostrom has
also been a leader in documenting the ways that a community of users
(NOT the dread and sloppily misused “soc-ial-ism”) may effectively
manage a shared resource.
Readers might be interested in the World Bank`s Oct 2008 report, “The Sunken Billions; The Economic Justification for Fisheries Reform”.
With support from the World Bank, PERC is in the middle of hosting a conference
on approaches to sustainable fisheries (and on ending the massive
over-harvesting and wasted subsidies and mal-investment under current
regulatory approaches).
I also urge readers to look at what the organization Defying Ocean’s End (co-founded by Conservation International, The Nature Conservancy, Natural Resources Defense Council, The Ocean Conservancy, Wildlife Conservation Society, The World Conservation Union, and World Wildlife Fund) has to say about protecting fish:
“Most of the solutions that have been
implemented or proposed to fix the world’s fisheries center on
command-and-control measures: regulators or courts telling fishermen
how to fish through the imposition of controls on effort (e.g., fishing
vessel length, engine horsepower, gear restrictions, etc.).
Prescriptions like these work against strong economic incentives for
maximizing catch, which are not addressed by such measures, and are of
course usually resisted by fishermen. Often, prescriptions create
incentives for “work-arounds” and set up a cat-and-mouse game between
fishermen and regulators – for example, if regulators impose a
restriction on vessel size, fishermen may purchase two vessels to
maintain high catch levels.
“As in most natural resource
problems, more effective solutions will address the fundamental drivers
of unsustainable fisheries. In this case, the key necessary reform will
be to designate secure catch privileges. It is important to understand
that such privileges can be allocated to different kinds of entities in
different ways, and indeed, they should be tailored to specific
fisheries and communities to fit with local customs, traditions,
values, and social structure.”
I`ve linked a number of my other posts on fisheries here.
9. The tragedy of the panicked enviro II; understanding the “tragedy of the commons”, Aug 29 2009:
Sure,
the Western
world has managed to create many environmental problems, but we`ve
largely cleaned up our own messes, haven`t we? While it by no means
excuses our own faults, far worse environmental problems have been
created and are still stewing in Russia and other state-directed
economies, and it`s no coincidence that the vast pollution being
created in China and India are tied to governement-owned enterprise and
an inability of injured people to sue for damages or to stop harmful
activities. And the great waves of extinctions created as man spread
around the globe tens of thousands of years ago can hardly be laid at
the foot of either the Western world or of private property rights (nor
can the collapse of earlier civilizations).
The
“tragedy of the commons” is NOT a “simplistic market morality”, but a
description of cooperation problems and incentives relating to shared,
open-access resources. The tragedy of the commons and problems of
cooperation – and theft – are not even limited to mankind, but permeate
nature. This perceptive article by Bruce Yandle touches on competition
in nature, and links the ascendance of man to our evolution of
relatively enhanced cooperation:
http://www.thefreemanonline.org/featured/the-commons-tragedy-or-triumph/
The
“tragedy of the commons” paradigm is useful to analyze, but the
paradigm doesn`t “seek to moderate” anything, and is just as useful in
looking at the ways Western nations still contribute to environmental
problems around the world (as I point out here:
http://mises.org/Community/blogs/tokyotom/archive/2007/09/28/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx) as it is in examining:
– environmental devastation in Haiti (which has little or no property rights, and vast free-for-all “government” holdings),
–
deforestation in Indonesia and the Amazon:
http://mises.org/Community/blogs/tokyotom/archive/2009/05/24/capitalism-the-destructive-exploitation-of-the-amazon-and-the-tragedy-of-the-government-owned-commons.aspx,
– pollution in China: http://mises.org/Community/blogs/tokyotom/search.aspx?q=china, and
–
crashing fisheries around the world as a result of government of marine
resources (producing free-for-alls and fleet subsidies) and a
free-for-all for other unowned or unprotected resources:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=fish.
You
say: “The rate of exploitation and the decline
of resources, water, energy, fisheries, soil, minerals, etc., all
occured under a free market, private property paradigm.” This is
clearly demonstrably wrong, and draws entirely the wrong lessons. While
private property is certainly no panacea, neither are they what is
wrong. Very often, is is governments that have been and are wrong,
though there is certainly some learning going on.
While
Garrett Hardin`s “The Tragedy of the Commons” certainly represents a
hypothetical situation, it is actually a very powerful analytical tool
for understanding and fashioning solutions to countless “real life”
problems. See Elinor Ostrom et al., Revisiting the Commons: Local Lessons, Global Challenges, Science, 04/09/99 http://conservationcommons.org/media/document/docu-wyycyz.pdf
“In real life,
corporations own, or vie to own, resources or access to them for the
purpose of extraction and profit and they seek to maximize profits
through economies of scale, that is industrial extraction methods,
drift netting, blowing up mountains, tossing mining waste into clear,
pristine lakes.“
What
you describe here is a conflict between preferences over how resources
are used. Do you prefer a free-for-all, or a situation where those who
use a resource can protect it, negotiate with others who wish to see
other values preserved, and who are responsible for negative
consequences caused to others (not always a part of some property
rights systems), or perhaps a situation where governments make all
resource exploitation decisions?”
“The money is in the resource and when the resource is
exhausted they will move on to the next one.”
The
money is never in the “resource”, but in the ways that people can use
it or otherwise value it (and of course people also value pristine
environments).
10. Tragedy of the panicked enviro III: learning from Elinor Ostrom about cooperative action, Aug 29 2009:
Let me add some further nuance to Mr. Worstall`s comment by saying
that Hardin`s fertile observations have fuelled extensive further
research on common property problems, with Elinor Ostrom being recognized as a leading light.
Here is one general bibliography on commons research: http://www.indiana.edu/~workshop/wsl/tragedy.htm
Ostrom
has refined Hardin`s work in the following way (quoting from a review
of Ostrom`s 1990 ground-breaking and extensively researched book, GOVERNING THE COMMONS, The Evolution of Institutions for Collective Action):
Ostrom uses the term “common pool resources” to denote natural
resources used by many individuals in common, such as fisheries,
groundwater basins, and irrigation systems. Such resources have long
been subject to overexploitation and misuse by individuals acting in
their own best interests. Conventional solutions typically involve
either centralized governmental regulation or privatization of the
resource. But, according to Ostrom, there is a third approach to
resolving the problem of the commons: the design of durable cooperative
institutions that are organized and governed by the resource users
themselves.
“The central question in this
study,” she writes, “is how a group of principals who are in an
interdependent situation can organize and govern themselves to obtain
continuing joint benefits when all face temptations to free-ride,
shirk, or otherwise act opportunistically.”
The
heart of this study is an in-depth analysis of several long-standing
and viable common property regimes, including Swiss grazing pastures,
Japanese forests, and irrigation systems in Spain and the Philippines.
Although Ostrom insists that each of these situations must be evaluated
on its own terms, she delineates a set of eight “design principles”
common to each of the cases. These include clearly defined boundaries,
monitors who are either resource users or accountable to them,
graduated sanctions, and mechanisms dominated by the users themselves
to resolve conflicts and to alter the rules. The challenge, she
observes, is to foster contingent self-commitment among the members ….
Throughout the book, she stresses the dangers of overly
generalized theories of collective action, particularly when used
“metaphorically” as the foundation for public policy. The three
dominant models — the tragedy of the commons, the prisoners’s dilemma,
and the logic of collective action — are all inadequate, she says, for
they are based on the free-rider problem where individual, rational,
resource users act against the best interest of the users collectively.
These models are not necessarily wrong, Ostrom states, rather the
conditions under which they hold are very particular. They apply only
when the many, independently acting individuals involved have high
discount rates and little mutual trust, no capacity to communicate or
to enter into binding agreements, and when they do not arrange for
monitoring and enforcing mechanisms to avoid overinvestment and overuse.
Ostrom
concludes that “if this study does nothing more than shatter the
convictions of many policy analysts that the only way to solve common
pool resource problems is for external authorities to impose full
private property rights or centralized regulation, it will have
accomplished one major purpose.”
A
profile of Ostrom, who is a member of the National Academies of Science
and and Editor of its Proceedings, is here:
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1748208
Her work can be found here: http://scholar.google.co.jp/scholar?q=Ostrom,+Elinor&hl=en&btnG=Search and
here: http://de.scientificcommons.org/elinor_ostrom
One
thing worth noting is that the historical and ongoing records are rife
with examples – such as our crashing local fisheries – where government
intervention has done more harm than good. In these cases and in
others, Ostrom introduces an analytical approach that is acceptable
widely across the political spectrum, even if differences in opinion
will remain. See, for example, this discussion at libertarian-leaning
George Mason U: http://www.theihs.org/bunnygame/
April 22, 2009 at 6:28 am