TT's Lost in Tokyo — by TokyoTom

John Quiggin, a left-leaning Australian economist and professor at the University of Queensland, has noted my recent post on the penchant for bloggers
and readers at the Mises Blog to attack climate science – are “almost universally committed to delusional views on climate science“, as he puts it – though these are not words fairly put into my mouth.  Like me, though, Quiggin wonders why wonders why libertarians focus on climate science at the near-exclusion of policy discussions, since (1) he sees “plenty of political opportunities to use climate change to attack subsidies and other existing interventions” and (2) he supposes that the environmental movement`s widespread shift “from profound suspicion
of markets to enthusiastic support for market-based policies such as
carbon taxes and cap and trade” seems like a big win for libertarians.

Quiggin previously commented on “Libertarians and global warming” last June; this seems to be a follow up.

Quiggins posits that Austrians/libertarians exhibit a “near-universal rejection of mainstream climate science,” and asserts that:

we can draw one of only three conclusions
(a) Austrians/libertarians are characterized by delusional belief in
their own intellectual superiority, to the point where they think they
can produce an analysis of complex scientific problems superior to that
of actual scientists, in their spare time and with limited or no
scientific training in the relevant disciplines, reaching a startling
degree of unanimity for self-described “sceptics”
(b) Austrians/libertarians don’t understand their own theory and
falsely believe that, if mainstream climate science is right, their own
views must be wrong
(c) Austrians/libertarians do understand their own theory and correctly
believe that, if mainstream climate science is right, their own views
must be wrong

John concludes:

“Overall, though I, think that acceptance of the reality of climate
change would be good for libertarianism as a political movement. It
would kill off the most extreme and unappealing kinds of a priori
logic-chopping, while promoting an appreciation of Hayekian arguments
about the power of market mechanisms. And the very fact of uncertainty
about climate change is a reminder of the fatality of conceits of
perfect knowledge.”

While John asks a good question and reveals some appreciation of markets, it`s clear that he is still pretty much groping in the dark when it comes to understanding libertarians` concerns about climate policy, indeed, even as to libertarian aims and concerns generally. He also overlooks various cognitive/psychological factors that appear to be at play. Naturally, I appreciate the opportunity for discussion.

1. Before addressing his three possible conclusions, let me note that while “market-based policies such as
carbon taxes and cap and trade” may seem to John “like a big win for libertarians”, this is most definitely NOT the case for most libertarians in the context of climate change, as these “market-based policies” represent an enormous expansion of government that libertarians feel very strongly, based on past experience, will be profoundly porky, counterproductive and costly. In the face of the fight for favor in Washington and the choice of opaque cap-and-trade over a more open rebated carbon tax and other deregulatory options, there is good reason to believe that libertarians are right.

2. Regarding conclusion (a), let me first note that John reveals the self-same “conceit of perfect knowledge” that he accuses Austrians/libertarians of having: the “acceptance of reality of climate change” would undoubtedly be good for everyone, but just what is that reality, and how can a layman of any stripe confirm himself that climate is changing and that man is responsible? The very fact that this “reality” is nearly impossible to confirm personally (even over the course of a lifetime) means that even those whom John considers as having “accepted reality” have basically just adopted a frame of reference, on the basis of the consistency of the AGW frame with other previously established mental frames, a reliance on authority, peer-group acceptance, etc.

“Reality” in this case inevitably, for most people, has very large personal and social components; accordingly, both “acceptance” and “skepticism” of it may look like a group belief, which may help to explain why it is possible to perceive “a startling
degree of unanimity” of views on climate science, the contents of such views varying by group.

As for Austrians/libertarians, while I don`t think it is fair to conclude they (we) are characterized by delusional belief in
their own intellectual superiority, but that many do have a belief, not so much in the superiority of their intellect, but in the correctness of their views on political science and economics (this is common in other groups, of course). This may affect their views on climate science, for several reasons that I have noted to John previously, and may be related for some of them to his conclusions (b) and (c).

3. Concerning conclusions (b) and (c), these are both over-generalizations; libertarians are a heterogenous bunch. But if I may generalize myself, to me there appears no conflict whatsoever between Austrian views, which are primarily about interpersonal relations and the role of government, and climate science. “Mainstream science” has nothing to do with these views, so if Austrians are wrong about “mainstream climate science”, this does not imply that any Austrian views
must be wrong. So Quiggins` (c) is wrong.

Quiggins`(b) – that Austrians may not understand their own theory and
may falsely believe that, if mainstream climate science is right, their own
views must be wrong – may be right for some Austrians, but certainly not generally. Rather, what I suspect is going on is much more ordinary, as I previously noted to Quiggin as a comment on his related June post; that I need to repeat myself indicates that maybe John is having cognitive difficulties of his own (emphasis added):

John, thanks for this piece. As a libertarian who believes that
climate change IS a problem, I share some of your puzzlement and have
done considerable commenting
on this issue [see this long list]. Allow me to offer a few thoughts on various factors at
work in the general libertarian resistance to taking government action
on climate change:

– As Chris Horner noted in your linked
piece, many libertarians see “global warming [as] the bottomless well
of excuses for the relentless growth of Big Government.”  Even those who
agree that is AGW
is a serious problem are worried, for good reason, that government
approaches to climate change will be a train wreck – in other words,
that the government “cure” will be worse than the problem.

–
Libertarians have in general drifted quite far from environmentalists.
Even though they still share a mistrust of big government,
environmentalists generally believe that MORE
government is the answer, while ignoring all of the problems associated
with inefficient bureaucratic management (witness the crashing of many
managed fisheries in the US), the manipulation of such managment to
benefit bureaucratic interests, special interests and insiders
(wildfire fighting budgets, fossil fuel and hard rock mining, etc.) and
the resultant and inescapable politicization of all disputes due to the
absence of private markets. Libertarians see that socialized property
rights regimes can be just as “tragedy of the commons” ruinous as cases
where community or private solutions have not yet developed, and have
concluded that, without privatization, government involvement
inevitably expands. Thus, libertarians often see environmentalists as
simply another group fighting to expand government, and are hostile as
a result.

– Libertarians are as subject to reflexive, partisan
position-taking as any one else. Because they are reflexively opposed
to government action, they find it easier to operate from a position of
skepticism in trying to bat down AGW scientific and economic arguments (and to slam the motives of those arguing that AGW
must be addressed by government) than to open-mindedly review the
evidence. This is a shame( but human), because it blunts the libertarian
message in explaining what libertarians understand very well – that
environmental problems arise when property rights over resources are
not clearly defined or enforceable, and also when governments
(mis)manage resources.

I`ve discussed a number of times how we all easily fall into partisan cognitive traps, as summarized here.

A related piece of the dynamic is that some libertarians may feel that if they agree that AGW may be a problem, that this will be taken – wrongly – by others in the political arena as a conclusion that the libertarian message is no longer relevant.

4. Some support for these points can be seen in Edwin Dolan`s 2006 paper, “Science, Public Policy and Global Warming: Rethinking the Market Liberal Position” (Cato), in which Dolan suggests that many libertarian climate skeptics are acting quite as
if they are “conservatives” of the type condemned by Friedrich Hayek. 
Dolan cites Hayek’s 1960 essay, “Why I am Not a Conservative” (1960),
in which Hayek identified the following traits that distinguish
conservatism from market liberalism:

• Habitual resistance to change, hence the term “conservative.”
• Lack of understanding of spontaneous order as a guiding principle of economic life.
• Use of state authority to protect established privileges against the forces of economic change.
• Claim to superior wisdom based on self-arrogated superior quality in place of rational argument.
• A propensity to reject scientific knowledge because of dislike of the consequences that seem to follow from it.

Further support is provided by Jonathan Adler, a libertarian law professor at Case Western who focusses on resource issues, and who has concluded that climate change is a serious concern, and that man is contributing to it. His February 2008 post, “Climate Change, Cumulative Evidence, and Ideology” (and the comment thread) is instructive:

“Almost every time I post something on climate
change policy, the comment thread quickly devolves into a debate over
the existence of antrhopogenic global warming at all. (See, for
instance, this post
on “conservative” approaches to climate change policy.) I have largely
refused to engage in these discussions because I find them quite
unproductive. The same arguments are repeated ad nauseum, and no one is
convinced (if anyone even listens to what the other side is saying). …

“Given my strong libertarian leanings, it would certainly be
ideologically convenient if the evidence for a human contribution to
climate change were less strong. Alas, I believe the preponderance of
evidence strongly supports the claim that anthropogenic emissions are
having an effect on the global climate, and that effect will increase
as greenhouse gases accumulate in the atmosphere. While I reject most
apocalyptic scenarios as unfounded or unduly speculative, I am
convinced that the human contribution to climate change will cause or
exacerbate significant problems in at least some parts of the world.
For instance, even a relatively modest warming over the coming decades
is very likely to have a meaningful effect on the timing and
distribution of precipitation and evaporation rates, which will, in
turn, have a substantial impact on freshwater supplies. That we do not
know with any precision the when, where, and how much does not change
the fact that we are quite certain that such changes will occur.

“So-called climate “skeptics” make many valid points about the
weakness or unreliability of many individual arguments and studies on
climate. They also point out how policy advocates routinely exaggerate
the implications of various studies or the likely consequences of even
the most robust climate predictions. Economists and others have also
done important work questioning whether climate risks justify extreme
mitigation measures. But none of this changes the fact that the
cumulative evidence for a human contribution to present and future
climate changes, when taken as a whole, is quite strong. In this
regard, I think it is worth quoting something Ilya wrote below about
the nature of evidence in his post about 12 Angry Men”:

People
often dismiss individual arguments and evidence against their preferred
position without considering the cumulative weight of the other side’s
points. It’s a very easy fallacy to fall into. But the beginning of
wisdom is to at least be aware of the problem.

“The “divide
and conquer” strategy of dissecting each piece of evidence
independently can make for effective advocacy, but it is not a good way
to find the truth”

I  noted the following in response to Adler:

I think that there are many Austrians who understand WHY there might
be a climate change problem to which man contributes, as the atmosphere
is an open-access resource, in which there are no clear or
enforceable property rights that rein in externalities or that give
parties with differing preferences an ability to engage in meaingful
transactions that reflect those preferences. 

But, flawed human beings that we are, we have difficulty truly
keeping our minds open (subconscious dismissal of inconsistent data is
a cognitive rule) and we easily fall into tribal modes of conflict that
provide us with great satisfaction in disagreeing with those evil
“others” while circling the wagons (and counting coup) with our
brothers in arms.

Sadly, this is very much in evidence in the thread to your own post.

5. I have pulled together a post that indicates that a number of libertarians are trying to engage in good faith on climate change, and which may also serve as a good introduction for interested readers to libertarian thinking on environmental issues.

6. Finally, let me note that many of the problems that concern libertarians also concern progressives, chief of these being the negative effects of state actions on communities, development and on open-access (and hitherto local, indigenous-managed) commons.  This is the same concern that the Nobel Prize committee expressed when extending the prize in Economics to Elinor Ostrom, signalling their desire for a change in international aid policy.

You might find these remarks by Nicholas Hildyard, Larry Lohmann, Sarah Sexton and Simon Fairlie in “Reclaiming the Commons” (1995) to be pertinent; domestic cap-and-trade is an enclosure of the atmospheric commons, for the benefit of firms receiving grants of permits and costs flowing regressively to energy consumers, and internationally represents a vast expansion of state authority and bureaucracies, with attendant enclosure of local resources:

The creation of empires and states, business conglomerates and
civic dictatorships — whether in pre-colonial times or in the modern
era — has only been possible through dismantling the commons and
harnessing the fragments, deprived of their old significance, to build
up new economic and social patterns that are responsive to the
interests of a dominant minority. The modern nation state has been
built only by stripping power and control from commons regimes and
creating structures of governance from which the great mass of humanity
(particularly women) are excluded. Likewise, the market economy has
expanded primarily by enabling state and commercial interests to gain
control of territory that has traditionally been used and cherished by
others, and by transforming that territory – together with the people
themselves – into expendable “resources” for exploitation. By enclosing
forests, the state and private enterprise have torn them out of fabrics
of peasant subsistence; by providing local leaders with an outside
power base, unaccountable to local people, they have undermined village
checks and balances; by stimulating demand for cash goods, they have
impelled villagers to seek an ever wider range of things to sell. Such
a policy was as determinedly pursued by the courts of Aztec Mexico, the
feudal lords of West Africa, and the factory owners of Lancashire and
the British Rail as it is today by the International Monetary Fund or
Coca-Cola Inc.

Only in this way has it been possible to convert peasants into
labour for a global economy, replace traditional with modern
agriculture, and free up the commons for the industrial economy.
Similarly, only by atomizing tasks and separating workers from the
moral authority, crafts and natural surroundings created by their
communities has it been possible to transform them into modern,
universal individuals susceptible to “management”. In short, only by
deliberately taking apart local cultures and reassembling them in new
forms has it been possible to open them up to global trade.[FN L.
Lohmann, ‘Resisting Green Globalism’ in W. Sachs (ed), Global Ecology:
Conflicts and Contradictions, Zed Books, London and New Jersey, 1993.]

To achieve that “condition of economic progress”, millions have
been marginalized as a calculated act of policy, their commons
dismantled and degraded, their cultures denigrated and devalued and
their own worth reduced to their value as labour. Seen from this
perspective, many of the processes that now go under the rubric of
“nation-building”, “economic growth”, and “progress” are first ad
foremost processes of expropriation, exclusion, denial and
dispossession. In a word, of “enclosure”.

Because history’s best-known examples of enclosure involved the
fencing in of common pasture, enclosure is often reduced to a synonym
for “expropriation”. But enclosure involves more than land and fences,
and implies more than simply privatization or takeover by the state. It
is a compound process which affects nature and culture, home and
market, production and consumption, germination and harvest, birth,
sickness and death. It is a process to which no aspect of life or
culture is immune. ..,

Enclosure tears people and their lands, forests, crafts,
technologies and cosmologies out of the cultural framework in which
they are embedded and tries to force them into a new framework which
reflects and reinforces the values and interests of newly-dominant
groups. Any pieces which will not fit into the new framework are
devalued and discarded. In the modern age, the architecture of this new
framework is determined by market forces, science, state and corporate
bureaucracies, patriarchal forms of social organization, and ideologies
of environmental and social management.

Land, for example, once it is integrated into a framework of
fences, roads and property laws, is “disembedded” from local fabrics of
self-reliance and redefined as “property” or “real estate”. Forests are
divided into rigidly defined precincts – mining concessions, logging
concessions, wildlife corridors and national parks – and transformed
from providers of water, game, wood and vegetables into scarce
exploitable economic resources. Today they are on the point of being
enclosed still further as the dominant industrial culture seeks to
convert them into yet another set of components of the industrial
system, redefining them as “sinks” to absorb industrial carbon dioxide
and as pools of “biodiversity”. Air is being enclosed as economists
seek to transform it into a marketable “waste sink”; and genetic
material by subjecting it to laws which convert it into the
“intellectual property” of private interests.

People too are enclosed as they are fitted into a new society where
they must sell their labour, learn clock-time and accustom themselves
to a life of production and consumption; groups of people are redefined
as “populations’, quantifiable entities whose size must be adjusted to
take pressure off resources required for the global economy. …

enclosure transforms the environment into a “resource” for national or
global production – into so many chips that can be cashed in as
commodities, handed out as political favours and otherwise used to
accrue power. …

Enclosure thus cordons off those aspects of the environment that are
deemed “useful” to the encloser — whether grass for sheep in 16th
century England or stands of timber for logging in modern-say Sarawak
— and defines them, and them alone, as valuable. A street becomes a
conduit for vehicles; a wetland, a field to be drained; flowing water,
a wasted asset to be harnessed for energy or agriculture. Instead of
being a source of multiple benefits, the environment becomes a
one-dimensional asset to be exploited for a single purpose – that
purpose reflecting the interests of the encloser, and the priorities of
the wider political economy in which the encloser operates….

Enclosure opens the way for the bureaucratization and enclosure of
knowledge itself. It accords power to those who master the language of
the new professionals and who are versed in its etiquette and its
social nuances, which are inaccessible to those who have not been to
school or to university, who do not have professional qualifications,
who cannot operate computers, who cannot fathom the apparent mysteries
of a cost-benefit analysis, or who refuse to adopt the forceful tones
of an increasingly “masculine” world.

In that respect, as Illich notes, “enclosure is as much in the
interest of professionals and of state bureaucrats as it is in the
interests of capitalists.” For as local ways of knowing and doing are
devalued or appropriated, and as vernacular forms of governance are
eroded, so state and professional bodies are able to insert themselves
within the commons, taking over areas of life that were previously
under the control of individuals, households and the community.
Enclosure “allows the bureaucrat to define the local community as
impotent to provide for its own survival.”[FN I Illich, ‘Silence is a
Commons’, The Coevolution Quarterly, Winter 1983.] It invites the
professional to come to the “rescue” of those whose own knowledge is
deemed inferior to that of the encloser.

Enclosure is thus a change in the networks of power which enmesh
the environment, production, distribution, the political process,
knowledge, research and the law. It reduces the control of local people
over community affairs. Whether female or male, a person’s influence
and ability to make a living depends increasingly on becoming absorbed
into the new policy created by enclosure, on accepting — willingly or
unwillingly — a new role as a consumer, a worker, a client or an
administrator, on playing the game according to new rules. The way is
thus cleared for cajoling people into the mainstream, be it through
programmes to bring women “into development”, to entice smallholders
“into the market” or to foster paid employment.[FN P. Simmons, ‘Women
in Development’, The Ecologist, Vol. 22, No.1, 1992, pp.16-21.]

Those who remain on the margins of the new mainstream, either by
choice or because that is where society has pushed them, are not only
deemed to have little value: they are perceived as a threat. Thus it is
the landless, the poor, the dispossessed who are blamed for forest
destruction; their poverty which is held responsible for
“overpopulation”; their protests which are classed as subversive and a
threat to political stability. And because they are perceived as a
threat, they become objects to be controlled, the legitimate subjects
of yet further enclosure. …

People who would oppose dams, logging, the redevelopment of their
neighbourhoods or the pollution of their rivers are often left few
means of expressing or arguing their case unless they are prepared to
engage in a debate framed by the languages of cost-benefit analysis,
reductionist science, utilitarianism, male domination — and,
increasingly, English. Not only are these languages in which many local
objection — such as that which holds ancestral community rights to a
particular place to have precedence over the imperatives of “national
development” — appear disreputable. They are also languages whose use
allows enclosers to eavesdrop on, “correct” and dominate the
conversations of the enclosed. …

Because they hold themselves to be speaking a universal language,
the modern enclosers who work for development agencies and governments
feel no qualms in presuming to speak for the enclosed. They assume
reflexively that they understand their predicament as well as or better
than the enclosed do themselves. It is this tacit assumption that
legitimizes enclosure in the encloser’s mind – and it is an assumption
that cannot be countered simply by transferring what are
conventionbally assumed to be the trappings of power from one group to
another….

A space for the commons cannot be created by economists,
development planners, legislators, “empowerment” specialists or other
paternalistic outsiders. To place the future in the hands of such
individuals would be to maintain the webs of power that are currently
stifling commons regimes. One cannot legislate the commons into
existence; nor can the commons be reclaimed simply by adopting “green
techniques” such as organic agriculture, alternative energy strategies
or better public transport — necessary and desirable though such
techniques often are. Rather, commons regimes emerge through ordinary
people’s day-to-day resistance to enclosure, and through their efforts
to regain livelihoods and the mutual support, responsibility and trust
that sustain the commons.

That is not to say that one can ignore policy-makers or
policy-making. The depredations of transnational corporations,
international bureaucracies and national governments cannot be allowed
to go unchallenged. But movements for social change have a
responsibility to ensure that in seeking solutions, they do not remove
the initiative from those who are defending their commons or attempting
to regenerate common regimes — a responsibility they should take
seriously.

Might there be good reason NOT to rush into a vast expansion of government world-wide?

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.

http://mises.org/daily/1760

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).

6.   Rob Bradley cheers on coal, but are all those who want to better manage commons and environmental impacts “Malthusian” idiots, or only in the case of coal?, Feb 5 2009:

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.

April 22, 2009 at 2:11 pm

•  
  • 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. …

    
    
  • April 23, 2009 at 2:48 am

    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/

Elinor Ostrom awarded the Nobel prize in economics? Who? no doubt some of you are wondering.

Well, sharp-eyed readers will have noted that I have referred to her any number of times (which I will reprise later, as this post has gotten too lengthy).

I excerpt below some of the praise Elinor Ostrom has been receiving from Austrian economists familiar with her (emphasis added).

1.  First, though, from the press release:

Elinor Ostrom has demonstrated how common property can be successfully managed by user associations. Oliver Williamson has
developed a theory where business firms serve as structures for conflict resolution. Over the last three decades these seminal
contributions have advanced economic governance research from the fringe to the forefront of scientific attention.

Economic transactions take place not only in markets, but also within firms, associations, households, and agencies. Whereas economic theory has comprehensively illuminated the virtues and limitations of markets, it has traditionally paid less attention to other institutional arrangements. The research of Elinor Ostrom and Oliver Williamson demonstrates that economic analysis can shed light on most forms of social organization.

Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.

The background explanation is useful and contains a pointed criticism of many centrally-directed approaches to common pool resources (emphasis added):

If we want to halt the degradation of our natural environment and prevent a repetition of the many collapses of natural-resource stocks experienced in the past, we should learn from the successes and failures of common-property regimes. Ostrom’s work teaches us novel lessons about the deep mechanisms that sustain cooperation in human societies.

It has frequently been suggested that common ownership entails excessive resource utilization, and that it is advisable to reduce utilization either by imposing government regulations, such as taxes or quotas, or by privatizing the resource. The theoretical argument is simple: each user weighs private benefits against private costs, thereby neglecting the negative impact on others.

However, based on numerous empirical studies of natural-resource management, Elinor Ostrom has concluded that common property is often surprisingly well managed. Thus, the standard theoretical argument against common property is overly simplistic. It neglects the fact that users themselves can both create and enforce rules that mitigate overexploitation.
The standard argument also neglects the practical difficulties associated with privatization and government regulation. …

There are many …. examples which indicate that user-management of local resources has been more successful than management by outsiders. …

[T]he main lesson is that common property is often managed on the basis of rules and procedures that have evolved over long periods of time. As a result they are more adequate and subtle than outsiders – both politicians and social scientists – have tended to realize. Beyond showing that self-governance can be feasible and successful, Ostrom also elucidates the key features of successful governance. One instance is that active participation of users in creating and enforcing rules appears to be essential. Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctioning are the responsibility of the state and should be conducted by public employees.

2.  Words of praise from libertarians:

Vernon L. Smith (2002 Nobel laureate for economics), Forbes, October 12:

For many of us she has long occupied our radar screen. Let me tell you why.

Relentlessly, Ostrom has pursued answers to two questions:

(1)
Since “everybody’s property is nobody’s property,” how is it that there
are so many cases where collectives of ordinary people with no
education and with none of the economists’ knowledge of “the tragedy of
the commons,” in fact discover ingenious rules (institutions) for
taking the “tragedy” out of a productive resource they hold in common? …

Numerous other examples include Japanese lands held by thousands in
common under governance structures that avoided “tragedy;” also ancient
solutions to communal water and irrigation systems that create
effective enough private rights conferring benefits and costs that
constrain use. This should not be too surprising, because “property
(originally propriety) rights” are about human rights and the challenge of defining them incentive-compatibly for mutual benefit.

(2)
As a distinguished political-economic scientist she will be the first
to tell you that there are also plenty of commons problems that
represent institutional failures and fragilities; she has asked why,
and what makes the difference between success and failure? The
fragilities include inshore fisheries and groundwater basins with
continuing commons problems; failures include salt water fisheries and
irrigation systems hamstrung by the complexity of the rules.

Success is associated with clarity in the definition of and
bounds on individual rights (and opportunities) to take action, and the
geography of the commons; details for monitoring, operations, sanctions
and mechanisms for conflict resolution emerge from within the
collective and out of motivated people’s direct experience with
environmental context and each other. When too many of these
problem-solving elements fail, the governance systems fail or require
continuing attention to their fragility characteristics. A fatal source
of disintegration is the inappropriate application of uninformed
external authority, including intervention to prevent application of
efficacious rules to political favorites. Also detrimental to good solutions is the OPM (other people’s money) problem.

Peter Boettke, The Austrian Economists, October 12:

I told David [Henderson] that she is amazing and well deserving of the Nobel award for her pioneering work on rational choice theory (as if the choosers were human) and institutional analysis.  I then bent his ear about her work on governing the commons, institutional diversity, and learning. …

What Lin’s work demonstrates … is how individuals can in a variety of settings work to find (or stumble upon) institutional solutions that promote social cooperation and human betterment.  It is about voluntary civic association, a subset of which is commercial life, that her works highlights; not the absence of individual choice.  … My blurb on the back of her book, Understanding Institutional Diversity reads as follows: “What emerges from Elinor Ostrom’s book is precisely what the title suggests — an understanding of the diverse nature of institutions that exist in human societies to promote human cooperation or to hinder it.”

She is both a methodological individualist (rightly understood) and a spontaneous order theorists.  In this regard, Lin Ostrom (and Vincent) have represented one manifestation of the research program in the sciences of man (praxeology) by Mises and Hayek in the 1940s.  Actors of limited cognitive capabilities are studied for how the[y] shape and our [sic] shaped by the social structures that emerge in a variety of situations to provide voluntary solutions to complex and difficult problems, and they do so in a way that promotes social cooperation under the division of labor.  Read Human Action, chapter VIII, and Individualism: True and False, pp. 11-14 (in Individualism and Economic Order), and then look at Lin’s work in Governing the Commons; Understanding Institutional Diversity; and the 3 volume McGinnis, edited volumes, Readings from the Workshop in Political Theory and Policy Analysis and I think you will see what I am talking about. She has done fundamental research on the central idea of Ricardo’s Law of Association as Mises termed it.  Humanly rational choice and institutional analysis combine to address the most pressing question in the social world — why do some institutional patterns produce societies of peace and prosperity, while others produce societies that suffer under violence and poverty? …

Lin Ostrom is firmly seated in the mainline tradition of economic scholarship from Adam Smith and David Hume to F. A. Hayek and James Buchanan …..  [H]er methods were chosen to be appropriate to the task she was pursuing.  Humanly rational choice, institutional analysis, field work, and experimental design were her tools for social understanding.  She did not limit her work to that of Max U notions of “choice” nor instituitonally antiseptic models of ‘markets’ nor one size fits all models of economic development.  Instead, she has been a major contributor to public choice economics, new institutional economics, and to our understanding of polycentricity and political economy.

[in comment] At the
home page for her institute — The Workshop in Political Theory and
Policy Analysis — they describe their work as a New Science of
Governance for a New Age. And they describe their task as follows: “The
betterment of humankind depends on the ability of fallible human beings
to make decisions, manage resources, and govern themselves. This is the
basis of democracy, and of civilization itself. It is also the basis
for more than 30 years of research and inquiry at the Workshop in
Political Theory and Policy Analysis at Indiana University in
Bloomington.

The Workshop’s teaching and research probes the inner workings of
human institutions—structures of rules used to govern people and
resources, in this usage—in order to better understand what works and
what does not. Institutions affect every facet of life, from public
services to family and community structures to natural resources and
beyond, and the Workshop’s research helps people design and adapt their
institutions so that they generate better outcomes.”

This is why the work is so intriguing. First, at the core is a model
of man as fallible — cognitively limited. Second, is a focus on the
emergence of institutions — not necessarily state-led institutional
impositions. Third, is a focus on governance, not government.

Peter Boettke, comment at Marginal Revolution, October 13:

She is a former President of the Public Choice Society, as was
Vincent. She uses game theory, she engages in institutional analysis,
she has conducted experiements in the lab, she has conducted field work
both in the US and abroad, she considers herself a political economist,
etc. Her presidential address to the APSA summed up her theoretical agenda as “A Behavioral Approach to the Rational Choice Theory of Collective Action.”

She
is most deserving of this Nobel, and she has made a unique contribution
theoretically and empirically to the study of self-governance. But
there is no need to pick a fight where one isn’t there. Her prize fits
nicely in a stream of recognitions ANALYTICALLY
by the committee to scholars such as Hayek (1974), Buchanan (1986),
Coase (1991), North (1993), and V. Smith (2002). These are all scholars
within the discipline of economics/political economy that recognize the
cognitive limitations of man, and focus analytical effort on
institutional analysis.

Lin Ostrom’s contributions come from
an analytical framework that grounded in rational choice theory (as if
the choosers are human) and builds to an institutional analysis (as if
history mattered). The distinction between “rules in form” and “rules
in use” means she studies in close detail the social norms that
underlie self-governance in the management of resources and the
management of social relationships.

It is amazing body of work.

Alex Tabarrok, Marginal Revolution, October 12:

Elinor Ostrom may arguable [sic] be considered the mother of field work in development economics.  She has worked closely investigating water associations in Los Angeles, police departments in Indiana, and irrigation systems in Nepal.  In each of these cases her work has explored how between the atomized individual and the heavy-hand of government there is a range of voluntary, collective associations that over time can evolve efficient and equitable rules for the use of common resources.

With her husband, political scientist Vincent Ostrom, she established the Workshop in Political Theory and Policy Analysis in 1973 at Indiana University, an extraordinarily productive and evolving association of students and professors which has produced a wealth of theory, empirical studies and experiments in political science and especially collective action.  The Ostrom’s work bridges political science and economics.  Both are well known at GMU since both have been past presidents of the Public Choice society and both have been influenced by the Buchanan-Tullock program.  You can also see elements of Hayekian thought about the importance of local knowledge in the work of both Ostroms (here is a good interview).  My colleague, Peter Boettke has just published a book on the Ostrom’s and the Bloomington School.

Elinor Ostrom’s work culminated in Governing the Commons: The Evolution of Institutions for Collective Action which uses case studies to argue that around the world private associations have often, but not always, managed to avoid the tragedy of the commons and develop efficient uses of resources.  (Ostrom summarizes some of her findings from this research here).  Using game theory she provided theoretical underpinnings for these findings and using experimental methods she put these theories to the test in the lab.

For Ostrom it’s not the tragedy of the commons but the opportunity of the commons.  Not only can a commons be well-governed but the rules which help to provide efficiency in resource use are also those that foster community and engagement.  A formally government protected forest, for example, will fail to protect if the local users do not regard the rules as legitimate.  In Hayekian terms legislation is not the same as law.  Ostrom’s work is about understanding how the laws of common resource governance evolve and how we may better conserve resources by making legislation that does not conflict with law.

Bob Subrick, Stationary Bandit, October 12:

Ostrom’s “Governing the Commons” develops Hayek’s theme of spontaneous order through numerous real world examples.  Non-market institutions solve collective action problems that the price mechanism cannot.  That is the point of Hayek’s later writings– non-market institutions coordinate behavior.  Also, her emphasis on the lack of a “one-size-fits-all” approach resonates with those who are sympathetic to Hayek.

Paul Romer, Charter Cities, October 12:

Elinor’s fieldwork, followed up by her experimental work, pointed us in exactly the right direction. To understand BOTH why we don’t need police officers in some cases AND
why police officers don’t follow the rules in other cases, we have to
expand models of human preferences to include a contingent taste for
punishing others. In reaching this conclusion, she arrived at a point
similar to that reached by Avner Greif (whom the Nobel committee
correctly cites.) They, more than anyone else in the profession,
spelled out the program that economists should follow. To make the
rules that people follow emerge as an equilibrium outcome instead of a
skyhook, economists must extend our models of preferences and gather
field and experimental evidence on the nature of these preferences.

Economists
who have become addicted to skyhooks, who think that they are doing
deep theory but are really just assuming their conclusions, find it
hard to even understand what it would mean to make the rules that
humans follow the object of scientific inquiry. If we fail to explore
rules in greater depth, economists will have little to say about the
most pressing issues facing humans today – how to improve the quality
of bad rules that cause needless waste, harm, and suffering.

Cheers
to the Nobel committee for recognizing work on one of the deepest
issues in economics. Bravo to the political scientist who showed that
she was a better economist than the economic imperialists who can’t
tell the difference between assuming and understanding.

Lynne Kiesling, Knowledge Problem, October 12:

Both Ostrom’s work on governance institutions and common-pool resources
and Williamson’s work on governance institutions and the transactional
boundary of the firm contribute meaningfully to our understanding of
how individuals coordinate their plans and actions in decentralized,
complex systems. …

Ostrom’s work highlights the ability of communities of
individuals, using their local knowledge and taking into account their
individual preferences and constraints, to develop governance
institutions that enable beneficial outcomes to emerge. As I put it in my book on institutional design in electricity,

Given the pervasiveness of incomplete property rights,
even in commercial transactions, how are we able to engage in so much
mutually beneficial exchange? We achieve it through the design of
institutions to govern the commons (Ostrom 1990, 2005). These
institutions can specify use rights, means for enforcing those use
rights, and penalties for violating those rights. Again, defining and
enforcing use rights is costly, but institutional design to do so
happens when its benefits are high enough, and the institutional form
varies depending on the environment and context.

The Ostrom works cited therein, Governing the Commons and Understanding Institutional Diversity,
are full of rich insights that can be applied to environmental policy,
regulation, economic development, and many other areas of economics and
political science.

David R. Henderson, WSJ, October 12:

… I think it’s a great choice. The reason is that mainstream economics
has become highly mathematical and increasingly independent from
reality. Many economists sit in their offices and derive proofs. Few go
out and do the time-consuming work of examining the institutional
structures that humans build to solve their own real-world problems.
Among those few are Ms. Ostrom and Mr. Williamson.

Both draw on rich data from outside the field of economics. Ms.
Ostrom draws much of hers from case studies of common-property
resources and Mr. Williamson from business historians such as the late
Alfred Chandler. Some have summarized their work by saying that
institutions other than free markets often work well. But that
statement can mislead you to conclude that government solutions are the
answer. Free markets are only a subset of free institutions. A better
way to sum up their work is that what Ms. Ostrom and Mr. Willamson
really show is that voluntary associations work. …

Most economists are familiar with the late Garrett Hardin‘s classic
article, “The Tragedy of the Commons.” His idea was that when no one
owns a resource, it is overused because no one can control its usage
and each person has an incentive to use it before others do. This
insight has helped us understand much human behavior and has led people
to advocate either having the resource privately owned or having it
controlled by government.

Not so fast, said Ms. Ostrom.
Examining dozens of case studies, she found cases of communal ownership
that worked—that is, that didn’t lead to the tragic outcomes envisioned
by Hardin—as well as ones that didn’t. Were there systematic
differences? Yes, and interestingly the ones that worked did have a
kind of property rights system, just not private ownership.

Based on her work, Ms. Ostrom proposed
several rules for managing common-pool resources, which the Nobel
committee highlights. Among them are that rules should clearly define
who gets what, good conflict resolution methods should be in place,
people’s duty to maintain the resource should be proportional to their
benefits, monitoring and punishing is done by the users or someone
accountable to the users, and users are allowed to participate in
setting and modifying the rules. Notice the absence of top-down
government solutions. In her work on development economics, Ms. Ostrom
concludes that top-down solutions don’t help poor countries. Are you
listening, World Bank?

In a 2006 article with Harini Nagendra, Ms. Ostrom wrote: “We
conclude that simple formulas focusing on formal ownership,
particularly one based solely on public [government] ownership of
forest lands, will not solve the problem of resource use.” …

Economists talking about real humans and not mathematical
abstractions and winning the Nobel prize for it? Good on ya, Nobel
committee.

John V.C. Nye, Forbes, October 12:

Oliver Williamson and Elinor Ostrom are both leaders in the growing
field of the New Institutional Economics. Both can be seen as pioneers
in understanding how markets work in the real world where transactions
costs are high, establishing smoothly functioning markets is costly,
information is incomplete, and hiring and production options are
limited. They show how firms, communities and organizations come to
solve these problems absent government regulation and how the choices
they make can be disrupted or worsened by bad state policy or sustained
by good rules that promote stable property rights and reliable contracts. …

Elinor operationalized the core insight of Ronald Coase that
creating and accessing markets is often quite costly and hence
organization, hierarchy and collective agreement can, under the right
conditions, serve as viable or even superior alternatives to market
competition. While the lack of private property often leads to the
tragedy of the commons, it is surprising how often tragedy has been
avoided throughout the world. The answer is that small groups with
tight social structures can substitute community monitoring and peer
controls for a market that is non-existent and private property that is
neither well-defined nor reliably enforced. Of course, such local
enforcement tied to community norms, moral suasion, and restricted
geographical domains does not scale well to the modern world of
extensive impersonal exchange. But she has studied areas as diverse as
police departments in Indiana to irrigation in Nepal.

But as
Elinor has demonstrated, ham-fisted reforms that attempt to bring the
illusion of modernity to the developing world by a naive adoption of
Western best-practice laws without the structures that support and
enforce those rules often leads to a destruction of indigenous practice
that works reasonably well without substituting a functioning and
reliable market of impersonal exchange. Much of the disaster that is
foreign aid can be tied to the blunt importation of best-practice rules
without understanding how their implementation interacts with existing
practice.

Her work centers on a variety of case studies of
private associations throughout the world but is tied to the mainstream
methodologies in the social sciences through her use of game theory
and related analysis. She also tests her hypotheses in various
laboratory experiments designed to isolate the core behavioral
assumptions and in so doing continues in the tradition begun by
Nobelist Vernon Smith. Moreover, her work on real-world institutions
and the rules that sustain efficient outcomes is a natural complement
to the work of laureate Douglass North who also draws upon the ideas of
Coase and Williamson in understanding how political and social
institutions promote or retard growth.

Greg Ranson, Taking Hayek Seriously, October 13:

Peter Boettke, Lynne Kiesling, Peter Klein, Vernon Smith, David Henderson, Don Boudreaux,
and other Hayekian economists are all applauding the award of the Nobel
Prize in Economics to Lin Ostrom and Oliver Williamson. …

In many ways Ostrom & Williamson are very much contributing to an
intellectual tradition championed by Hayek and other leading
“Hayekians” like James Buchanan and Douglass North.

Henry Farrell, Crooked Timber, October 12:

[T]his is also a very interesting statement of what the Nobel committee see as important in economics.

Lin’s work focuses on the empirical analysis of collective goods problems –
how it is that people can come up with their own solutions to problems
of the commons if they are given enough room to do so. Her landmark
book, Governing the Commons, provides an empirical rejoinder
to the pessimism of Garret Hardin and others about the tragedy of the
commons – it documents how people can and do solve these problems in
e.g the management of water resources, forestry, pasturage and fishing
rights. She and her colleagues gather large sets of data on the
conditions under which people are or are not able to solve these
problems, and the kinds of rules that they come up with in order to
solve them.

This is … a vote in favor of detailed, working-from-the-ground-up, empirical work, which doesn’t rely on
sharply contoured theoretical simplifications and flashy statistical
techniques so much as the accumulation of good data, which reflects the
messiness of the real social institutions from which it is gathered.
Quoting from Governing the Commons:

“An important challenge facing policy scientists is to develop theories of
human organization based on realistic assessment of human capabilities
and limitations in dealing with a variety of situations that initially
share some or all aspects of a tragedy of the commons. … Theoretical
inquiry involves a search for regularities … As a theorist, and at
times a modeler, I see these efforts [as being] at the core of a policy
science. One can, however, get trapped in one’s own intellectual web.
When years have been spent in the development of a theory with
considerable power and elegance, analysts obviously will want to apply
this tool to as many situations as possible. The power of a theory is
exactly proportionate to the diversity of situations it can explain.
All theories, however, have limits. Models of a theory are limited
still further because many parameters must be fixed in a model, rather
than allowed to vary. Confusing a model – such as that of a perfectly
competitive market – with the theory of which it is one representation
can limit applicability still further. (pp.24-25)”

One plausible characterization of her life’s work is that it is about
demonstrating the empirical weaknesses of a ‘cute’ economic model (the
Tragedy of the Commons) that assumed a role in policy discussions far
out of proportion to its actual explanatory power, and replacing it
with a set of explanations that are nowhere near as neat, but are far
more true to the real world. …

It is also a vote in favor of supplementing quantitative work with
qualitative understanding – Lin spends a lot of time (albeit less than
she used to) in the field, soaking up practical knowledge which informs
her work in striking ways. She is hands-on in a way that very few
economists, political scientists or sociologists are. It is also
interesting to note that the Nobel committee pays specific attention to the political implications of her work.

“Elinor Ostrom has challenged the conventional wisdom that common property is
poorly managed and should be either regulated by central authorities or
privatized. Based on numerous studies of user-managed fish stocks,
pastures, woods, lakes, and groundwater basins, Ostrom concludes that
the outcomes are, more often than not, better than predicted by
standard theories.”

This reflects what she and her husband Vincent refer to as “polycentricity,” a normative approach to
governance which stresses the degree to which higher levels of
government should not crowd out self-organization at lower levels. Her
work implies that both pure marketization and top-down government
control can have badly adverse consequences for resource management,
because they rob individuals of the capacity to govern themselves, and
because they both lead to the depletion of important forms of local
collective knowledge. … Ostrom stresses repeatedly that even the best
functioning markets are undergirded by an array of collective
institutions which order people’s market interactions, and that in the
absence of such rules, self interested behaviour will have highly
adverse consequences.

Greg Ransom, Taking Hayek Seriously, October 14:

Elinor Ostrom Endorses Hayek’s Model of Economic Science

See Elinor Ostrom & Charlotte Hess, “Ideas, Artifacts, and Facilities: Information as a Common-Pool Resource”.

Ostrom also frequently cites Hayek’s work on social rules and local knowledge in many of her books & book articles and in her journal publications.

Most frequently Ostrom cites Hayek’s Law, Legislation and Liberty and Hayek’s “The Use of Knowledge in Society”.

As economist Art Carden says, “Ostrom’s win can be considered a win for the Hayekian worldview as opposed to the Samuelsonian worldview.”

This is my third follow-up post to “Grist and the tragedy of the panicked enviro“,
where I try to clarify the institutional frameworks for understanding
and addressing resource problems, in response to confusion in comments
by others.

cyberfarer
Posted 9:26 pm
27 Aug 2009

… [addressed to T Worstall]

In fact I do
understand what Hardin was saying. Hardin sets up a hypothetcial
situation and then sets about knocking it down. We call that a strawman
argument.

But you didn’t address my salient point. We live in an
era of the ascendency of private property and yet we have witnessed an
acceleration of the destruction of our natural heritage. Under the
management and control of private interests, we can witness the
remaining rain forests of south east Asia being raised for palm oil
plantations. Under the control and and management of private interests
we can witness boreal forests being decimated. In fact, over the past
fifty years as control and managenment of resources to pass to private
interests, we witness the acceleration of the their destruction.

The reality puts the lie to Hardin’s strawman argument.

The
issue of sustainability is not one of private or public ownership as
The Church and its followers would prefer to frame it. The issue is the
central role of profit above all else in our culture.

The free
market economy generates wealth by converting a living planet to a dead
planet; that is, by converting living ecosystems into commodities for
trade and profit. To the free market and its economists, a forest which
provides erosion control, flood control, climate and water
conditioning, habitat, sustenance, and any number of other services not
only to humans but all other species is only valuable in our free
market system when it has been converted to lumber or pulverized for
paper or some other use. That is the true tragedy of the commons. Not
ownership, but the short-sighted stupidity of people and especially of
those worship wealth without understanding its source.

TokyoTom
Posted 2:29 am
29 Aug 2009

cyberfarer, I`m sorry, but this couldn`t be more wrong in its
understanding of WHY messes happen (and they undeniably do); the result
is that you (and Sacks) have no clue where to start in trying to solve
problems:

The free market economy generates wealth by converting a living planet
to a dead planet; that is, by converting living ecosystems into
commodities for trade and profit.

The
free market system is really simply people trading what they have to
others for what they want, and it works quite well where resources are
owned (either privately or by communities).  It can, however, be a
powerful engine of destruction for resources that are not owned – such
as for resources sourced where property rights are not protected or the
government (elites) “own” too much.  Thus our continued political
struggles over giveaways of public resources, the destruction of the
Amazon/Indonesian forests (and Philippine under Marcos), and the
collapse of fisheries that fishermen – often just guys trying to make a
living – have no rights to actually protect the resource.

To the free market and its
economists, a forest which provides erosion control, flood control,
climate and water conditioning, habitat, sustenance, and any number of
other services not only to humans but all other species is only
valuable in our free market system when it has been converted to lumber
or pulverized for paper or some other use. That is the true tragedy of
the commons.

You
are only right in part, as all of these things have obvious value, and
people protect them privately or band together as groups to manage them
wherever they desire and can (and are not prevented by the government).
There is an awful lot of private and community conservation going on
around the world.  The absolute worst cases are where the resources are
owned by governments, with rights to exploit being leased to companies
that have no property rights and thus no longer-term rights or obligations. 

Not ownership, but the short-sighted stupidity of people
and especially of those worship wealth without understanding its source.

No,
absolutely ownership; people and groups compete for resources, and can
preserve valuable ones only when they can PROTECT them by excluding
others (i.e., owning) them

You, like Sacks, think that the only
way to solve problems is to radically change either capitalism (while
ignoring worse destruction takes place outside of free market regimes)
or human nature.  Sorry, but this is blind and stupid, and ignores the
fact that local traction is available for most problems.

See the case of the Amazon, for example:

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

I
highly recommend you start studying (not simply free thinking), which
will make your very legitimate concerns much more effective.  I mean,
even the environmental groups are calling for better property
rights/protection for fisheries, species, forests and water.  Are they
stupid and evil too?

This is the second follow-up to my post “Grist and the tragedy of the panicked enviro“,
where I try to clarify the institutional frameworks for understanding
and addressing resource problems, in response to confusion in comments
by others.

T Worstall
Posted 5:27 pm
27 Aug 2009

TokyoTom makes most of the points I would wish to make. Except for this
one: you clearly do not understand what Hardin was saying about the
tragedy of the commons. For example, he made very clear that there are
two possible solutions to the degradation of an open access resource.
We can have social (socialist) regulations and limitations or we can
have private (capitalist) property solutions. Those are his
descriptions BTW. Which works best depends upon the society and the
resource. He emphatically did NOT say that pricvate property sultions
were the only ones possible. And nor does any economist say that
private property solutions are the only ones either possible or
desirable. Try reading some Ronald Coase on transaction costs to see
why.

TokyoTom
Posted 10:03 pm
27 Aug 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/

This is the first of several follow-up posts to my post “Grist and the tragedy of the panicked enviro“, where I try to clarify the institutional frameworks for understanding and addressing resource problems, in response to confusion in comments by others.

cyberfarer
Posted 2:58 am
27 Aug 2009

I’m sorry, but the “tragedy of the commons” is utter B.S. The Western
world has pursued a course of private property and has managed to leave
ecological catastrophe in its wake. The “tragedy of the commons” and
other simplistic market morality fail to understand the essence of that
which it seeks to moderate, the capitalist consumer market premised on
profit and only profit.

The rate of exploitation and the decline
of resources, water, energy, fisheries, soil, minerals, etc., all
occured under a free market, private property paradigm. That is the
facts and the reality. Pretending it isn’t true and wishing for a
morality that doesn’t exist within the free market is juvenile and
counter-productive.

The “tragedy of the commons” represents a
hypothetical situation that does not occur in real life. 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. The money is in the resource and when the resource is
exhausted they will move on to the next one.

TokyoTom
Posted 1:38 pm
27 Aug 2009

Cyberfarer,

Thanks for your comments on the “tragedy of the
commons”. Though you are way off base, you provide an opportunity for
deeper discussion.

The tragedy of the unmanaged commons paradigm
is BS?  My flip response?  Go tell it to Gavin Schmidt at Real Climate,
who posted a perceptive essay in May on the tragedy of the commons
dynamics that are affecting climate and global climate policy
coordination. 
Did you miss this and the relatively productive discussion thread?

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.

On fish, you might note what the organization Defying Ocean’s End (cofounded by Conservation International, The Nature Conservancy,
Natural Resources Defense Council, The Ocean Conservancy, Wildlife
Conservation Society, The World Conservation Union, and World Wildlife
Fund) recently said:

http://www.defyingoceansend.org…

“Overfishing,
high bycatch rates, the use of gear types that damage habitat (like
trawls and dredges), and the large subsidies supporting fisheries
(totally over $15 billion per year) are all symptoms of an underlying
problem. In most fisheries that are exhibiting declines in
landings and revenues, overfishing, bycatch, and habitat damage,
actions that result in the symptoms are actually rational given the way
the fisheries are managed. In these fisheries, secure privileges to
catch certain amounts of fish are not specified, so naturally
individual fishermen compete to maximize their individual shares of the
catch. No incentives for conservation exist in this situation, because
every fish conserved can be caught by another fisherman. The
competition to maximize catch often results in a fishery “arms race”,
resulting in the purchase of multiple vessels, the use of powerful
engines and large vessels, and the use of highly efficient gear like
trawls.

“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.”

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).

The Grist online environmental magazine lent its pages this week to a pessimistic climate change activist, Adam D. Sacks, former director of the Center for Democracy and the Constitution.  Mr. Sacks, echoing a despairing piece (“Beyond the point of no return”) by Ross Gelbspan in Grist in Novermber 2007, in a piece entitled “The fallacy of climate activism” paints a remarkably grim and obviously heart-felt picture about the prospect of unstoppable climate change and other environmental challenges. 

While we may indeed be irretrievably embarked on what prove to be a very bumpy climate voyage, it`s Sack`s policy prescriptions that are most startling. Here are excerpts of the chief points:

In the 20 years since we climate activists began our work in earnest,
the state of the climate has become dramatically worse, and the change
is accelerating—this despite all of our best efforts.  Clearly
something is deeply wrong with this picture. …

Climate activists are obsessed with greenhouse-gas emissions and
concentrations.  Since global climate disruption is an effect of
greenhouse gases, and a disastrous one, this is understandable.  But it
is also a mistake. …

The first error is our failure to understand that greenhouse gases
are not a cause but a symptom, and addressing the symptom will do
little but leave us with a devil’s sack full of many other symptoms,
possibly somewhat less rapidly lethal but lethal nonetheless.

The root cause, the source of the symptoms, is 300 years of our
relentlessly exploitative, extractive, and exponentially growing
technoculture, against the background of ten millennia of hierarchical
and colonial civilizations.
This should be no news flash, but the seductive promise of endless
growth has grasped all of us civilized folk by the collective throat,
led us to expand our population in numbers beyond all reason and to
commit genocide of indigenous cultures and destruction of other life on
Earth.

To be sure, global climate disruption is the No. 1 symptom.  But if
planetary warming were to vanish tomorrow, we would still be left with
ample catastrophic potential to extinguish many life forms in fairly
short order: deforestation; desertification; poisoning of soil, water,
air; habitat destruction; overfishing and general decimation of oceans;
nuclear waste, depleted uranium, and nuclear weaponry—to name just a
few.  (While these symptoms exist independently, many are intensified
by global warming.)

We will not change course by addressing each of these as separate issues; we have to address root cultural cause. …

The second error is our stubborn unwillingness to understand that
the battle against greenhouse-gas emissions, as we have currently
framed it, is over.

It is absolutely over and we have lost.

We have to say so.

There are three primary components of escalating greenhouse-gas concentrations that are out of our control …

The most expert scientific investigators have been blindsided by the
velocity and extent of recent developments, and the climate models have
likewise proved far more conservative than nature itself.  Given that
scientists have underestimated impacts of even small changes in global
temperature, it is understandably difficult to elicit an appropriate
public and governmental response….

Bitter climate truths are fundamentally bitter cultural truths. 
Endless growth is an impossibility in the physical world, always—but always—ending
in overshot and collapse.  Collapse: with a bang or a whimper, most
likely both.  We are already witnessing it, whether we choose to
acknowledge it or not.

Because of this civilization’s obsession with growth, its demise is
100 percent predictable.  We simply cannot go on living this way. Our
version of life on earth has come to an end.

Moreover, there are no “free market” or “economic” solutions.  And
since corporations must have physically impossible endless growth in
order to survive, corporate social responsibility is a myth.  The only
socially responsible act that corporations can take is to dissolve. …

Some of our most important thinking happens while developing the
problem statement, and the better the problem statement the richer our
responses.  That’s why framing the global warming problem as
greenhouse-gas concentrations has proved to be such a dead end.

Here is the problem statement as it is beginning to unfold for me. 
We are all a part of struggling to develop this thinking together:

We must leave behind 10,000 years of civilization; this may be the
hardest collective task we’ve ever faced.  It has given us the
intoxicating power to create planetary changes in 200 years that under
natural cycles require hundreds of thousands or millions of years—but
none of the wisdom necessary to keep this Pandora’s Box tightly shut. 
We have to discover and re-discover other ways of living on earth.

We love our cars, our electricity, our iPods, our theme parks, our
bananas, our Nikes, and our nukes, but we behave as if we understand
nothing of the land and water and air that gives us life.  It is past
time to think and act differently.

If we live at all, we will have to figure out how to live locally
and sustainably.  Living locally means we are able get everything we
need within walking (or animal riding) distance. We may eventually
figure out sustainable ways of moving beyond those small circles to
bring things home, but our track record isn’t good and we’d better
think it through very carefully.

Likewise, any technology has to be locally based, using local
resources and accessible tools, renewable and non-toxic.  We have much
re-thinking to do, and re-learning from our hunter-gatherer forebears
who managed to survive for a couple of hundred thousand years in ways
that we with our civilized blinders we can barely imagine or understand

Desperate hopes notwithstanding, there are no high-tech solutions
here, only wishful thinking—the tools that got us into this mess are
incapable of getting us out.

All that being said, we needn’t discard all that we’ve learned, far from it. But we must use our knowledge with great discretion, and lock much of it away as so much nuclear weaponry and waste.

Time is running very short, but the forgiveness of this little blue
orb in a vast lonely universe will continue to astonish and nourish
us—if we only give it the chance.

Our obligation as activists, the first step, the essence, is to part the cultural veil at long last, and to tell the truth.

Wow.  It strikes me that though Sacks might very well be right the we have irreversibly embarked on a bumpy climate ride, are we to conclude not only that the best solution is to abandon civilization as we know it and live as hunter-gathers, but that we can actually persuade anyone to abandon the use of energy?  Not only does Sacks offer no prescription from getting here to where he thinks we need to go, but he completely ignores the institutional setting of the problems that concern him (tragedy of the commons), and thus any discussion of potential solutions (fprivate or community property institutions). Certainly environmentalists may wish to start experiments in alternative living – this might provide useful knowledge or even necessary in dire situations – but unless such experiments prove that they can provide shelter and sustenance for the world`s population, they will not address the needs of others who will make their own choices, based on modern civilization and technology.

I left a short message on the Grist comment thread, as follows:

ATokyoTom
Posted 2:32 am
27 Aug 2009

I`m with Dave, and more so.  There are no useful takeaways from
thise piece, because the author, while showing an understanding of
climate science, evinces no understanding of the institutional factors
that are driving climate change and other resource problems.

Garrett Hardin largely nailed the problem decades ago – the “Tragedy of the Commmons” that results when there are no clear or enforceable property rights (private or communmity) that enable users to protect resources from destructive exploitation.

(Examining
the environmental nightmare of the formerly communist countries, the
resource abuse in kleptocratic developing countries, and incompetent
bureaucracies, sweet insider deals and poorly managed “public” lands
and fisheries have subsequently informed us of the corollary problem –
the tragedy of the government commons.)

We understand both the nature of our problems, and the directions in which solutions lie.  Let`s have at at `em.

BTW, I realize that we have barely begun to scratch the surface on addressing climate change; this is a tragedy of the commons problem on which it appears we can have only marginal impacts at best.

For the benefit of the curious and/or idle reader, I`m cross-posting from my little-used personal blog a short post on the above topic and the ensuing conversation.

(I note that my inaugural post at this LvMI-hosted blog covered a related topic:   “Too Many or Too Few People? Does the market provide an answer?“.)

Wednesday, April 01, 2009

Planet’s First-Ever Mass-Extinction Precipitated by Humans

TokyoTom said…

Michael Tobis, a blogging climate scientist, kindly alerted me to his criticisms of Ron Bailey`s recent Reason post.

Here is my response to Michael:

Michael, thanks for the link and for twitting it to my attention.

I`m not sure you really want to get me started, but I won`t let that get in the way.

First,
of course, it`s regrettable that those on the left and right would both
rather fight than think seriously. There`s alot of middle ground, but
you can`t get there in war of words. I`ve criticized Ron for this,
but he deserves credit for accepting climate science and expressly
acknowledging and analyzing tragedy of the commons situations.

While
I think you have found an infelicitly stated portion of his piece,
clearly he`s trying to say that social collapse in the past might be
attributable to tragedy of the commons situation (where “proper
institutions for channeling individual striving into a process of
economic growth which ultimately promotes the public interest” were not
in place).

While there are other cause of collapse – wars,
climate shifts, disasters – do you really disagree with Ron`s point
that societies are vulnerable to collapse if they don`t establish
institutions that prevent ruinous exploitation of resources?

While
Ron focusses on economic freedom and rule of law (market institutions)
as checks on tragedies of the commons, he is familiar with (and
libertarians certainly accept) traditional, community-based property
rights systems can work just fine, though increasing demand (and use by
outsiders) might swamp them, or technology might make private property
more efficient.

I think that Ron is perfectly correct to note
that property rights and market institutions in free societies are
serving to check population growth.

The chief problem, of course
is that there are huge gaps outside individual Western countries: Where
are the property rights in the atmosphere, the oceans, the tropical
forests? As a result, we are steadily destroying whatever we can get
out hands on.

The related problem is that corrupt and/or inept
governments are often in the middle of these problems: e.g., the
Newfoundland cod fishery was destroyed under Canadian government
management, West coast salmon fisheries are similarly threatened, and
tropical forests are being converted to soybeans and oil palm because
governments don`t care to protect the rights of the natives who dwell
in them.

(The way governments fail libertarians are rather
attuned to; while it may grate to hear this after the gross
mismanagement of the Bush/neocon/Republicans, perhaps even liberals can
acknowledge that they have a point, even if they don`t want to listen
to fear of “socialism” from the right.)

Finding institutions to
end destructive exploitation and manage open-access commons is a real
struggle; Bailey points in the right direction for some solutions, but
he downplays the size of the task ahead and the need for those who care
to work at solutions.

More of my thoughts here:

Too Many or Too Few People? Does the market provide an answer?

Using the State to solve common resource problems?

Mises on fixing externalities: progress along the Kuznets curve is not magic, but the result of institution-building

Regards,

Tom

June 21, 2009 6:20 AM

I`ve done a bit of blogging over the past few weeks regarding the “The tragedy of climate commons” post by climate scientist Gavin Schmidt and ensuing discussion at the RealClimate website.  Schmidt wrote the post in response to the implied suggestion by Chip Knappenberger at the MasterResource blog that, since unilateral policy action by the US would by itself be unlikely to significantly affect future climate (given the the rapid growth in CO2 emissions by China, India etc.), the wisest course for the US would be to do nothing.  

Knappenberger has now responded to Schmidt, this time with a parable of his own.  Knappenberger has good points, but he and Schmidt are talking past each other.  Since Rob Bradley, CEO of the Institute for Energy Research (BTW, no longer funded by pro-carbon-tax Exxon, all of you Exxon-haters out there) and founder/manager of MasterResource, won`t let me post at his self-proclaimed “free-market energy blog”, I put up a few thoughts at RealClimate, which I copy below (one typo fixed and link added below):

Allow me to stir the pot a bit, as it doesn`t appear that anyone has noticed Chip Knappenberger`s response to Gavin, in tbe form of his own climate parable, using the “Emperor`s new clothes” theme.

http://masterresource.org/?p=2751

Waxman-Markey appears as the new clothes, with Chip apparently taking on the role of the bright and persistent voice of the insufficiently jaded little boy who can`t help but to see the truth, and bravely refuses to be cowed.

Some of the criticisms of W-M seem fair to me – after all, they manifest precisely the reasons that Jim Hansen has taken a strong stance in favor of more transparent and rebated carbon taxes over the pork and bureaucracy that comes with cap and trade.

1. But Chip is still failing to address the main premise of Gavin`s tragedy of the commons fisheries analogy: there is a commons problem that requires coordinated action (a multi-player, repeated Prisoner’s Dilemma), and the only way out requires initial measures at trust-building, with more effective measures to follow when the parties can agree on burden sharing and enforcement.

Thus Chip is simply perpetuating the problem that I have noted here:

“Unfortunately, what passes for discussion on climate change (and other environmental issues) is too often people talking past each other (frequently with all of the hallmarks of a tribal battle): some correctly see a looming commons problem that requires government regulation but ignore the risks of pork, partiality and wasted resources in the policies themselves, while others, not anxious for government to expand its regulatory purview, downplay or dismiss the resource problem and focus on the downsides of government action or the motives of those calling for government action (while ignoring those invested heavily in a status quo that is replete with moral hazard).

Capitalism, the destructive exploitation of the Amazon and the tragedy of the government-owned commons

2. Further, while Chip has good reason to criticize all of the pork that is loaded into the W-M hairshirt – there certain ARE plenty of corporate interests seeking to use climate policy to get sweet deals from government – it`s more than a bit coy of him to paint the critics of W-M as relative innocent truth-tellers, while somehow failing to note all of the sweet deals built into the status quo that fossil fuel firms, utilities, automakers and their investors have long enjoyed. (Not to mention that these interests have hardly been turned away from the W-M and other pork troughs.)

Chip`s convenient oversight might have something to do with the fact that the public advocacy firm he shares with Pat Michaels is funded by coal interests, as Marion Delgado points out in #677, and as I have previously discussed directly with Chip: Pat Michaels – scientist AND paid advocate. Correspondence with Chip Knappenberger.

It doesn`t end there, unfortunately, as Chip is posting on the “MasterResource” blog run by Rob Bradley, who is CEO of the coal-industry-funded Institute for Energy Research. For the sin of pointing out the political-favor-protection game that IER and MasterResource are engaged in, Rob Bradley has exercised his Constitutional right to ban me from the MasterResource blog (mid-conversation with, but without notice to, Chip, as it turns out).

So sure, let`s fight the pork as best we can, Chip, but let`s not ignore the fact since there are NO property rights in the atmosphere or climate, markets are not protecting it, but instead steadily producing an ever-growing tragedy of the commons. Care to acknowledge that, or to offer any suggestions?