Community Life; Economy and Markets A New Dismal Science -- “Happiness Economics”
Economy and Markets The Irrationality of "Economics"
Culture, Arts and Information; International The Improbable Success of Nollywood
Nobel Prize is a Milestone for the Commons Movement
Elinor Ostrom’s Award Disarms Those Who Say a Commons-based Society is Impossible.
Posted by Jay Walljasper
Photo by WFIU Public Radio from Flickr.com under a Creative Commons license (Attribution, NonCommercial).
The biggest roadblock standing in the way of many people’s recognition
of the importance of the commons came tumbling down when
Indiana University professor Elinor Ostrom won the Nobel Prize for
economics. She accepts the award in Stockholm with a lecture on December 8.
Over many decades Ostrom has documented how various communities manage
common resources ” grazing lands, forests, irrigation waters,
fisheries” equitably and sustainably over the long term. The Nobel
Committee’s recognition of her work effectively debunks popular
theories about the Tragedy of the Commons, which hold that private
property is the only effective method to prevent finite resources from
being ruined or depleted.
Awarding the world’s most prestigious economics prize to a scholar who
champions cooperative behavior greatly boosts the legitimacy of the
commons as a framework for solving our social and environmental
problems. Ostrom’s work also challenges the current economic
orthodoxy that there are few, if any, alternatives to privatization
and markets in generating wealth and human well being.
The Tragedy of the Commons refers to a scenario in which commonly held
land is inevitably degraded because everyone in a community is allowed
to graze livestock there. This parable was popularized by wildlife
biologist Garrett Hardin in the late 1960s, and was embraced as a
principle by the emerging environmental movement. But Ostrom’s
research refutes this abstract concept once-and-for-all with the real
life experience from places like Nepal, Kenya and Guatemala.
“When local users of a forest have a long-term perspective, they are
more likely to monitor each other’s use of the land, developing rules
for behavior,” she cites as an example. “It is an area that standard
market theory does not touch.”
(Garrett Hardin himself later revised his own view, noting that what
he described was actually the Tragedy of the Unmanaged Commons.)
Columbia University economist Joseph Stiglitz, also winner of a Nobel
prize, comments, “Conservatives used the Tragedy of the Commons to
argue for property rights, and efficiency was achieved as people were
thrown off the commons….What Ostrom has demonstrated is the existence
of social control mechanisms that regulate the use of the commons
without having to resort to property rights.”
The Nobel Committee’s choice of Ostrom is significant considering that
many winners of the prize since it was initiated in 1968 have been
zealous advocates of unrestricted markets, such as Milton Friedman,
whose selection helped fuel the rise of market theory as the be-all
end-all of economics since the 1980s. Policies based upon this narrow
worldview sparked the rise of corporate power and the diminishment of
government’s role in protecting the commons.
While right-wing thinkers scoffed at the possibility of resources
being shared in a way that maintains the common good, arguing that
private property is the only practical strategy to prevent this
tragedy, Ostrom’s scholarship shows otherwise.
“What we have ignored is what citizens can do and the importance of
real involvement of the people involved,” she explains.
A classic example of this are the acequias, a centuries-old tradition
of cooperative irrigation systems in New Mexico and Colorado where the
small flow of water available for agriculture is allocated by the
community as a whole through a democratic process.
Ostrom is the first woman to be awarded the Economics prize, which
some observers say helps explain her emphasis on the role of people’s
relationships in our economic arrangements rather than the focus on
individualized market choices expounded by many male winners of the
Nobel.
Equally noteworthy is the fact that Ostrom was not trained as an
economist, but as a political scientist“a factor that may be even more
useful in explaining her outside-the-box approach to economics.
Yale economist Robert Schiller, quoted in the New York Times, welcomed
the merging of the two fields. “Economics has become too isolated and
stuck on the view that markets are efficient and self-regulating. It
has derailed our thinking.”
Elinor Ostrom has always been explicit in recognizing the importance
of the commons“she helped found the International Association for the
Study of the Commons, also based at Indiana University“and her
selection as a Nobel Laureate marks an early milestone in the
emergence of a commons-based society. Her works shows that our
social, environmental and personal advancement depends on the
vitality of the commons as well as the market in our lives.
POSTED 9 DEC 2009
Reader Comments Write Your Own
Dear On the Commons
This is indeed wonderful news for those of us who believe that a shift from destructive international competition to creative global cooperation is not only possible - but necessary!
I work for an organisation called Simpol - the International Simultaneous Policy Organisation - that is based in this theory.
Congratulations to Ms Ostrom for her great work!
Diana Trimble www.simpol.org
Diana Trimble // 15 Oct, 2009
In response to T Heller, I stand by my words but want to emphasize that the main focus of my remarks was not on Hardin's work itself (who after all revised his views based on the kind of research Elinor Ostrom was doing) but on those who interpreted his work to mean that a commons is always a tragedy. This title for his famous Science magazine article was probably an unfortunate one, and gave ammunition to market zealots who preach private property as the solution to all ills.
The tragedy is not due to the commons, but to reckless and selfish overuse of the commons-- the tragedy of the unmanaged commons, as Hardin later put it.
Jay Walljasper // 20 Oct, 2009
Jay-
Wanted to let you know I appreciate your reply. It seems that Hardin's work and your post suffered the same flaw: its title! ;-)
T Heller // 23 Oct, 2009
I remember more than one professor during my college days using Hardin's Tragedy of the Commons to demonize anything not completely privatized. While it was a total abuse of the essay, it certainly did the damage that Jay accurately represents here. So thanks Jay for this piece. I couldn't agree more with you.
Steve Clark // 23 Oct, 2009
I have always interpreted the Tragedy of the Commons as an environmental parable (yes, I see it as a parable) more than an economic one--though, of course it has significant economic implications related to the environment. To me, what the Tragedy of the Commons teaches us, and reminds us, is that we as humans are likely to overconsume and degrade and pollute those elements of our common environment like the air, the oceans, and shared local water bodies. We don't need to privatize to avoid this disregard and overuse, but we do need to agree by some compact that there is more value in protecting than in degrading. If we had such an agreement about the air, and the buildup on greenhouse gases, we would all be more inclined to drive more fuel efficient cars.
Larry Chamblin // 24 Oct, 2009
Steve- I'm not sure there's much distinction between partially privatized and as you describe it, "completely privatized". Isn't that like saying one is partially pregnant?
In any event, *all* actions are based upon an assumed right to that action. If rights (i.e. property) is not vested in any person or organization, it's like saying anyone can do anything they please, regardless of consequence. That's Hardin's 'commons'. (Makes sense, it's kinda a '60's concept, eh?)
Clearly, some delineation of organizational/management rights must be found. But don't mistake that delineation as constituting collective ownership, because that's an oxymoron in which only the strongman will have the final say. That is, until another strongman comes along and displaces the preceding strongman. And so on....
Rights (and a legal order, such that contracts are enforceable) are *essential* to managing common resources. The trick (as Elinor Ostrom's husband Vincent would point out) is in the rules that are adopted.
T Heller // 24 Oct, 2009
I like Hardin's title, and especially his use of the word "tragedy" in connection with the degradation of the [unmanaged] commons. It is, after all, brought about by ourselves when we place our individual gain above the long-term collective loss. I never felt that Hardin was saying the loss of the commons was inevitable; only that the dangers of overuse need to be recognized and dealt with. Is it not tragic when his warning is ignored?
P C Madden // 26 Oct, 2009
No matter what Hardin intended with the title and message of his "Tragedy of the Commons," the concept has been effectively seized by champions of privatization to condemn cooperative forms of ownership as a threat to the environment.
Jay Walljasper // 4 Dec, 2009
Jay:
I think you over-state (even over-dramatize) when you write:
"her work effectively debunks popular theories about the Tragedy of the Commons, which hold that private property is the only effective method to prevent finite resources from being ruined or depleted.
The Tragedy of the Commons refers to a scenario in which commonly held
land is inevitably degraded because everyone in a community is allowed
to graze livestock there. This parable was popularized by wildlife
biologist Garrett Hardin in the late 1960s..."
--
First, you insufficiently credit Hardin with drawing attention to the set of common-resource problems, which have ever since formed the essence of environmental economics. His incisive observation has not -and should not- be "debunked". His solution, however, has undergone modification thanks to closer examination by many, most notably including Ms. Ostrom.
Second, you seem to denigrate Hardin's seminal contribution when you characterize it as a "parable", even a "popularized" one. Perhaps you were writing on a deadline and didn't have adequate time to weigh your words.
Third, the solutions Ms. Ostrom advances do NOT undermine private property -- indeed, I would argue that she reinforces the role of private property, only extending it into realms not previously encompassed by the traditional (and narrow) notion of private property. For do not contracts established by collective action(s) constitute private property? (Cf. carbon credits, fishing rights, etc.)
My criticisms aside, I think your statement, "Ostrom’s work also challenges the current economic orthodoxy that there are few, if any, alternatives to privatization and markets in generating wealth and human well being" is much more accurate -- and indeed is the most fitting tribute to Lin Ostrom's career.
As I suspect Garrett Hardin would remind us, people in all communities should be constantly vigilant to the presence of unmanaged commons within our respective worlds. Because tragedies of the commons are lying all about us, waiting to be discovered and corrected.
T Heller // 15 Oct, 2009