Housefull Economics

Winter Didn’t Have to Come

Our weekly explainer on economics using lessons from popular culture. In Installment 22, Jon Snow explains the Tragedy of the Commons.

“If we don’t win this war, then that is the faith of every person in the world,” warns Jon Snow , as he points towards a Wight, a zombie-like minion created by White-Walkers, the sword-freezing creatures who intend to rip apart all nations and noble houses in HBO’s killing orgy Game of Thrones (GoT).

Now, you might think that all the noble houses would put aside their differences to fight their common enemy in order to save themselves from the biggest threat to human existence in the GoT universe, but guess what? They don’t. They’re busy fighting over petty disagreements and annexing each other’s territory.

Economic theory would call this The Tragedy of the Commons. This social dilemma occurs when individuals, acting independently and rationally, deplete or damage a shared resource, even when doing so is not in their best interests in the long run.

The White Walkers are superior to any single army in the kingdom. If one of the houses sends its army to fight them, it would risk losing its entire fleet of soldiers, thus eventually losing its territory as well to another opportunistic noble house as they wouldn’t be left with any soldiers to defend their land. No individual house thus has an incentive to take on the White Walkers. Thus, the very existence of humanity, which can be seen as a shared resource here, can only be saved if all the noble houses join hands and take part in the battle on the same side.

When one of the houses tried to call for a truce, the head of another house cynically exclaimed, “Pull back my armies and stand down while you go on your monster-hunt? Or while you solidify and expand your position? Hard to know which it is with my armies pulled back until you return and march on my capital with four times the men!”

Garrett Hardin, an evolutionary biologist by education, authored a paper titled ‘The Tragedy of the Commons’ in the journal, Science, in 1968. Hardin uses an example of an open access pasture to demonstrate the concept. Every cattle farmer has an incentive to bring more and more cattle to graze this pasture. They get the direct benefit of grazing their cattle there, but only bear a fraction of the cost of the over-explored pasture, so they continue to add cows till the pastureland is overgrazed and destroyed. Even if they recognise that the pasture is being over-exploited, they have no incentive to stop using it because someone else will bring their cow and exploit it if they don’t.

Hardin’s primary argument was that if humans were put in the same situation as in the example with pasture grazing, every person would act in his own best interest and consume as much of the scarce resource as possible, depleting the resource and eventually making it hard to find.

Hardin reasoned against relying on conscience and moral suasion as a means of preventing the tragedy of the commons. In case an altruistic user backs off from consuming a common resource, there will be enough self-serving individuals who jump in and take his place.

The most well documented example of this phenomena is the depletion of blue fin tuna from the high seas due to overfishing. The species has had the misfortune for being fancied for its tender red meat by Japanese sushi enthusiasts. Bluefin tuna have already been overfished to extinction in the Black Sea and Caspian Sea, and the Atlantic sea is soon to follow.

Hardin also had some profound insights about pollution, a point of view that policy makers must consider in order to understand the problem of farmers burning paddy straw that is currently causing Delhi to choke.

Here it is not a question of taking something out of the commons, but of putting something in–sewage, or chemical, radioactive, and heat wastes into water; noxious and dangerous fumes into the air, and distracting and unpleasant advertising signs into the line of sight. The calculations of utility are much the same as before. The rational man finds that his share of the cost of the wastes he discharges into the commons is less than the cost of purifying his wastes before releasing them. Since this is true for everyone, we are locked into a system of “fouling our own nest,” so long as we behave only as independent, rational, free-enterprisers.

It has been widely recognized that secure and well-defined property rights can mitigate the Tragedy of the Commons. Every owner has adequate incentive to conserve his asset, protect the underlying resource and preventing its overuse. Not only for himself but for others who may value the resource, in case he has to sell off the land in the free market in exchange for money. Hardin concludes that the institution of property rights “deters us from exhausting the positive resources of the earth.” (To know more about the Right to Property, and its troubled history in India, do read Shruti Rajagopalan’s series of essays here.)

Nobel Laureate Elinor Ostrom, who was one the biggest critic’s of Hardin’s work, argued that contrary to established thinking, communities are capable of self-organising in such a way that those who free ride on the common resource are punished. She examined multiple  real-world situations, and discovered that communal ownership often eliminates the so called ‘tragedy’. She strictly argues against a one-size-fits-all formula for efficient common pool resource management, instead suggesting that solutions must be contextually established within local communities. Jon Snow too, perhaps after reading Ostrom’s work, gathers the all the noble houses in the kingdom and tries to convince them to collectively act against the White Walkers.

“The same thing is coming for all of us…There is only one war that matters, the great war and it is here,” cautions Snow, in a language economists will no doubt understand.

 

Ostrom’s work explicitly aided in solving the common-resource problem of elephants in Namibia. Local residents, as a means of solving this problem, got a share of the financial benefits from the tourism industry and trophy hunting. When the locals started benefiting from having a resident herd of elephants, they were less likely to poach or let outsiders poach in their territory.

Way before Hardin and Ostrom, a little known Greek simpleton named Aristotle told us why it was a hard task to unite the houses against the White Walkers:

What is common to the greatest number gets the least amount of care. Men pay most attention to what is their own; they care less for what is common; or at any rate they care for it only to the extent to which each is individually concerned. Even when there is no other cause for inattention, men are more prone to neglect their duty when they think that another is attending to it.

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About the author

Archit Puri

Archit Puri is a public policy researcher, freelance writer, former social entrepreneur, psychology enthusiast and tired of labels. He slogs as a Senior Associate at the Centre for Civil Society to fund his daily bread. He tweets @bantofu