The Tragedy of the Commons – A Refuge for Scoundrels

The brilliant economist and “great man” Milton Friedman observed:

“there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system.”

In short, if it is our goal to improve the lives of our fellow humans, capitalism and free markets are the solution.

Libertarians and many conservatives hold this conclusion to be so amply demonstrated by both history and theory as to be irrefutable. Statists, on the other hand, will demonize capitalism because it isn’t perfect and hasn’t produced utopian outcomes. In doing so, they are trying to rebut a point that Dr. Friedman did not make. Neither he nor most free-marketers argue that capitalism is the perfect solution, but merely that it is the best solution. Nevertheless, anti-capitalists, deliberately or unconsciously, argue from a criterion of perfection and apply a presumption that supposed “failures” of capitalism can be fixed by proper application of government force.

This is very commonly found in discussions about the “tragedy of the commons.” The tragedy of the commons is the observation that human nature tends to drive individuals to maximize their use of shared assets and resources and minimize their effort in preserving those assets and resources. Ten people owning a house together are less likely to maintain it properly than one person owning that house alone. In the macro scale, the tragedy of the commons offers an explanation for why people tend to pollute, tend to use up resources with less of an eye to the future, to over-farm, to over-develop, and to do things that are arguably not in the best interest of humanity as a whole.

It is a real phenomenon, rooted in basic human behavior, which is itself the product of hundreds of millennia of human evolution. It is also an all-too-frequently-cited justification for statist meddling in the free market.

I’ve seen many conversations that read “free markets produce the best outcomes” and rebutted with “yes, but tragedy of the commons.” In other words, because the best outcomes aren’t perfect outcomes, the “best” part is ignored in favor of “we can do better.” History, old and recent, doesn’t support that assertion, of course, which is what Dr. Friedman observed. Tragedy of the commons is often invoked even by many pro-capitalism types, who perhaps want to appear more moderate and “reasonable” than free-market absolutists. “Yes, but…” often presents as erudite and deep-thinking, especially when trying to sell ideas to people who may be skittish about going all-in on trusting market forces instead of “the best and brightest” to produce the best outcomes, but it’s not supported in this case by history and empiricism.

“Yes, but…” plays on basic human nature as well, in that people tend to prefer action to inaction, to fear loss of control, and to prefer strong authority figures and leadership over trusting the “invisible hand” and the spontaneous order created by free enterprise. This is where the cynically power-hungry and self-interested seize their opportunities. They attack the “best outcome” by relabeling it as “not perfect.” They invoke the tragedy of the commons as proof that the best outcome is not perfect, even though no one argued that it is. They “Yes, but…” in response to an assertion nobody made. They leverage human nature to convince people that the human nature at the root of capitalism and free enterprise (millions acting in their individual self interests) that produces the “best outcome” is faulty, a Bad Thing, and can be improved upon by (who else) them. In other words, they make the perfect the enemy of the good in order to advance and enrich themselves and their own. Everyone else, of course, suffers as a result.

As for the tragedy of the commons itself? It is a mistake to consider it a failure associated with capitalism. It is, rather, a by-product of human nature, and thus exists no matter what socioeconomic system is implemented. Socialist and communist states have done monstrous harm to the environment, with Russia’s Aral Sea as but one of many examples. Criticizing capitalism by citing the tragedy of the commons mislays blame, and in doing so mis-prescribes potential solutions. If we believe that the tragedy of the commons is a result of free markets, we’re more inclined to seek statist solutions. If, rather, we recognize that it is basic human behavior that will appear in some form in all societal systems, we can look to mechanisms that also rely on basic human behavior as counterbalances. Thus, libertarians believe that the tragedy of the commons is best ameliorated by robust property rights. This approach leverages human nature rather than working against it. The former is rational, the latter is doomed to failure.

• About the Author

About Peter Venetoklis

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.

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