12.5 Tragedy of the Commons

The problem of inequal distribution of common resources is not a new one, but ecologist Garret Hardin put the tag “Tragedy of the Commons” to the problem in a 1968 article in the magazine Science. Economists view this as a problem of property rights. No one individual has an incentive to protect resources that are shared or benefit the public good. Instead, individual users act according to self-interest and behave in ways that deplete resources through the collective actions of individuals.

Carribbean Conch Fishing

In the Caribbean, the queen conch is a large marine mollusk that lives in shallow waters of sea grass. These waters are so shallow, and so clear, that a single diver may harvest many conch in a single day. Not only is conch meat a local delicacy and an important part of the local diet, but artists use the large ornate shells and craftsmen transform them. Because almost anyone with a small boat, snorkel, and mask, can participate in the conch harvest, it is essentially a shared resource. At the same time, fishing for conch is competitive. Once a diver catches one conch another diver cannot catch it.

We call goods that are nonexcludable and rivalrous common resources. Because the waters of the Caribbean are open to all conch fishermen, and because any conch that you catch is conch that I cannot catch, fishermen tend to overharvest common resources like the conch.

To address the issue of overharvesting conch and other marine fisheries, economists typically advocate simple devices like fishing licenses, harvest limits, and shorter fishing seasons. When the population of a species drops to critically low numbers, governments have even banned the harvest until biologists determine that the population has returned to sustainable levels. In fact, such is the case with the conch, the harvesting of which the government has effectively banned in the United States since 1986.

Toilet Paper During the Pandemic

How does this address the problem of income inequality in the United States? Tax laws and economic policies have increasingly favored those who control production of resources, goods, and services. These are not the farmers, waitstaff, clerks; rather, those who trade goods to be sold, decide on the wage paid by a company or organization, or choose whether to provide benefits to employees. These are also the people who set corporate rules regarding the formation of unions, and ultimately, by controlling the dynamics of supply and demand, set the prices of goods purchased with those wages.

The toilet paper shortage at the beginning of the COVID-19 pandemic is an example. In grocers and department stores around the country, panic buying created a dramatic shortage of toilet paper. In response, many of these sellers put limits on the total number purchased per household. Was this the result of manufacturing or something more?

Individuals who bought more than they needed for immediate use were buying with their own self-interests in mind. Per the Tragedy of the Commons, they did so with little concern for the impacts on others who may also need these items. As a collective action problem, those who can be categorized as panic buyers effectively left other members of the public without. Granted, toilet paper may be one thing, but this eventually happened with food items, personal care, and infant formula.