07 September 2009

tragedy of the commons

Photo Courtesy: www.fao.org

The tragedy of the commons is a phenomenon that was first written about by Garrett Hardin in 1968. In his article published in Science he describes a dilemma in which multiple individuals acting independently and solely and rationally consulting their own self-interest will ultimately destroy a shared limited resource even when it is clear that it is not in anyone's long term interest for this to happen.

Central to Hardin's article is an example, a hypothetical and simplified situation from medieval land tenure in Europe, of herders sharing a common parcel of land (the commons), on which they are each entitled to let their cows graze. In Hardin's example, it is in each herder's interest to put the next (and succeeding) cows he acquires onto the land, even if the carrying capacity of the commons is exceeded and it is damaged for all as a result. The herder receives all of the benefits from an additional cow, while the damage to the commons is shared by the entire group. If all herders make this individually rational economic decision, the commons will be destroyed to the detriment of all.

This concept that the 'commons' is available to everyone to use and abuse without regulation is the primary stumbling block towards a sustainable future. The abuse of the commons is being seen in many environmental scenarios like destruction of land resources, deforestation, air pollution, overfishing etc. Due to the lack of ownership, there is also a lack of conscience. Increase in population only increases the pressure on the commons.

I have previously argued that the definition of sustainability itself lends itself to an anti-growth model because it assumes that we are compromising the future generations' ability to enjoy the level of comfort that we do and because our current consumption patterns means that resources will run out. It does not address the issue of employing a new business model in order to overcome the tragedy of commons.

Businesses traditionally considered pollution and other abuse to the commons as an externality - a phenomenon that occurs during the normal course of doing business. Now however, there is a stark realisation that the environment can no longer be considered an externality. In fact any business model that still operates on this precept is ultimately an anti-growth model.

Business as usual needs a total reorganization in the way it operates. The age of big businesses and the off shoots of globalization like off-shore manufacturing is part of the redundant business model which still does not negate the tragedy of commons. It only makes the problem their problem but what it fails to recognize is that ultimately it is our problem.

A model of new-age business with sustainability at its core depends on social development and a bottom-up approach to knowledge transfer and horizontal management. This is done through the involvement of the community in community projects and allocation of the commons so that it is no under common jurisdiction but individual responsibility.

The backbone of every big business should be based on social development if it is to thrive. Social development is not just a localised 'small-time' tool. It can be as big or as small as one envisions. One of the biggest dairy companies in India, Amul uses this as a philosophy. Corporate social responsibility becomes an empty sentiment if it is not fully integrated into the daily workings of the business in question.

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