tragedy of the commons

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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.

sustainability - the flip side

The juxtaposition of sustainable development with ecology and development is a valid comparison and one that is open to debate. Development at an unprecedented rate cannot continue and the lack of proper ecosystem management is making it extremely difficult to support current rates of growth. Already the adverse effect of environmental abuse is being felt. There is a direct impact on world economy due to climate change – change in weather patterns, agricultural losses, increase in floods, tornadoes, droughts. All of these have impacts on world economy.

The definition of sustainability itself has large black-holes that need explanation. As a relatively new business model, it challenges the traditional notions of growth. Whilst a growing economy simply expands, a developing economy improves. Within the frame of the definition of sustainability there is no indication of how we can support current rates of growth "without compromising on the ability of future generations to support themselves". There is no basis on which to perform a projection analysis to figure out what resource use the future generation requires because we barely know what is acceptable today. However since there is a deceptive simplicity around the concept of sustainability, it is applied to every new business model.

The idea of sustainable development is based on two assumptions. The first is that we are running out of resources and the second is that economic growth is the cause of this depletion. However, resources are becoming less, not more, scarce. Agricultural yields for all the major crops like rice, corn, and wheat have been on the increase. Increased exploration of oil, coal and natural has been revealing that known reserves are expanding. This same phenomenon has been seen with metals like aluminum, zinc, iron, and copper where reserves have increased. Improved technology has ensured that more-conservative production techniques are encouraged and this in turn has ensured the exploration and new discoveries of underground reserves. Life expectancy, housing, nutrition and education levels are improving world over. In short, the prosperity we enjoy today is leaving future generations better off, not worse off.

If the definition of sustainable development incorporates the maximization of human welfare, then this is only possible if the legal system ensures property rights in order to ensure market operability. The definition of sustainability should incorporate the idea of right to development. The right to development and by proxy the right to environment can only be guaranteed when the tragedy of the commons is abolished. Since growth and increasing wealth leads to improved environmental quality by raising demands for it, economic growth cannot be the antithesis of sustainable development but the essence of it.

Political and economic systems based on property rights is the only base to sustainable development. Government regulation to stop growth is the antithesis of any development and will see a decline in environmental quality. Scarcity of resources is the excuse given for lack of institutions that ensure human freedom.

The biggest problem is that there is no common consensus that world governments and organizations can reach in order to resolve these issues. Additionally, any measure we have in place in terms of treaties etc are not mandatory not legally-binding. Unless there is some measure that legally enforces sustainable development, the change is going to be slow to come. At this point, 'slow' cannot be afforded.