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Regulations are great for handling tragedy of the commons scenarios. Eg, it's in a single business's best interest to dump chemicals in our shared water supply,

Regulations are great for handling tragedy of the commons scenarios. Eg, it's in a single business's best interest to dump chemicals in our shared water supply, but it is in the common people's interest to have clean water. So we regulate polluting the water. However, most regulations I encounter are more of the Baptists and Bootleggers variety. They both want highly regulated liquor for totally different reasons. Just like many large businesses are fine with extra regulations that well intentioned Do-Gooders suggest because the big businesses know it will block small innovative competitors from entering their market. It's so frustrating to see the anti-Corporate crowd cheer for more regulations. They're just cementing their place in society.

x1798DE 10y ago
> Regulations are great for handling tragedy of the commons scenarios. I have never seen any actual evidence for this. There is strong reasoning to say markets are bad at handing tragedies of the commons, but it does not follow from that that government is good at it.
- crazy1van 10y ago
  I think there's a difference between regulating something and using government over markets to solve the problem. For example, if the goal is a cleaner river, the inefficient way of solving the problem would be mandating a certain cleaning technology or giving a tax break to companies that install specific purification systems. That leads to a mindset of box checking compliance and the most politically well-connected companies winning out. The better way is to impose a fine or maximum on the externality -- water pollution in this example -- and let the market work. Now the polluting company has an incentive to find the best anti-pollution techniques at the lowest cost and other companies can compete by developing different anti-pollution methods.
- enraged_camel 10y ago
  Markets may be good at preventing tragedies of the commons, but they may also fail to do so. Consider the case of a lake fished by several fishing boats. Each fishing boat consumes a percentage of their daily catch and sells the rest for profit. The nature of the lake makes it a zero-sum resource: if one fishing boat catches more fish, it means less fish for the others. The problem: every fishing boat has a short-term incentive to overfish, since more fish lead to more profits. This incentivizes every fishing boat to catch as much fish as possible, until there's no more fish. That's the tragedy of the commons, and there's nothing the market can do to fix this. By the way, I didn't make up this scenario. There's a ton of examples of this exact same thing happening all over the world, not just with fisheries but with any kind of shared resource ("the commons"). You can read more here: http://www.dummies.com/how-to/content/ten-reallife-examples-of-the-tragedy-of-the-common.html http://www.dummies.com/how-to/content/ten-reallife-examples-...
  - x1798DE 10y ago
    I think you missed my point. Your example and others are a clear demonstration of how externalities cause individual incentives to lead to a sub-optimal outcome - that is not in dispute. What I was saying is that just because markets are bad at solving a problem does not mean that government is good at solving that problem. It doesn't even mean that government isn't worse at solving it.
- etherael 10y ago
  There's a good argument that the existence of the state itself exerts a specific aggravated case of the tragedy of commons on the entire society over which it projects coercive power. https://www.libertariannews.org/2012/07/15/the-state-is-a-tragedy-of-the-commons-3/ https://www.libertariannews.org/2012/07/15/the-state-is-a-tr... In light of this it's pretty amusing that it keeps being discussed as a reason states are great/acceptable/necessary/tolerable. I guess all propaganda is funny if you don't take it for granted.

x1798DE 10y ago

> Regulations are great for handling tragedy of the commons scenarios. I have never seen any actual evidence for this. There is strong reasoning to say markets are bad at handing tragedies of the commons, but it does not follow from that that government is good at it.

crazy1van 10y ago
I think there's a difference between regulating something and using government over markets to solve the problem. For example, if the goal is a cleaner river, the inefficient way of solving the problem would be mandating a certain cleaning technology or giving a tax break to companies that install specific purification systems. That leads to a mindset of box checking compliance and the most politically well-connected companies winning out. The better way is to impose a fine or maximum on the externality -- water pollution in this example -- and let the market work. Now the polluting company has an incentive to find the best anti-pollution techniques at the lowest cost and other companies can compete by developing different anti-pollution methods.
enraged_camel 10y ago
Markets may be good at preventing tragedies of the commons, but they may also fail to do so. Consider the case of a lake fished by several fishing boats. Each fishing boat consumes a percentage of their daily catch and sells the rest for profit. The nature of the lake makes it a zero-sum resource: if one fishing boat catches more fish, it means less fish for the others. The problem: every fishing boat has a short-term incentive to overfish, since more fish lead to more profits. This incentivizes every fishing boat to catch as much fish as possible, until there's no more fish. That's the tragedy of the commons, and there's nothing the market can do to fix this. By the way, I didn't make up this scenario. There's a ton of examples of this exact same thing happening all over the world, not just with fisheries but with any kind of shared resource ("the commons"). You can read more here: http://www.dummies.com/how-to/content/ten-reallife-examples-of-the-tragedy-of-the-common.html http://www.dummies.com/how-to/content/ten-reallife-examples-...
- x1798DE 10y ago
  I think you missed my point. Your example and others are a clear demonstration of how externalities cause individual incentives to lead to a sub-optimal outcome - that is not in dispute. What I was saying is that just because markets are bad at solving a problem does not mean that government is good at solving that problem. It doesn't even mean that government isn't worse at solving it.
etherael 10y ago
There's a good argument that the existence of the state itself exerts a specific aggravated case of the tragedy of commons on the entire society over which it projects coercive power. https://www.libertariannews.org/2012/07/15/the-state-is-a-tragedy-of-the-commons-3/ https://www.libertariannews.org/2012/07/15/the-state-is-a-tr... In light of this it's pretty amusing that it keeps being discussed as a reason states are great/acceptable/necessary/tolerable. I guess all propaganda is funny if you don't take it for granted.