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Does market economics work if there's no way to prevent the tragedy of the commons?
by r00fus 7y ago
Does market economics work if there's no way to prevent the tragedy of the commons?
- not_a_cop75 7y agoThis is the most important question of our era.
- ip26 7y agoThat's a confusing question. The tragedy of the commons happens specifically when a resource is under- or un-priced.
- not_a_cop75 7y agoIt's not a confusing question. The tragedy of the commons happens when a company or person abuses a resource that is provided for the good of all. We can look at any company and realize that compared to an average individual the pollution and resource consumption is crazy. The problem with industry is that everything is value added but nobody looks at externalities sufficiently or value subtracted.
- jbay808 7y agoIf a free market is left alone to set prices, do any resources end up under-priced?
- ip26 7y agoNo- but that presupposes the existence of a well functioning free market, which everyone agrees we do not have with water.
- aeorgnoieang 7y agoThe key is to 'sell' or 'gift' the property rights to the resources that were previously part of the commons (and to a party that can economically protect their new asset). I'm hoping one day something like that will happen with fisheries, e.g. someone will own fisheries or maybe even schools of fish. Anything less seems doomed to tragedy. Note that government management of a previously 'commons' resource is, in theory, the same basic arrangement. In practice tho, the very different incentives shaping government organizations doesn't seem to as reliably protect resources as for private entities. ('Markets fail'. Governments fail too. What's the expected difference in the rate of failure of the two?)