The classic definition of the tragedy of the commons involves the mismanagement of a shared resource. Individuals are said to act in pure self-interest by grabbing as much of the shared resource as they can, in order to privately profit at the expense of the collective wealth. The tragedy is that this resource, if properly managed and not ravaged by greed, could have been sustained indefinitely, profiting more individuals in the long run, albeit at a more modest degree by each.
The concept of the tragedy of the commons was popularized by Garrett Hardin, a wildlife biologist, in the 1960s and was embraced by privatization advocates. The story, which has become a cliché, is that back in the day, villagers recognized the utility of allowing more of their livestock to graze the land held in common by all of the villagers, while privately enjoying the benefit of this grazing in the eventual sale or use of the wool, milk, meat, manure, and offspring provided. The antidote to the eventual overuse of the commons was said to be enclosure and creation of private property, but this hypothesis is deeply flawed. Many commons have been managed for extended periods of time through cooperation between those who share in the benefits and costs, whereas the eventual enclosure of the grazing fields and subsequent expulsion of those who lived there was committed by aristocrats who realized they could increase their profits by getting rid of those inconvenient peasants. However, this specific example aside, the concept of privatizing profits while socializing costs stands as a main cause of the erosion of wellbeing of any interdependent society.
There are commons everywhere. When you see vehicles and factories spewing pollutants into the atmosphere that we all breathe, that’s the tragedy of the commons right there. The polluters are enjoying the benefit of production or transportation while externalizing the cost on to all of us in the form of health problems and injury to the environment. However, I’d like to draw your attention to a commons that is not usually perceived as such: the middle class.
People with needs and wants, as well as money to spend to satisfy these, are a resource for businesses and governments. These are the people who become customers, trading some of their money for the goods and services for sale in the marketplace, and as long as this group remains prosperous, the businesses that depend upon customers to buy what they’re selling will remain prosperous. Prosperous citizens (and therefore also businesses) become a renewable tax base for governments who need revenue to provide for the common defense and general welfare of all. Assuming that the money keeps circulating, much as carbon and water do in a healthy ecosystem, this cycle can keep going indefinitely. To do so, however, it must be managed properly.
Instead, what we have is individual actors who became too greedy, siphoning off the wealth of the commons for their own short-term benefit. The post-WWII years were a boom time, flush with prosperity from wartime savings and newly released pent-up demand for consumer goods, but it wouldn’t last. High marginal tax rates which kept the money from piling up in the pockets of our de facto aristocrats were reduced by President Kennedy to some immediate effect (perhaps from encouraging increased investment), but further cuts only caused the slowing of the “cycle” without producing the expected benefits. The middle, working, and poorer classes spend more of their income on immediate human needs, whereas even wealthy people can only buy so many pairs of pants and jars of peanut butter, so the everyday businesses that form much of our local economy suffer when the money begins to pool in one spot without being dispersed, by choice or through taxation.
In addition, other businesses took their profits from the flesh of the middle class with equal disregard to maintaining a healthy commons that could support many businesses. Predatory lenders charge exorbitant interest rates, especially to people who cannot afford loans on more favorable terms, or foreclose on real property when the borrowers default, eroding a family’s economic viability. Companies seeking to profit through wage arbitrage rather than by producing better products outsourced jobs overseas or took advantage of captive prison labor, undermining the ability of the average American worker to earn a living. Similarly, robots and automation are displacing workers from well-paid manufacturing jobs and will eventually come for even the creative among us. The jobs being created to replace these are generally low-wage fast food or retail positions with irregular schedules or part time hours designed to save the companies from having to provide costly benefits. The sharing or “gig” economy breaks the relationship between employers and workers almost entirely, putting the entire burden of risk on the backs of an increasingly desperate, overworked underclass of freelancers who must continually lower their own pay to compete for odd jobs, since if they don’t, the person behind them in line will. All of these facilitate a “trickle up” of wealth away from the lower classes.
This death-by-a-thousand cuts isn’t completely measurable in money, either. Much like the original “tragedy of the commons,” we’re eroding our environmental base. Industrial agriculture which consolidated family farms and sent small farmers packing also erodes soil and squanders long-term fertility while contributing to atmospheric carbon. Increased environmental and health problems caused by externalizing costs onto the public exacerbates inequality while providing fewer ways to solve it. The list could go on and on.
As a result, we’ve severely wounded the goose that laid the golden eggs. Without customers, businesses shrivel, and even the wealthy can no longer find as many profitable investments for their accumulated fortunes. Capital remains locked in bank vaults (foreign and domestic) or, perhaps worse, chases speculative bubbles in a panicked search for returns. When the bubbles inevitably burst and paper wealth vanishes, a chain reaction of bankruptcies and collapses results in real people being laid off as companies downstream seek to reduce liabilities in an economy with fewer customers. Premature mortality increases through high suicide rates, alcoholism, and drug addiction. Demagogues are elected to high office by making promises of greatness that they are unlikely to be willing or able to keep. Economic mobility decreases; children born in 1940 had a greater than 90% chance to out-earn their parents at the same age, while a child born in 1980 has only a 50/50 shot at doing so.
This is our modern tragedy of the commons. A once-thriving middle class has been driven into the ground by rent-taking, companies maximizing short-term profits to the detriment of long-term economic sustainability, a broken social contract that shifts risk onto those least able to bear it, and by increasingly shouldering the costs of doing business without proportionately sharing in the benefits. An economy optimized for getting rich quickly at the cost of the common prosperity has at last ravaged the resources it depended upon for its survival.
Join the conversation!