Privatize, government or common property?

Farmers who share their machines with neighbors know better than anyone that you have to make good agreements about this. Owning a potato harvester yourself or calling the contractor is sometimes easier than joint ownership. That stands or falls with good agreements.

How do you plan together which plots are cleared first, who does the maintenance, who has space in the shed? Because people simply prefer pleasures than burdens. Or as a Spanish proverb says: the common cow is better milked than fed.

Conserve resource
The same is true on a large scale when it comes to shared resources. Such as communal pastures or fish stocks. Or something as small as the communal fridge in the office. If everyone can make unlimited use of it, no one has enough interest in preserving the resource and things get messy.

Often it is the same person who is good enough to clean up the refrigerator and throw away moldy products. The most commonly used example for this 'tragedy of the commons' to make clear comes from fishing. It is in every angler's interest to increase the engine power a little more to catch a little more fish. But at a certain point the fish can no longer find each other to reproduce or grow and everyone is the victim. If only we had paid more attention.

Classic in environmental economics
The problem of overgrazing was already identified in the 19th century, but in 1968 it was the ecologist Garett Hardin who put it on the agenda through an article in Science. It became a classic in environmental economics. The solutions were obvious: either the government should intervene, for example with quotas, or you should privatize the business. The former has happened to fish (and numerous environmental problems), the latter over the centuries to many communal grazing grounds. Although according to some it was not so much to solve the tragedy of the commons, but an appropriation by the elite.

Anyone who reads the article now will understand a bit why Hardin has also been heavily criticized by economists. The article is very much about overpopulation and the fact that technology is not going to save the world. Freedom must be curbed. Hardin, like Mao, believes that the right to procreate should be limited. Also in a recent paper on blockchain chickens in China, Californian Xiaowei Wang goes all out on Hardin, slashing him as a racist and more.

tragedy of the commons
Yet the statement that we are dealing here with a 'political conviction, packaged as science' goes too far for me. The tragedy of the commons provides a clear analytical framework for certain problems. As for the climate problem, where you also regularly hear that it does not matter to the world what the Netherlands does as an individual country. Or indeed for those fish stocks.

And then you can discuss solutions: privatization or government intervention. In which the setting of quotas is in fact also a form of division and privatization. That is the path chosen for the climate problem and for fish. And years after Hardin, Elinor Ostrom would explain that the problem was not too bad, because people are able to find all kinds of forms of cooperation on their own. Such as cooperatives and making good agreements. Farmers with successful partnerships and joint exploitation of machines or even land, of course, already knew this.

Krijn J. Poppe

Krijn Poppe worked for almost 40 years as an economist at LEI and Wageningen UR and now holds a number of advisory and management positions. For Boerenbusiness he dives into his bookcase and discusses current developments on the basis of studies that have become classic.

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