The Tragedy of the Commons as an Economic Concept

"The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things". Garrett Hardin, 1968

The tragedy of the commons had been widely considered throughout our whole project as an economic situation.It is definitely a failure to maximize benefits. Its existence should be internalized both by institutions with their inability to coordinate markets and by individuals with their inability to overcome their selves and to become a responsible part of society. The tragedy of the commons would always be in favor of selfish individuals, whose genes, according to evolutionary psychology, would predominate. Fortunately, it is obviously not so, because altruistic preferences persist, too. Son, no matter how many selfish individuals there are, and no matter to what extent they are narcissistic, the commons still persist. But is there a way out of the tragedy? Is there a technical solution to the problem? Are the commons a source of unhappiness, as Hardin referred to them? Or is the unhappiness rather in the depletion of the commons towards which our society is moving slowly but steadily? Is there a way to avoid the end of the commons? Our own proposal for solution of the problem is to put an end of the commons as long as there is something to be ended? The “commons” will become the “privates”. The resources will not be lost; they would rather be re-allocated. If we wait for the world to learn from its mistakes, the commons may be ended (i.e. depleted) before the point of self-discipline comes.

This was confirmed by the conducted in our Game Theory class repeated experiments. The intelligent self-confident economics students behaved in a self-interested way in every round of the game. We believe that if individuals are mostly rational and profit-maximizing, their co-sharing of the commons is not a situation that has a technical solution. On the other hand, if they were entitled ownership rights over the transformed into privates commons, they would make the best out of these “privates”, again led by their natural narcissism. If individuals are narcissistic, we must include this as an indigenous variable into the economic model. As the term egocentrism applies, if the ego has has such abig economic value, the model would better acknowledge its influence and endogenize it instead of denying its importance. Thus, egocentric people will know how to make themselves better off, and eventually society will move to a new equilibrium. Of course, dreaming of such equilibrium is something we can only dream of because no economist has come yet with a realizable proposal for fair privatization of the commons.