Reconciling self interest and the public good
The conflict between individual benefit and community gain;
The inherent problems of penalty and regulations based strategies;
Introducing the third way – Rewards for cooperation and mutual benefit.
In a world populated by more than six and a half billion people and with finite resources, the provision of public goods seems to be on a permanent collision course with the pursuit of individual interests.
It’s a conflict that has been pondered by philosophers since humans first began living in groups, but increasing population pressure and a new sense of environmental fragility seem to be exacerbating the issue in the twenty first century. Dubbed “The tragedy of the commons” by Garrett Hardin, the conflict occurs in relation to a shared, finite resource and problem that arises when an individual is presented with a choice between personal gain or one that benefits all. According to popular thought, the course of action resulting in personal gain will win out almost every time.
The classic parable used by Hardin, and before him, by nineteenth century writer William Forster Lloyd, describes the problem by considering an English village common as the finite resource. Used by herders as pasture for their flock, the common has a fixed capacity to support x number of animals beyond which overgrazing occurs and the pasture will become degraded and unable to support the flock. If individual herders wish to maximise their personal benefit from the common they will need to add to their flock before the other herders take up the commons’ spare carrying capacity. However if each herder follows this path of self interest, too many animals will be added to the commons resulting in overgrazing, ruining the opportunity for all.
Hardin concludes, “Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own interest in a society that believes in the freedom of the commons.”
To bring the parable into modern terminology, simply substitute the phrase “public good” for “the commons”. Public Goods are items or services that share two main characteristics: non-excludability, meaning that if the good is available to one, it is equally available to all; and non-rivalry, such that consumption by one entity should not reduce the capacity for another to consume it or benefit from it. A good example is the air we breathe. It remains freely available to all and regardless of how much air one person consumes it in no way impinges on the availability of air for others. Other often-quoted examples include the defence of a nation, traffic lights and street lighting, and the content of copyright. Global Public Goods, as the phrase suggest are Public Goods that are not confined by national boundaries, such as peace and health.
The question of the Tragedy of the Commons remains as relevant today as it was in the 1800s and it has become a matter of particular concern to governments around the world. It poses a problem that stymies the provision of any public good. Consider these modern day examples.
Carbon emissions are causing major environmental problems. Even with full knowledge of the issue businesses are increasing their use of fossil fuels and many urban dwellers persist in purchasing large, fuel-hungry vehicles rather than opting for public transport. The finite public good– our quality of atmosphere – is degraded due to individual and business desire for short term personal advantage.
Water provides another example. Over the past decade much of Australia has experienced severe drought resulting in the introduction of water restrictions in every capital city. Yet throughout this period total water use continued to exceed sustainable levels. Other examples can be seen in the depletion of ocean fish stocks through overfishing; and forestry, land clearing and agricultural practices that result in erosion and soil salinity.
These resources are all freely available yet finite in quantity. Plus they are all public goods that fall within the scope of government management and administration. To date this has largely occurred in one of two ways:
- Regulating the use of the resource in question; and
- Creating and allocating “rights” to the resource.
One of the most common economic means of regulating a public good is through the imposition of taxes or levies. While the income from such taxes is usually considered part of the government’s consolidated revenue there are examples of the money being used to help rectify the negative attributes – or negative externalities – of an activity. To alleviate the problems of air pollution a government could impose a tax on those who create and contribute to the pollution problem. . Regardless of what the regulations are or how they are imposed, this approach is ultimately one of coercion.
The second approach, dividing up the commons into property rights, can be viewed as the “selfish” alternative. It attempts to preserve the integrity of the commons by restricting access to the resource so that it will not be entirely depleted. In addition it offers a limited group of individuals the opportunity for personal gain if they manage the resource correctly. The method is frequently used in relation to fishing – where limits are placed on the quantities or types of fish allowed to be caught; and in land clearing, where quotas are set specifying how much land may be cleared annually. It is also being adapted to non-traditional solutions through activities such as emissions trading.
Arguments for either approach paint a bleak picture. A major problem with systems that create rights is the difficulty of defining those rights, especially given by definition, rights to a public good are rights to something that is already freely available. The difficulty is compounded by the impossibility of the task. Because rights trading depends to a large extent on the accuracy of the measurement then its effectiveness will depend on how well it is done. In the case of a fishing trawler, how accurate is the tally of fish really going to be? Once the net has been cast is it possible to limit the catch to the exact quantity and type of species allotted to the trawler?
Moreover, an appeal to selfish interests works only if enough people share the same interest. In other words expecting people to cooperate based on financial gain works only if everyone is motivated by financial gain. It has been debated that in modern culture people are largely no longer motivated by shared interests, but instead choose actions based on values. Asking people to adapt or change their behaviour to accommodate potentially diametrically opposed values is a request that goes against one’s culture and it rarely works.
Coercion as a force for remedying the tragedy of the commons is equally limited in its effectiveness. Coercion requires the cooperation of the public, as few modern societies are able to enforce regulations in the face of sustained rebellion. And to gain the cooperation of the public requires general acceptance of the basic values behind the regulation, or a common values system. In today’s pluralistic and fragmented societies, such a values system is increasingly unlikely to be found.
As long as we remain locked in to these two approaches – regulation or rights – we will continue to grapple with public goods as neither way can be successful in the long term. The result is the decay of the common good and it is the natural outcome of a competitive mindset.
This book describes a third way that any organisation – federal, state or local government, community association or charity – can address the problem of the provision and protection of public goods. Adopting the principles of humanism, it resolves the “Tragedy of the Commons”, achieving sustainability by making cooperation in the best interests of all. Above all, it resolves the issue both equitably and democratically.