Tragedy of the commons
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The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will lower the yield a shared limited resource, even to the point of ultimately depleting it, even when it is clear that it is not in everyone's short or long term interest for this to happen. This dilemma was first described in an influential article titled "The Tragedy of the Commons," written by Garrett Hardin and first published in the journal Science in 1968.
In 1940, Ludwig von Mises wrote concerning the problem:
If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns β lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil β do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds.
- Tragedy of the commons at Wikipedia
- Tragedy of the Commons by Garrett Hardin at The Concise Encyclopedia of Economics
- The Savings & Loans Mess: Repeating the Tragedy of the Commons (pdf) by Garett J. hardin and Edmond G Miranne, Jr., 1997
- The EMU as a Self-Destroying System by Philipp Bagus, June 2011, on the tragedy of the commons in banking