Important Common Resources
The “Tragedy of the Commons” is a famous political parable that
illustrates why common resources get used more than is desirable
from the standpoint of society as a whole. Long ago in medieval times
raising sheep was one of the most important economic activities, with
families basing their livelihood on the wool that the sheep provide. In
these medieval towns, all the families’ sheep grazed on the same land,
The Town Common, which was shared by everyone and owned by no
one person. This worked out well as there was enough grass for
everyone. As the years passed, the population grew, as did the sheep.
Soon the grass became overgrazed and was eventually barren. With no
grass, there was no sheep and therefore the families lost their wool
and money. If all the families had of acted together, they could have
made sure that the sheep population was controlled, however no one
family had the incentive to reduce the amount of sheep themselves in
a common “why should I?” approach. Each family was stubborn,
ending in disaster. This tragedy is a result of an externality.
There are many other, more modern day examples of this. Let’s start
with clean air and water. Pollution is the negative externality here,
with the tragedy being the degradation of the environment. This must
be controlled by taxing polluting activities (e.g.) waste from large
multinational companies.
Congested roads are also common resources because each person
that drives is contributing to the road becoming more crowded- the
tragedy being a slow moving traffic jam. This is controlled by toll
bridges, tax on petrol and even, in Rome, with cars having different
registration plates allowing them to only drive on certain days.
Finally, ?sh and whales are common resources. Like the excessive
grazing in the sheep story, over?shing is a huge problem with the
tragedy being the destruction of a marine population. This problem is
hard to regulate due to the sheer mass of the ocean, along with the
fact that several countries own it, meaning cooperation is vital and
hard to achieve. However, several measures have been put in place
(e.g.) charge on ?shing licences and restrictions on ?shing seasons.