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October 03, 2006

Tragedy of the commons

The economic concept called the tragedy of the commons may sound eerie, but it is important, says Dr. Mike Walden, professor of agricultural and resource economics at N.C. State University.

"It is based on the old notion many, many decades ago where cities would set aside pasture land in the middle of the city -- called the commons -- where farmers could bring their cattle in and graze for free," Walden says. "And what cities quickly found is that those commons became overgrazed, because each farmer had an incentive for his cattle to use up the grass before someone else got it. So no farmer had an incentive to maintain that commons -- those pasture lands.

"And you can apply this to other areas where ownership is not specified. One of the big problems, for example, in the fishing industry today is overfishing. Catches are going down, and it is because fishermen know that they want to catch the fish before someone else does. No one cares about maintaining the long run capability or viability of those oceans.

"So this is a problem faced in some situations where you have to carefully define ownership in order to maintain that resource," Walden concludes.

Posted by deeshore at October 3, 2006 08:35 AM