Tragedy of the Commons Essay

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Tragedy of the commons refers to a situation where each individual, when engaged in profit-maximizing behavior, causes overall damage to common property. The principle reflects two ideas. The first is the economic idea of profit maximization, wherein it is held that in general each individual will seek to maximize their own outcomes. The second idea is that in doing so individuals will generally exploit common property. Indeed, transactions between individuals are largely a zero sum game of swapping different types of benefits, but the only real growth comes from increased exploitation of common property.

There are a lot of examples of tragedy of the commons. A good one is the exploitation of fossil fuel resources. These are common to the people of the world, but each person seeks to maximize his or her outcomes, and this results in high levels of consumption. Fossil fuels make an obvious example because they are not renewable, so they only diminish as they are exploited. I have looked at water, however, and that is a different matter. There are examples in the U.S. -- I recently read about Lake Mead -- where this common property's usage is being maximized by all who have access to it. The result is that the overall maximization of the lake is at an unsustainable level.

At this point, nothing is being done. The status quo is exactly why the problem exists, and because each jurisdiction wants to see its own advantage maximized, there is little political will to sacrifice individual prosperity for the benefit of the commons. This is an illustration of the tragedy of commons -- it wouldn't be a tragedy if something was being done to address the problem.

Phase 4 Individual Project

The paper does not really explain the common pooling approach very well. Indeed, it makes a few points that seem to counter the underlying logic of any sort of collective action. First, the statement that record harvests indicate sustainable management makes no intuitive sense -- sustainability comes from exploiting less of the world's resources, not more. Indeed, it is clear that lobsters are not as abundant as they once were, which hardly makes the case for this being a sustainable fishery. Second, the author admits this Maine program is successful because there is a large resource pool of lobsters. Tragedy of the commons doesn't really occur until there are insufficient resources to ensure sustainable harvest. I understand that maybe they have done some things to manage their fishery, but I'm not seeing a genuinely enlightened approach to sustainable fishing -- given scarce resources what safeguards does the author describe that would prevent tragedy of the commons from occurring?

Anyway, I don't really understand all the convoluted "Zone E, Zone G" minutiae, which makes the argument hard to follow here. I assume it makes sense for fishermen who have some prior exposure to these systems.

Ostrom's eight design principles are at the heart of the article, and the author seeks to make the case that the Maine lobster fishery conforms to these principles. Not all of the principles are outlined. One that has been outlined is that collective action can only occur when boundaries are defined -- well this runs in contrary to collective cultures. Presumably the implication here -- as the author noted -- is that when people who are highly individualistic in nature attempt collectivism they need these boundaries. I doubt an African or Native American needs his own dedicated patch of water to make collectivism work. Another of Ostrom's eight design principles is that there should be formal cooperation at an interstate level. We'll presume "interstate" just reflects cooperation between two or more interest groups. In this situation, it might be the states. The author notes that the lobster industry does not conform to this principle, as lobstermen from different states may be subject to different rules.

The third principle calls for broad participation of stakeholders. This appears to be the case, although tragedy of the commons is set up because each zone's interest is dominant in that zone. Because fishermen from another zone cannot vote on another zone, this is arguably not even collective, and the commons are easy to exploit if each zone maximizes its take. The author specifically notes that each zone votes in its own best interest., a precursor for the tragedy of the commons, and that the natural check of external stakeholders is not invited to the vote.

The author does argue that the layers of management and local-level resource pooling represent collectivism, and that seems to be a reasonable claim. It doesn't have anything to do with sustainability, however. But having only really checked the box on one of Ostrom's collective action principles, the Maine lobster industry does not appear to be collective action at all. It is multiple individual profit-maximizing bodies, and the author notes instances where they work against each other and the necessity of a conflict-resolution regime. As someone from a much more collective culture, I would not call this collective at all, and the author has therefore failed to make the case.

This leaves much room to make this process better, though one would need to define "better." If "better" is genuinely sustainable, I think we have seen that legislation and governance from an overarching body is much more effective than trusting individual profit-maximizing bodies to manage a resource effectively. If "better" is something else, then a different approach can be taken. Maine lobster fishermen seem to have benefitted from having a few rules that discourage self-destruction of the resource, and the abundance of this resource has thus far prevented a full-blown tragedy of the commons, but there are fewer lobsters than their used to be and the author never really made the case that this industry is truly either sustainable or collective. Thus, if the idea is to make this industry either of these things, there's a lot of work to be done.

Phase 4, Discussion Board 2

Agency theory reflects the idea that managers of a company are agents of the shareholders. They must therefore act in a manner that represents the shareholders' best interests. Agency theory is most relevant when the interests of the managers and the interests of the shareholders are not aligned -- the managers should opt to maximize value for shareholders, not themselves.

Resource dependency theory and stewardship theory reflect that the firm is dependent on external factors, and for managers to increase shareholder wealth they should focus effort on reducing that dependence (Hillman, Withers & Collins, 2009). For action research, this is an interesting theory to keep in the back of your head, but it doesn't have the same relevance as agency theory and stakeholder, which very clearly frame strategy. Resource dependence theory speculates about optimal responses, but research has not shown these prescriptions to be the key to success.

Stakeholder theory evolved as a response to agency theory, noting that there are other stakeholders of an enterprise, not just shareholders. If the shareholders put up passive capital, other stakeholders might put up other assets that help the organization to run. The principle here is that managers might be agents of the shareholders, but they are agents of other stakeholders as well, and need to take into consideration the needs of these other stakeholders.

Agency theory makes things simple for managers, but it does not accurately reflect the interests of the organization. Stakeholder theory is much more comprehensive in this regard, even if it brings up more complex decisions that are more difficult to resolve.

Phase 4, Discussion Board 3

There are probably no areas of environmental policy that can be left to voluntary measures. In some instances, it has been demonstrated than an educated and enlightened society can be convinced through education and…[continue]

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