Living Within Limits - Intro (Tragedy of the Commons)

Author: Garrett Hardin

"I teach only two things: the cause of human sorrow and the way to become free of it" -The Buddha

If you are like me, you do not know who Garrett Hardin is.  However, like me, you may have heard of his most famous work: Tragedy of the Commons (1968)

For those unfamiliar with the reference, this was an ecology article, the heart of which can be summed up by a parable.  In the story, there was a piece of pasture land shared among many herdsman, but owned by none.  Each herdsman is free to use as much of the pasture to raise as many animals as his heart so desired.  Hardin then described the 'tragedy' to follow: 

It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy. 

As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, "What is the utility to me of adding one more animal to my herd?" This utility has one negative and one positive component.

• Negative: the pasture is slightly degraded by each additional animal. - accrued evenly to all herdsman (importantly, the man in question would only accrue a small fraction of actual costs)
• Positive: the herder receives all of the proceeds from each additional animal

[T]he rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another . . . . But this is the conclusion reached by each and every rational herdsman sharing a commons. 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.

This conclusion has been played out not only in agriculture, but some non-environmental areas of study as well.  Consider the following example.

FDIC Insurance was created as a result of bank-runs during the Depression.  The U.S. government (rightly) surmised that by giving an explicit Federal-Guarantee on the funds of depositors at banks, the probability of bank panic would decrease.

This theory played out for a long time, exactly as the federal government believed.  However, some criticized the creation of the FDIC because it essentially created a 'common pasture' for the banks and depositors.  The depositors no longer had an incentive to analyze the credit-worthiness of their local credit unions, thrifts, and banks - all deposits became identical (backed by the FDIC).  The banks no longer had to worry about depositors withdrawing money if the bank was being 'too risky' - so indeed they began buying up riskier assets and giving out riskier loans.  Quite likely, the FDIC played a large role in creating the 'Too Big to Fail' problem we now face, because there essentially could not be a failure - when banks succeed, more profits; when they fail, FDIC pays... Tragedy

(Tragedy did ensue... some believe the S&L crisis was caused by FDIC insurance, and perhaps even the current recession, which originated from excessive bank lending/risk-taknig)

But I digress.  Living Within Limits carries on the discussion began in Tragedy of the Commons, and Hardin makes one more plea to the rest of us for constraint (for our own sakes).  In the tradition of thermodynamics, here is something to leave you with in this introduction/rant:

Hardin's Second Law of Human Ecology:
There's no away to throw to.