Tragedy of the commons explained: Why socialism doesn’t work

The rental car companies wash rental cars. 

That's because they own the rental cars. People who rent them don't.

The only problem with Stossel's article is that we have to assume that the people that believe that the goverment should raise taxes so it can 'help people' can't see the errors in their thinking because they seriously believe that there are no errors there.

That's because they own the rental cars. People who rent them don't.

I think the bigger point you are making might be zooming over Loca's head, so I'll spell it out here:

If you are like most people, when you rent a rent-a-car you do so with absolutely no intention to care for it.  It's not yours, and you really don't care if you tear it, grind the gears, lead foot it, hot foot away (jack rabbit starts) at stop lights and stop signs, or otherwise basically destroy the vehicle.  Why do you care, provided that you aren't going to be asked to pay for any damages you might cause or which can be tracked back to your handling of the vehicle?

Unless you are renting from a company like Enterprise (who can be total pr-cks! about rentals where they go over every inch of the vehicle when you check it back in, looking for dings, dents, scratches, scuffs and other marks to require you to pay to fix), you normally pay for the rental, take the vehicle, squeal tires as you leave the rental car facility and go out and abuse the vehicle for the time it is in your possession.  Not yours, you don't care about how you treat it.  Especially if you pay for the insurance on it and don't expect to have a claim made against your insurance.  TEAR IT UP.

Compare that thinking to how you treat your own vehicle.  Normally far more gingerly, and much more lovingly and careful.  You own it, you pay for it, you probably make payments on it.  You need it long term, and need it to work right for a long time.  You probably want it to look nice too, and take better care of it so it will have more value if you go to trade it in later on.  Again, the idea being that you want your possession to be nice, versus something you only temporarily possessed and don't care about.

Is socialism in a pure form possible? Absolutely not. But neither is capitalism! There is a third option, which is called a "mixed" economy. It is this third option that is always attacked by both the Friedmanites and the Marxists because it's considered a mutt breed of ideologies. Funny thing is, I think it works best of all the systems. True laissez faire capitalism is a system of prescribed misery for the majority of the people, as is a totalitarian socialist state. If you meet in the middle, you'll be okay!

I agree with Stossel that, in concept, private ownership can be a good thing. I have no problem with someone owning their own land and discovering the challenges of personal responsibility and stewardship. That's good stuff. However, on a larger scale there needs to be a clear line drawn between public and private ownership, and the public sphere (government) is necessary to regulate what you can and can't do with your land. Yes, you can grow a farm on your land, but there need to be enforced laws making sure that you're not mucking things up for other people. Not every single animal, plant, rock and patch of dirt needs to be "owned" by private interests, and nor should it be.

I disagree with Stossel about how when a resource is publicly owned it is always neglected, but if it is privately owned it will be nurtured. I know of many a gold mine in my part of the world that raped the land for all it was worth in the name of profit and then moved their operation to another area once all the good ore was gone, leaving a gaping scar on the land filled with arsenic. Yup, real good stewardship there! Whether a piece of land or important asset is taken care of doesn't have anything to do with public vs. private. It has everything to do with good and bad management, and there are plenty of arguments and examples of good and bad operations in both camps. 

I believe that certain assets need to be public- school systems, roads, national infrastructure. And yes, healthcare!!! I will say this to my grave!

Define "socialism" and tell me how it differs from the economic system a typical family (two parents, two or three children) practice in their own household (or in Greek: their "economy").

Wikipedia article



"Even today Hardin's essay "The Tragedy of the Commons" is a source of controversy. Some of this stems from disagreement about whether individuals will always behave in the selfish fashion posited by Hardin (see discussion below).

More significantly, controversy has been fueled by the "application" of Hardin's ideas to real situations. In particular, some authorities have read Hardin's work as specifically advocating the privatisation of commonly owned resources. Consequently, resources that have traditionally been managed communally by local organisations have been enclosed or privatised. Ostensibly this serves to "protect" such resources, but it ignores the pre-existing management, often appropriating resources and alienating indigenous (and frequently poor) populations. In effect, private or state use repeatedly resulted in worse outcomes than compared to the previous commons management. As Hardin's essay focuses on resources that are fundamentally unmanaged, rather than communally managed, this application of his ideas is misplaced. Ironically, given his original hypothetical example, this misunderstanding of Hardin's ideas is often applied to grazing lands.

More generally, Hardin made it very clear that usage of public property could be controlled in a number of different ways to stop or limit over-usage. As has been pointed out by Natalie Wanis, Hardin's advocacy of clearly defined property rights has frequently been misread as an argument for privatization, or private property, per se. "

The tragedy of the commons does apply to unmanaged public resources. It does NOT apply to state-controlled public resources.

Example:

Public land used for grazing will be subject to the tragedy as all cattle owners try to use it up as quickly as possible so that the others won't.

But if the same public land were state-controlled and rented out to (not owned by) the cattle owners (each will pay the market rent for the part he wants to use), the tragedy does not apply.

The tragedy of the commons teaches us that communism (i.e. anarcho-socialism, I am using the word in its original sense here) doesn't work, but it is a VERY string argument for socialism (i.e. state-sponsored socialism).

In fact renting out the land to cattle owners rather than let each claim as property as much of the unowned land as they can before other people arrive will use the land more efficiently than an ownership system will. Since all the cattle owners have rent to pay, they must use the land they rent, otherwise they are wasting money. But a land owner (alodial title with no mortgage) can leave his land lie unused, waiting for the price to rise (land becomes scarce since supply is constant but demand goes up as the population grows). Economic inefficiency translates into profit for the land owner.

Hence the tragedy of the commons shows us that communism (see above) doesn't work, that socialism does work and that capitalism is inefficient.

If there is a price to pay for using the land, people will use the land efficiently. If there is no price to pay for all, people will overuse it (communism). If there is no price to pay for some, people will underuse it (capitalism).

Not the point Draginol wanted to make, I suppose.

(Note that this is a philosophical point. The tax system is not grazing land. Draginol's point applies to taxes and the tragedy of the commons gedanken experiment can be used to prove it. But the tragedy of the commons does NOT in general show that socialism doesn't work, quite the opposite is true.)

I believe that all necessary and natural monopolies should be owned/controlled by the state. Everything else should be owned privately with no state interference.

Necessary monopolies include the military, the police, and government. Natural monopolies include land, other natural resources, distances between places (used for cables, bridges), the environment, and streets.

Health care is neither a necessary nor natural monopoly, although a state-sponsored health care system has great advantages. Nobody wants to be seriously sick AND have to worry about whether he signed the right insurance contract and how to get the insurance company to pay NOW and not a few weeks later; and competing against each other for medicines is just stupid for customers and will make medicines more expensive.

I also feel that most people are really underqualified to make the right decisions when it comes to health care. I certainly don't know whether I want a health insurance that pays for any (random chemical formula) I might require or not.

Diseases also spread, which means that a person unable to pay for his medicines can be a danger to the rest of us (as are those who refuse to vaccinate their children).

I believe that all necessary and natural monopolies should be owned/controlled by the state. Everything else should be owned privately with no state interference.

I wont go that far (no state interference), but just barely.  Anti-Trust is state interference, yet for a common good.  The problem is that in all applications, the law of ownership applies to the state.  The state may own it, but they do not control it.  Bureaucracies do, and they have no incentive to manage the asset wisely or efficiently.  Their incentive is not the wise management, but increased control (increased control leads to larger responsibilities and hence more money and power). And that is where Socialism breaks down.

As far as I'm concerned when I PAY to rent a car the payment I make includes a wash. Why the heck would I pay someone more money to wash something that I feel I already paid to be washed. If the rental company wants me to wash it they should put that in the agreement. Now, if you mean leasing a car, which I actually do, in fact I lease 2 cars, then I wash them regularly.

"nobody ever washes a rental car".

That reminds me of back before I learned about other religions and their practices.  I always heard the phrase "give it up for lent"... not knowing any other meaning of the word "Lent", I thought it meant giving up on ever getting something back, just like when you "lent" something to someone. ;~D

So they say, but I have yet to see anecdotal evidence or a moral case for anti-trust laws (except those regarding natural resources).

All state interference is for the "common good". People disagree what the common good is, though.

I believe the state should use its monopsony power to influence the market. I.e. I would propose laws that prohibit the state from buying from the market leader, except for military, police, medical, and disaster recovery equipment.



State ownership does not necessarily imply state oversight. I would simply rent out everything to individual title owners or corporations. The rent the government would get is a result of market forces (highest bidder gets the resource) and might be more than enough to pay for all government services. Hence all other form of taxation could be abolished.

I would simply rent out everything to individual title owners or corporations.

But that comes back to again who is monitoring the renting.  Bureaucrats.  And goes back to my contention before.  They have no interest in the asset, and will not manage its rental or usage for the betterment of anyone but their own powerbase.

And you are right on Common good.

In fact, people do wash rental cars. Link I don't know if people find it easy to believe the opposite because our culture promotes self-interest, or because it helps validate selfish behavior if you believe everyone else is doing it.

I don't believe Stossel's idea of "you need to privatize the commons!" makes sense. In specific, I think cattle wander too much and fencing is too expensive (before the invention of barbed wire) to make fencing up the commons viable. In a larger sense, if something is "excludable" so that it's possible for one person to prevent another person from using it (like with a fence), then that thing does not meet the definition of a commons, or public good.

I don't quite understand how his example of giving villagers property rights in elephants works. The villagers can sell hunting rights to an elephant for $10,000. But how do they keep the elephant from wandering away to Botswana and getting hunted there? Better to sell him off right away than hope he hangs around your area long enough to reproduce. I followed his link but it wasn't quite enough to explain why it works.

The same people currently overlook ownership titles. I expect about the same amount of bureaucracy (or rather a lot less) and corruption. They will have nothing to do with how the resources are used, they will simply collect the rent/taxes.

I am saying it will be "a lot less", because the system would get rid of all the bureaucracy involved with income and sales taxes. The government need not know how much you make, only how much (land/other natural resources) you use. It will not need to know how much your house is worth, only the value of the land it's standing on. You will not have to hire anybody to help you find out whether you paid too much or not enough taxes on your income or property, because the amount is very clearly visible to you, the government, and everybody.

Everyone currently involved with income or salex taxes in anyway could find _gainful_ employment in the economy instead.

We would get rid of the most complicated taxes, the most intrusive government agency, and unused land (nobody will simply keep land around and not use it if it costs rent or taxes do so), and we would gain thousands of new workers currently employed directly or indirectly by or for the current tax system.



Indeed.

Noumenon:

Your link is entertaining, and gives another explanation of why people may not wash rental cars, but the point is still the same... Even with the short period of time most people have rental cars... it's still (barring off-roading and wanting to prove toastmasters wrong) the owner that's willing to wash it. ;~D

That sentence makes the wrong point. It is "long" that makes people wash cars, not "short". So it's not "even" but "obviously".

If somebody would rent a car for a year (or for good), he'd wash it, I am sure.

The owners is probably willing to wash it because the next renter is not willing to rent a dirty car. I have seen many cars owned that are not washed.

But your link said that most cars aren't rented out long enough to get dirty anyway. ;~D

My link?

Excuse me, 'the' link. My mistake.

Leauki,

All political systems have their grand theory, stating how they would work in a pure environment untainted by culture, religion or past events. Basically, how they would work in a vacuum. This is the big problem with ideology in my mind, as man has never lived in this untainted "pre-historical" or supposedly natural vacuum. In the world of radio, this is similar to the concept of an isotropic antenna. In practice, isotropic antennas don't really exist but they are handy for explaining many of the properties of radio wave propagation and dispersion. But you will never see one floating above your car!

With that said, for me the definition of socialism, or true "pure" socialism is a system whereby there is no private property whatsoever. Absolutely every resource, asset and piece of land is owned collectively, equally administered and shared by everyone. This is not doable, nor would I ever want to try it! On the other side of the coin, the same applies to capitalism. Under ideologically pure capitalism, there is no such thing as "the commons"- every single centimeter of the earth and everything on it is owned by private individuals, with no laws regulating trade or commerce- the mythological object of worship called "the free market", which in my mind is also a farce and will never exist.

Sadly, people on both sides will forever push their brand of ideological purity, quite often with religious zeal. The scary thing about any system that is ideologically pure is it will never compromise with or for anything, and could only ever work so long as humanity is in some kind of tabula rasa, pre-historical blank slate upon which it can be rebuilt anew.

Now just follow me through on this- whenever you have the introduction of any kind of absolute system (communist socialism or attempted true free market capitalism)it never works, and it never will work. And in both cases, we see the EXACT SAME FORMULA BEING APPLIED. When the system doesn't work, the proponents of that system argue that it is because of impurities or distortions in societies fabric that need to be undone. We need to destroy the old model of civilization and rebuild anew! We need a complete blank slate upon which to sculpt our masterpiece! So the prescription is the same. Smash society to bits and rebuild it. Shock the patient with enough electricity in the hopes that their brain will be wiped clean of all memory and we can start from the ground up! This comes in the form of re-education camps. Taking children away from their parents and putting them through ideological indoctrination. Completely privatizing all functions of the state, doing away with trade protections, price controls and wage laws.

Every time this is tried, the proponents of the theory succeed in smashing their nation to bits, but when they try to rebuild it in their perfect vision, it never works the way it's supposed to. They then argue that this has nothing to do with the dammage they've inflicted, but because they didn't quite succeed in completely resetting everything to zero last time. While they got close to their blank slate, there were still a few impurities that mucked things up! So, clearly, the only possible option isn't to admit that their system isn't feasible due to human nature, but to use more force, more changes, more shock to truly reset things to a tabula rasa. That is the great myth: humanity never has and never will exist in this magical state they seek to rebuild things. So they will go on destroying their own society, unwilling to admit the ridiculousness of their ideas until either some outside force comes in to take over, or their own people get fed up and have a revolution!

We did that, in my family.

The government (parents) controlled the property and everybody got the share he needed and contributed as much as he could (i.e. the parents worked and the children only consumed).

There is no purity in the real world.

The less private ownership we have of things, the more socialistic the society is.

I find it interesting to see someone use a family analogy. Most of us do not view the government as something analogous to a mom and dad.

Which is in itself a strange and new thing. It's only a few hundred years ago that paternalistic/maternalistic forms of governance were the norm. There are governments now that offer the same level of paternalism - the most famous in the last century was probably Haiti under the doc or any of a number of nations boasting a 'father of the motherland'.

When you think about it the analogy is pretty apt to the kinds of extended family that used to exist in the West and still exist in less developed areas. There's a family matriarch/patriarch (the executive). There's a coalition of aunts/uncles who do all the planning and legwork and offer advice to the head of the family (senate/reps). And then there's the others, who contribute part of their wages and their spare time for the good of the family as a whole (the taxpayers).

As humans we're inclined to think of things as familial relationships. I would be more concerned about the background and motives of those who don't than about those who do.

Governments try to tap into our family-loyalty circuits to get us to support their non-familylike organizations. If they could really get you thinking you should obey the leader like your father, or sacrifice for others like your brothers, they could get a lot more loyalty from you.

The family is actually subversive to government because it gives people outside loyalties and unofficial sources of support.

I don't think of the government as a family, but the family does make a good example of a human organization that functions well without private ownership. But it depends so much on the evolutionary impulse to support your kin that government can't really operate the same way.