In their textbooks, economists typically refer toRead More
Look at your dining table or your clothing and you might see “Made in China”. Thinking of all they are producing, a market economy might come to mind. Next, though, take a look at the Index of Economic Freedom at:
China is ranked lower than some might expect. The link that explains why they fared so poorly takes you to their lack of property rights and investment freedom. Interestingly, they score higher on monetary and fiscal freedom. Also (and predictably), they have relatively more “trading freedoms”.
Econ ConnectionRead More
What to produce, how to produce (land, labor, capital), and who receives the returns are the three basic questions all economies answer.
Good discussion of the Tragedy of the Commons in three podcasts:
1. 2009 Nobel Laureate, Elinor Ostrom, discusses her ideas in the 10/23 Planet Money podcast. In a 15 minute interview, she uses her department’s messy refrigerator as one of her examples.
2. An 11/30 Econtalk discussion between Russ Roberts and Pete Boette further looks at Ostrom. One interesting question from their private/public ownership talk: Can a lighthouse be privately owned? But then, why would the owners leave the lights on??? They have an answer.
3. Then, finally, in an 11/02 Econtalk interview, Russ Roberts and Michael Heller discuss the “Tragedy of the Anticommons”–where private ownership of such publicly held resources as “airwaves” can lead to less productivity because there are too many owners. (http://www.econtalk.org/archives/2009/11/heller_on_gridl.html)Read More
I just heard a perfect example of “the tragedy of the commons.” (defined yesterday) In a recent “Curb Your Enthusiasm”, during a dinner party, Larry David observed a friend depleting the caviar on a buffet table. Predictably, he complained to his hostess.
-underproduction in Plymouth Plantation, 1623 when everyone farmed together.
-blue fin tuna depletion (http://dotearth.blogs.nytimes.com/2008/11/26/the-tuna-tragedy-of-the-commons/)
Still more tomorrow…
Negative Externality:Read More
When a “transaction” has a negative impact on an uninvolved party. For example, a polluting factory impacts people who live nearby. A loud music player affects others in the dormitory. Negative externalities are experienced through the tragedy of the commons.
According to a recent NY Times article (10.31.09), the Parisian bicycle sharing program has experienced considerable vandalism. Although the article attributed the damage to gangs of unhappy immigrant youths, I wondered whether the tragedy of the commons was relevant. More tomorrow on this year’s Nobel prize winner and solving the “problem” of the commons.
Tragedy of the Commons: When a resource is shared by many rather than privately owned, it tends to be “misused” or “overused”. For a pasture, “misuse” is over grazing; in the ocean, fish populations are depleted; in the air, factories pollute.Read More