What is a tragedy of the commons? Overfishing and the campaign spending problem.

• Author: Hsu, Shi-Ling

1. INTRODUCTION II. THE TRAGEDY OF THE COMMONS A. Hardin's True Tragedy B. Do Nothing? C. Distinguished From Other Large-Group Externality Problems D. Other Examples of Tragedies of the Commons 1. Traffic Congestion 2. Performance-enhancing Substances in Sports 3. Informational Privacy III. THE OVERFISHING PROBLEM IV. THE CAMPAIGN FINANCE PROBLEM A. Overfishing for Votes B. U.S. Federal Election Data C. Is U.S. Campaign Spending "Excessive"? V. WHY DON'T RESOURCE USERS WANT TO BE SAVED FROM THEMSELVES? VI. SOLVING TRAGEDIES OF THE COMMONS PROBLEMS VII. CONCLUSION I. INTRODUCTION

   Over the thirty-seven years since its publication, Garrett Hardin's Tragedy of the Commons (1) has clearly become one of the most influential writings of all time. The tragedy of the commons is one of those rare scholarly ideas that has had an enormous impact in academia (2) and is also commonly used outside of academia. (3) In legal scholarship, the tragedy of the commons has been used to characterize a scarcity of intellectual property rights, (4) telemarketing, (5) over-litigation of asbestos actions, (6) neglect of Presidential papers, (7) overcrowding of the radio spectrum, (8) overcrowding of the wireless telecommunications spectrum, (9) sidewalk vending, (10) greenhouse gas emissions, (11) water pollution, (12) overdrafting of underground water, (13) and of course, the classic environmental commons problem, overfishing. (14)

   Remarkably, of the thousands of putative applications of the tragedy of the commons, not one has sought to formally define the term. In fact, this overabundance of citations highlights the fact that although we invoke it often, we do not know exactly what constitutes a tragedy of the commons. Hardin himself was most concerned with "exorciz[ing] the spirit of Adam Smith," (15) thus focusing his attack on the perils of unconstrained freedom. (16) Extensive treatments of the tragedy of the commons have emphasized other key aspects of the tragedy, such as resource scarcity, (17) free-rider problems, (18) and lack of property rights. (19) However, after nearly four decades of scholarly examination, no established formal definition has emerged.

   Defining a tragedy of the commons is not simply an academic exercise. As I define it in this Article, a tragedy of the commons involves resource users overexploiting a resource and imposing mutual externalities upon each other. In true tragedies of the commons, Pareto Superior (20) policy moves are possible in ways that are generally not feasible in other large-group externality problems, in which this self-destructiveness is absent. Saving the resource users from themselves and their mutually-imposed harms provides a paternalistic justification for intervention. This irony is what really animated Hardin's famous lament and is the most direct attack on Adam Smith's libertarian manifesto. (21)

   Of course, in overexploiting a resource, resource users may also impose externalities upon a larger group that has some stake in the resource, such as the general public might have in clean air or water. This large-group externality alone may be sufficient justification for intervening, but a true tragedy of the commons specifically involves a situation in which the resource users are detracting from their own ability to continue to exploit the resource. Saving the resource users from themselves provides, independent of the need to internalize other large-group externalities, a particularly compelling case for governmental intervention.

   I use the definition set forth in this Article to analyze a problem that has not been previously recognized as a tragedy of the commons--the problem of ever-increasing political campaign expenditures. In Part II of this Article, I set out my definition of a tragedy of the commons using the overfishing problem and other examples to illustrate what is unique about this class of problems. In so doing, I distinguish it from the broader set of large-group externality problems that are mischaracterized as tragedies of the commons problems, such as air and water pollution. In Part III, I use the overfishing problem to illustrate the dynamics of tragedies of the commons, showing how resource degradation over time impacts resource users. In Part IV, I apply this analysis to the problem of political campaign spending, showing how the problem is similar to the problem of overfishing, and showing how the current campaign spending debate, framed as freedom versus equality, is misguided. In Part V, I address the question of why those trapped in a tragedy of the commons are not more eager to address their joint overexploitation problem. Finally, in Part VI, I discuss solutions to tragedies of the commons, in particular those for the campaign spending problem.

2. THE TRAGEDY OF THE COMMONS

   1. Hardin's True Tragedy

      Hardin's tragedy of the commons has proven to be a worthy foil to Adam Smith's "invisible hand." (22) Hardin's story of resource overexploitation poses a striking contrast to Smith's narrative illustrating the coincidence of self-interest and collective interest. Whereas Smith's lesson is that individuals acting in their self-interest will act to increase collective wealth, (23) Hardin's lesson is that individuals acting in their own self-interest will ruin collective wealth. (24) Consciously or not, all varieties of public policy are debated in ways that draw heavily upon at least one of these two concepts. Indeed, these two competing ideas, each based upon antithetical conceptions of the ability of people to order their own affairs, often serve as the underlying bases of arguments for and against governmental intervention. The "invisible hand" and the tragedy of the commons serve, in this policy realm, as the ideological beacons of libertarians and interventionists, those with opposing viewpoints of the appropriate role of government.

      Whereas the implication of Smith's narrative is quite clear--government should intervene as little as possible--the implications of Hardin's tragedy are not. A variety of different policy prescriptions can cure the "commons" problem. (25) In his article, Hardin called for "mutual coercion, mutually agreed upon." (26) But what does this mean? In the stylized examples provided by Hardin, a variety of interventions might be appropriate. To address the problem of pollution, some form of governmental pollution control regulation may be called for. (27) To address the overgrazing problem described in detail by Hardin, some limits to grazing are called for. (28) But Hardin's message was not consistently interventionist. To address the overpopulation problem, (29) Hardin seemed to prescribe the termination of some social programs that he considered to be subsidies for having more children. (30) To address the overcrowding of national parks, Hardin suggested that privatization might be called for. (31) Hardin's message was that something needed to be done, but he did not seem to distinguish between a governmental solution and a privatization solution, or the range of options in between. (32)

      I suggest that Hardin's greatest contribution, the core insight of his article, is the identification of a class of problems in which there is a need to protect resource users from themselves, and to protect their own long-term access to the resource by limiting short-term access. This is the key to what scholars find most anomalous about the tragedy of the commons: the markedly illiberal notion that protecting resource users requires constraining their liberty in some way. This is how the tragedy of the commons can serve as the counter to the invisible hand--by representing the interventionist position. In Hardin's world, intervention is necessary because, despite the long-term futility of embarking upon the tragic course of overexploitation, people persist in doing soy If a tragic player could take a long-term view of resource exploitation or find a way to cooperate with fellow resource users--hardly heroic things to expect--the tragedy could be avoided. (34) Yet for a variety of reasons, tragedies persist, (35) particularly in environmental settings.

      This formulation of the tragedy of the commons can be distinguished from the broader class of large-group externality problems in which resource users impose externalities upon a larger population, without necessarily harming themselves in the process. This historical confusion exists because in both types of problems the overexploitation pertains to jointly-owned or unowned resources. (36) These ill-defined property regimes serve as the root cause of overexploitation. But Hardin's prescription of "mutual coercion, mutually agreed upon" (37) seems oriented toward solving problems within the resource user group and not necessarily (but often) on alleviating externalities imposed upon those outside of the user group. Furthermore, Hardin's examples of the tragedy of the commons--overpopulation, overcrowding of national parks, even bank-robbing--are most useful for illustrating the human propensity not simply to spoil something for everybody, but to spoil something for themselves.

      What then is a "true" tragedy of the commons? I suggest that a truly tragic resource overexploitation, or a true tragedy of the commons, contains all of the following elements:

      (1) Mutual, uninternalized externalities. A tragedy of the commons involves, if not perfectly symmetrical situations among identical players, at least a mutuality of externalities. The mutuality of externality places parties in mirroring situations in which every player knows that attempts at cooperative behavior will be met with cheating, and that every player knows that every player knows this. Knowing that even if one refrains from cheating others will cheat creates irresistible incentives to cheat.

      (2) Group payoffs that are less in uncooperative outcomes than they are in cooperative ones. The tragedy of the commons must be...