Oranges Are Not the Only Fruit

Ed Conway’s recent article on orange farmers on Mallorca paints the image that the Tragedy of the Commons can be easily overcome by everyone working together to reach an agreement not to exploit common lands. While a nice idea, it is, ultimately, an impractical one. 

There are some individual cases in which a community has worked together such as the Alanya inshore fishery addressed in Ostrom’s Governing the Commons, but the common thread in each case is that these are all closed systems. The local fishermen decided who is allowed to fish and where by drawing lots. They also decided that they would all move one slot along each day (either East or West depending on the time of year) to match the migration pattern of the fish, showing how they were able to use their specialist knowledge to maximise the utility of the fishing spots. 

Likewise, with the question of ensuring their access to water, orange growers in Sóller, Mallorca, have devised their own system. They use the water for a set number of hours per day (calculated with their specialist knowledge) and then switch it off. 

Whilst locally devised systems do work for common resources which few have access to, they simply couldn’t work on a larger scale. Could the whole of Spain operate its water distribution in this manner, via a system of trust? In an ideal utopia we might wish it were so, but we live in the real world. And trust is something earned and built between people who know each other.

Social stigma or retribution, implicit or explicit in the systems that Conway and Ostrom describe, are far more influential on a small island where everyone knows each other. While a group of individuals can overcome the Tragedy of the Commons by working together, the question to ask is how often does this really occur in the wider world? Can we really use our insider knowledge of the planet and all work together to protect the earth’s atmosphere? Could all Londoners and every tourist visiting the city agree just under convention about who can use which roads and when, so as to avoid congestion? 

Spontaneous order does emerge over time and with regularity. Complexity is not an enemy, and nor do you have to know the whole for order to exist. But not knowing the rules you have to play by can be its downfall.

One strategy that works on a larger scale to overcome the Tragedy of the Commons is the certainty of private ownership. Privatisation pushes people towards ensuring best usage of common resources i.e. it pushes them to act in their own self interest. Part of the ‘tragedy’ that is the Tragedy of the Commons is that it forces individuals to neglect considerations about how they can best use the resource in the long term. Private ownership internalises the negative externalities that may arise, forcing those using the resource to look after it - or lose out.

Arrangements between those who have access to a resource and private ownership are by no means mutually exclusive. Private ownership can help to prevent the Tragedy of the Commons, as noted by Elinor Ostrom in the phenomenon of cheese makers in the Swiss alpine. Ostrom reported that farmers could only let the cows that they had fed and housed since the previous winter graze on the common field. As it is expensive to rear cows, this naturally limits the number of cows allowed to graze. This demonstrates how private ownership can be used to help rectify the Tragedy of the Commons, in this case, the over-grazed Swiss meadow.

In a world in which globalisation is ever increasing and the flow of labour changes frequently, any arbitration between small groups seems somewhat anachronistic. New entrants to the pool of common resources will have to fight for the privileges that previous occupants would have had. Associating rights to common resources with private (tradeable) property rights allows for frictionless movement. In Britain, a country which appreciates the movement of labour both from within itself and from outside, this will encourage migration and job mobility. The orange farmers in Sóller would have greater mobility if they had a tradeable right to access the water. The closed nature of the agreement makes it hard for new entrants to gain access to the same de facto rights, detering movement to the area.

Locals working together to overcome small scale instances of the Tragedy of the Common is undeniably good (and thanks to their specialist knowledge, certainly better than anything the government might impose). Yet, so many instances of the Tragedy of the Commons aren’t small scale. They are big problems that need more than just a little team effort.