Tuesday, May 8, 2018

A tragedy of the commons

In discussion with a Facebook friend we ventured into talking about communities where restrictive covenants are used to define specific property rights. My friend posted a link to a definition of the "tragedy of the commons" and my response follows.

So.. tragedy of the commons. I know the concept. I see this as a serious problem only for societies that do not have clear property rights. When there is property that "no one owns but everyone owns", i.e. state-owned property, there is no way to allocate resources, to determine priorities, to objectively resolve disputes, to coordinate economic activities.

The reference you provided refers to demand overwhelming supply. In a free market this is impossible except in the very short term because free people can expand the supply of any given resource. To many people this is counter-intuitive because they see resources as finite, as mere physical objects, when in fact resources are everything in reality that man's mind can conceive. Every single thing we see as a resource today has existed for millions of years - the difference is that humanity did not have the reasoning ability, the knowledge and the social structures of freedom and capitalism to realize the potential of these resources. Let me provide a few examples.

Until the minds of men were able to discover and exploit the principles of chemistry, that dark, gunky, toxic soil that was a blight for farming was worse than useless but today has become the most abundant, most economical, most life-supporting energy source yet discovered - oil and other fossil fuels.

Until the minds of men discovered certain principles of chemistry and physics, there was no such thing as steel, aluminum and a multitude of alloys that today support the structure of our homes, our offices, our factories, our bridges, cars, trains and planes.

Until the minds of men discovered and exploited certain principles of biology, the perpetual state of almost all mankind was starvation and malnutrition but today our supply of food has expanded so far obesity has become a problem in many advanced nations and risks becoming so for even poorer nations in just a few decades. I think most people would rather have the challenges of obesity than starvation.

Thanks to enlightenment thinkers, industrialists in relatively free countries discovered ways to mass produce goods and services in such vast quantities that supply not only exceeded what their contemporary populations could use, but can now provide supply for a vastly increased population with little difficulty.

Supply is not a function of a limited view of resources but rather one of human imagination and freedom. If one specific physical resource appears to be in short supply, a free economy sees its price rise, which then attracts additional attention from producers, who then work to discover new ways of producing or alternatives that may even make the earlier ways entirely obsolete. The energy field is a classic example. In the early part of this century there was a hue and cry about "peak oil" and forecasts of doom. Oil prices rose rapidly. Alternatives were sought and so quickly discovered and implemented that the USA, which was previously a huge oil importer, now is an exporter. If government and anti-human activists had seen this coming they would have had a decent shot at preventing such progress and this is evidenced by their strident opposition to shale oil, horizontal drilling, hydraulic fracturing, oil pipelines, oil tankers, oil trains, and even the production of oil and other fossil fuel sources - they oppose every single economic source of energy. This advance happened so fast they were caught flat-footed. Today, the supply of oil and other fossil fuel energy is greater than at any time in human history, not because the raw material was not available, but because human minds had not yet identified it and found ways to make it a resource.

And what's next after fossil fuels? Likely fusion, which requires raw materials that are incredibly abundant and is a process that produces nothing humanity considers a pollutant. The potential supply of energy from fusion is so vast it is easily a thousand times more than that of fossil fuels, and we have centuries of supply of fossil fuels remaining. From a time less than two hundred years ago when whales were being killed for their oil to today when we can see unlimited energy resources in front of our noses, the raw materials found in nature did not change one iota. What changed was that men were largely left free to make the best use of the resources they had currently discovered and this enabled them to discover even more resources. it was not environmental activists who saved the whales but the geologists and engineers and venture capitalists who launched the age of oil that did so.

Now back to the tragedy of the commons. Imagine what would have happened if all property was owned by the state instead of by individual people and the voluntary relationship groups they form such as partnerships and corporations. Do you think we would have ever advanced to the stage of having industrial scale steel, aluminum, oil or anything else? Not a chance.These great leaps forward always occur in the more free society, where there is a degree of respect for the individual human being, where citizens have property rights and a government protects these rights, including intellectual property rights. While a country founded upon enlightenment principles leaped further forward than any country in all of history in just a hundred years from its founding, a multitude of other countries that remained collectivist, tribalist, fascist and otherwise did not protect the individual and his mind remained mired in primitive squalor.

The same is true today. What country, when it was relatively free for a while was formerly one of the wealthiest but now has in just a couple of decades fallen so low that all of the pets, all of the animals in the cities and even the zoo animals have been eaten by its people while formerly middle class citizens forage through garbage in search of food? Which country has the world's greatest known supply of oil, yet thanks to a true tragedy of the commons is pathologically unable to produce enough energy even for its own citizens to live as rational human beings and has gas prices at about $10 Cdn per liter? Which country once exported food all around its area and just a short time later depends on international aid to delay mass starvation? What country has an inflation rate of about thirteen thousand percent (80% per month) and and has seen GDP shrink by about 16% in the last year? What triggered this horrendous change? Was it the adoption of freedom, the protection of individual rights, the implementation of free trade, free markets, the limiting of the role of government to rights protection and the removal of rights-violating regulation - that is to say was it capitalism?

Or was it the antithesis of capitalism, meaning collectivism: the elevation of so-called group rights above the individual; the destruction of free association including the right to form corporations and seek economic production; the attack on objective law that protected citizens from those who would violate their rights, especially the state; the attempt to equalize all people's situations in defiance of their individual differences; the reversal of the proper role of the state from the protector of the right of citizens to pursue their own reasoned decisions to the agency that dictates how citizens must behave, organize their productive activities and even think? Did this country suffer from an excess of freedom and capitalism or the near total destruction of these?

Did socialism ride to the rescue of this formerly partially capitalist and wealthy country and make all its citizens happy, healthy and equally wealthy? Well, on the side of wealth they are in the process of becoming equal all right - equally poor, equally starving, equally desperate to escape the death-trap of socialism. And yet, do you think these same people, once they have thrown off the first layer of socialist shackles will advocate for ma truly free country, for pure freedom and capitalism, for a state that has as its sole duty the protection of individual rights? Not unless they have the intellectual and moral tools to do so - meaning they almost certainly will not. Rather, they will swing back towards enough freedom to improve their lives for a while and then again will lean towards statism and the cycle will continue.

Oh, and in case it wasn't evident, the country in question is Venezuela and it is currently in the grasp of a true tragedy of the commons.