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From the “Tragedy of the Commons” to the Tragedy of Enclosures

August 2, 2016 • EMERGING TRENDS, Capitalism in the 21st Century, Climate Change & Society, World Development

By Olivier De Schutter and Katharina Pistor

If the enclosures movement that swept through England in the 18th century was the general rehearsal, the play has now been staged for over two centuries, and has penetrated deep into all regions of the world: wherever we look, the privatisation of resources is gaining ground. Resources that used to be treated as “commons” or “common pool resources”, managed by the local communities, are being commodified.

 

Public utilities such as water or electricity provision are increasingly subject to the same treadmill of titling, exclusion and allocation in accordance with the pricing mechanism, with little attention paid to needs. This has not happened by chance or without theoretical justification. Three separate arguments are commonly used to justify the allocation of resources through the combination of property rights and market mechanisms, which ensure that scarce resources go to the highest bidder.

First, only by protecting private property rights can we ensure that resources will not be depleted. Private landowners, for instance, will internalise the costs of using scarce resources and thereby ensure that they will be productive in the long term.1 In contrast, resources that are shared (that have the status of “commons) are destined to be overused, because of the collective action problem so influentially described in 1968 by Garrett Hardin as the “tragedy of the commons: as illustrated by the overgrazing of open pastures, resources that are not privatised will be depleted, because every user will take out as much as possible without regard to the sustainability of the resource.2

Second, property rights transform resources into a capital that can be financialised. In contrast, capital that is not formally recognised is “dead”: it cannot be used as collateral by would-be entrepreneurs in order to monetise it. This is the argument made familiar by H. de Soto in his most important book, The Mystery of Capital, published in 2000,3 in which he attributes the failure of poor countries to grow to undeveloped property regimes. Even before it was made explicit in de Soto’s work, the argument played a central role in the titling programs implemented under the auspices of the World Bank and other organisations in the developing world in the 1990s, a process that gained pace during the past decade.

 
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About the Author

schutter-webOlivier De Schutter is a professor at the University of Louvain (Belgium) and at SciencesPo (France) and currently a visiting professor at Yale Law School. He served from 2008 to 2014 as the United Nations Special Rapporteur on the right to food and he is since 2015 a member of the UN Committee on Economic, Social and Cultural Rights. His publications are at the intersection of human rights, international economic law and the theory of governance.

pistor-webKatharina Pistor is the Michael I. Sovern Professor of Law at Columbia Law School and director of the Center on Global Legal Transformation. She has published widely on transition economies, comparative corporate governance, law and finance and the limits of property rights and is the recipient of the Max Planck Research Award (2012).

 

References
1. Demsetz, Harold. 1966. “Toward a Theory of Property Rights.” American Economic Review, 57(May), 347-59.
2. Hardin, Garrett. 1968. “The Tragedy of the Commons.” Science, 1962, 1243-48.
3. De Soto, Hernando. 2000. The Mystery of Capitalism: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books.
4. Coase, Ronald H. 1960. “The Problem of Social Cost.” Journal of Law and Economics, 3, 1-44.
5. De Schutter, Olivier and Katharina Pistor eds. 2015. Governing Access to Essential Resources. New York: Columbia University Press.. A free online version of the book is available here http://cupola.columbia.edu/governing-access-to-essential-resources/
6. Scitovsky, Tibor. 1992. The Joyless Economy. The Psychology of Human Satisfaction. New York and Oxford: Oxford University Press.
7. Ostrom, Elinor. 1990. Governing the Commons – the Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press.

 

One Response to From the “Tragedy of the Commons” to the Tragedy of Enclosures

  1. Citysuz says:

    What a brilliant article on the value in redefining the commons movement to provide resources and agency to communities.

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