Market or Community Failure? Critical Perspectives on Common Property Research

By McCay, Bonnie J.; Jentoft, Svein | Human Organization, Spring 1998 | Go to article overview

Market or Community Failure? Critical Perspectives on Common Property Research


McCay, Bonnie J., Jentoft, Svein, Human Organization


The best known revisionist perspective on the so-called "tragedy of the commons" underscores important conceptual and hence policy errors and has been important in contributing to understanding of conditions in which collective action for common benefits, with respect to common pool resources, can take place. Characterizing this perspective as a "thin" or abstract, generalizing explanatory model, with strengths and weaknesses thereby, we discuss a "thicker" or more ethnographic perspective that emphasizes the importance of specifying property rights and their embeddedness within discrete and changing historical moments, social and political relations. We argue that this perspective leads to a focus on "community failure" rather than "market failure" as the presumed cause of environmental problems, and hence, to questions about how markets, states, and other external and internal factors affect the capacities of communities and user-groups to respond adequately to environmental change.

Key words: common property, resource management, environmental policy, embeddedness

Arguments about problems with "the commons" in the modern era derive from attempts to understand the political economy of capitalism and, more particularly, the "failures" of capitalist markets from the perspective of liberal economics. Why, in a capitalist economy generating so much wealth, are there so many poor people? That was the question prompting William Forster Lloyd's Oxford University lectures in the 1830s (Lloyd 1977). He explained poverty by virtue of an analogy between a pastoral commons and the English labor market, and between a calf and a human child, the calf armed with "a set of teeth and the ability to graze," and the child armed with a "pair of hands competent to labor" (Lloyd 1977:11). Rights to enter the pasture or the labor market are open to all and thus pastures are overgrazed and labor markets are over-saturated, resulting in the low wages and miseries of the laboring classes. Given free rights, resowing the pasture or raising wages would do little good because overstocking and overpopulation will only recur. Lloyd's Malthusian view was picked up in the 1960s by Garrett Hardin (1968), who added the language of marginal utility from economics to the pastoral analogy. Even though there might be signs of overstocking, it is rational for the individual cattle owner to add more animals to the pasture because his utility will be positive, say +1, whereas the negative utility to him is but a fraction of -1 because the costs of overstocking will be borne by his neighbors as well. The rational decisions of each individual accumulate to create an irrational dilemma for the group, and freedom becomes tragic.

The model that Hardin revived was taken up by students of institutional and natural resource economics and the evolution of property rights. The question changed from why so many poor people to why natural and economic resources were wasted and depleted. Based on institutional economics and notions of transactions costs and externalities, the problem of the commons was defined as one of incomplete or non-existent property rights, which they labeled "common property" or, synonymously, "open access." Common property, in the sense of no property rights or other controls on access, became the key source of disincentives and externalities; without well-defined and exclusive property rights; markets fail to do their jobs matching individual and social interests.

The metaphor of the "tragedy of the commons" has become a folk and academic explanation for many social and environmental problems. One of its appeals is doubtless the fact that like its close relative in political science, public choice theory, its prescriptions and assumptions can be congenial to those from the political "left" as well as the political "right." But it is not unchallenged. In this article, we review recent critical perspectives on problems of the commons and emphasize the importance of taking an approach that recognizes the embeddedness of resource extraction practices, institutional arrangements such as property rights, and other features of commons dilemmas. …

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