On Resilient Settlement

Tools and strategies for transition

Watch out for those “externality costs!”

Tragedy of the Commons

An illustration of the Tragedy of the Commons, applied to land use. The concept applies to other, broader commons-based resources too.

I think the name of the game nowadays is not left and right, not populist and elitist, not rural and urban. It’s the Tragedy of the Commons, and we’re all culprits at present. But what is happening in the political world is best understood as, who is best at working the Tragedy of the Commons for their own maximum short-term benefit? (You could consider this a version of the old Watergate maxim, “follow the money.”)

The Tragedy of the Commons in economics comes from the old story of 100 people with 100 cows grazing on their Commons. If one of those people adds one more cow, that is only a one percent loss for the group, but a 100% gain for the single villager. So the villager has every reason to persuade the rest of the group to look the other way. The harm is not that great to the rest of them, after all.

The trouble of course comes when a second villager does it (with only another slightly less than one percent loss for the group, but a near-doubling of gain for the second villager). And then another, and another, and so on… and soon, the Commons is trashed.

Replace any commons resource (forests, fisheries, minerals, water, climate, etc etc) and you can quickly see the problem in modern economic and cultural terms.

One serious kind of proposal is to privatize the commons, and then hope that market mechanisms will take care of the rest. As materials get depleted, prices go up, rewarding conservation. BZZZ, wrong answer! Markets can fail (who knew?). Rationality can be bounded. Villagers can trash the commons, sell all their cows before the prices fall, and skip town.

To complement (not replace) market dynamics, we need wise stewardship. We actually do need a civic philosophy, and a realm of civic and ethical choice. (Again, who knew?)

More pointedly, and more relevant to today, villagers can come up with all manner of smokescreens of what is really going on. Perceptions can be managed, milk-starved children can be totted out, lost dairyman jobs can be bemoaned. Villagers can be pitted against one another, adding to a growing state of confusion.

This is not random, of course. It is a winning strategy, at least in the short term.

A better answer, that still exploits some of the self-organizing power of markets, is to “monetize the externalities,” to figure out what the actual impacts will be to the commons, and then assess fees (and rewards) accordingly.  In essence we need to create a web-network of feedback loops, whereas there are too many “dead end economic pathways,”  that leave dead ends for our outcomes too.

This is not a simple matter — of, say, finding a mechanistic formula. It involves dynamic, adjusted predictions of nature, and also ethical choices — just as we do all the time, in setting tax rates, or park fees, or store rebates, or frequent flyer miles, or anything else. (No, it’s not all done by magical “invisible hands.” Yes, we get feedback, and make adjustments — but it is WE who are in the cockpit, flying the civilization so to speak — not just a kind of economic “autopilot”.)

A carbon tax would be one example in today’s world. So would a broader “Georgist tax policy”, taxing consumption of resources like land, but leaving untaxed (and therefore relatively incentivized) the wealth that is created WITH the resources. This “Georgism” is an approach that often unites people on the “right” and “left” politically speaking.

(Among other urban benefits it would reward compact urbanism, whereas the current system rewards parking lots and sprawl. Part of the reason is that building a building that may or may not make any money but definitely has increased real estate tax just adds to risk and cost, whereas fleeing to the cheaper land, or finding low-risk returns like parking lots, mitigates that cost.)

There is a whole world of strategies and approaches of this kind, and I think we as urbanists should be looking hard at them. (I could make a long list: demand-based parking or tolling charges, congestion charges, location-efficient mortgage credits, “feebates,” SDC credits, etc etc etc.)

But the economy as a whole also has to transition to this direction, if we are to avert absolute catastrophe. I increasingly see this is the stark reality we face. And what is sure to happen along the way is increasing manipulation, rationalization, emotional button-pushing, divide-and-conquer, confusion, gaslighting, divisiveness, anger, paranoia… conflict.

This will not be random. This will be the game well played by the inevitable opportunists of human civilization. We are their prey, or we are their competitors – it’s our choice.

The former alternative means that our future will be stolen, and sold off to the highest bidder for a quick, destructive profit.

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This entry was posted on June 24, 2017 by .

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