A Public Ownership Resolution of the Tragedy of the Commons

Abstract

Imagine a society of fisherfolk, who, in the state of nature, fish on a lake of finite size. Fishing on the lake is characterized by decreasing returns to scale in labor, because the lake's finite size (and finite fish stock) imply that each successive hour of fishing labor is less effective than the previous one, as the remaining fish become less dense in the lake. In the state of nature, the lake is commonly owned: each fishes as much as he pleases, and, we might suppose, calculates his fishing plan by taking the labor of the others as given, as he sees it. Each knows that the distribution of fish will be proportional to labor expended among the fisherfolk: if I fish twice as long as you, I will end up with twice as much fish as you. This is not due to some kind of concern with equity (or the labor theory of value) among the fisherfolk; it is a technological fact, implied by the assumption that fishing labor is homogeneous, and all are equally likely to catch a fish in a unit of time. An equilibrium under common ownership can be thought of as a Nash equilibrium of the game where each computes his optimal fishing plan, given the labor of the others and knowing what the consequent distribution of fish would be. (A Nash equilibrium is an allocation of labor and fish to each fisherman, with the property that no one can increase his utility by deviating in his choice of labor, given what the others are doing.)