Wednesday, October 14, 2009

This year's Nobel Prize for Economics

Every year the Bank of Sweden awards a prize to some economist, often called the Nobel Prize for Economics even though it wasn’t established by the old merchant of death himself. It has in fact only been going since 1968. Usually the prize goes to some obscure economist for work on some obscure aspect of the market economy. Sometimes it goes to a big name such as the Keynesian Paul Samuelson (1970) or the Monetarist Milton Friedman (1976). Even the mad marketeer Baron von Hayek got one, in 1974.

Very occasionally it goes to someone who has done some interesting work, as when in 1998 it went to Amartya Sen who had shown that famines were caused by a collapse in legal access to food (via money or direct production) and not by any actual shortage of food or overpopulation. This year, too, it has gone to someone whose work sounds interesting – Elinor Ostrom whose 1990 book Governing the Commons: The Evolution of Institutions for Collective Action refuted the so-called “Tragedy of the Commons” parable that is often used to try to show that socialism wouldn’t work.

In 1968 an American biologist Garrett Hardin conceived of a parable to explain why, in his view, common ownership was no solution to the environmental crisis and why in fact it would only make matters worse. Called “The Tragedy of the Commons”, his parable went like this: assume a pasture to which all herdsmen have free access to graze their cattle; in these circumstances each herdsman would try to keep as many cattle as possible on the commons and, in the end, its carrying capacity would be exceeded, resulting in environmental degradation.

Hardin’s parable was completely unhistorical. Wherever commons existed there also existed rules governing their use, sometimes in the form of traditions, sometimes in the form of arrangements for decision-making in common, which precluded such overgrazing and other threats to the long-term sustainability of the system.

One of the conclusions that governments drew from Hardin’s armchair theorising was that existing cases where producers had rights of access to a “common-pool resource” the solution was either to privatise the resource or to subject the producers to outside control via quotas, fines and other restrictions. Ostrom took the trouble to study various common property arrangements some of which had lasted for centuries, including grazing pastures in Switzerland, forests in Japan, and irrigation systems in Spain and the Philippines.

According to The Times (13 October),

“Based on numerous studies of user-managed fish stocks, pastures, woods, lakes and groundwater basins, she asserts that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest”.

In other words, common ownership did not necessarily have to lead to resource depletion as predicted by Hardin and trumpeted by opponents of socialism. The cases Ostrom examined were not socialism as the common owners were private producers. In socialism the producers, the immediate users of the common resources, would not be trying to make an independent living for themselves but would be carrying out a particular function on behalf of the community in a social context where the aim of production would be to satisfy needs on a sustainable basis. But the rules they would draw up for the use of the grazing land, forests, fishing grounds and the like would be similar to those in the cases she studied.

ALB

5 comments:

Anonymous said...

I think that the only solution for USA is the creation of a United Jeffersonian Workers Socialist Front with the traditions of humanist, egalitarian, and the benevolent-moralist, anti-oppression ideologies of George Washington, Thomas Jefferson, Benjamin Franklin, Patrick Henry, Karl Marx, Vladimir Lenin, Leon Trotsky, Eugene Debs, Upton Sinclair, Mark Twain, Abraham Lincoln, Martin Luther King, Hugo Chavez, Simon Bolivar. In order for American workers, peasants and exploited americans victims of this satanic capitalist system to take and reclaim the wealth of this country which is produced by them, but expropiated, and enjoyed by the top 1% to 5% of US citizens. We need to inform and teach US History, moralist values, Socialist values to american children in order to give them the weapons to protect themselves from tyranny and slavery when they grow up to be informed adults, to prevent this country being kidnapped by capitalist-mafia cartels like The Democrats and The Republican Party (2 mafia rings) which is what the US founding fathers warned people about. Many US presidents with white-hats and commonsense like Eisenhower and JFK warned this country about a fascist-cartel growing like a cancer within the Military Industrial Complex and the jewish owned Federal Reserve !

Bill said...

Jesus wept - please take your insane anti-semitic paranoic lunatic ramblings elseplace un-Marxist-Socialist, this is a blog about the abolition of the wages system, not abo0ut refounding America...

Anonymous said...

Bill: You can rot in hell zionist shill who are just like the zionist gatekeepers of Revleft.com a site funded by The Republican Party, AIPAC and the powers that be. Go back to your country Isra-Hell. The main enemy of all americans and the cause of all Middle East problems, you anti-muslim racist.

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Anonymous said...

Bill: By the way, when you create your anarchist wage-less utopia like the lunatics of the "World Socialism Movement (http://www.worldsocialism.org) you can invite me and i can support you. But in the mean time i live here on earth with realist socialist projects like Hugo Chavez, Evo Morales, Fidel Castro, Lula, Rafael Correa who are *real* socialists in reality, not utopian lunatics.

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Imposs1904 said...

revleft.com funded by the Republicans?

Only one numpty on this thread . . .

An anti-semitic dystopian numpty to boot.