Sunday, October 10, 2010

The Real Tragedy of the Commons

One of the most important conditions for a perfectly competitive free market is perfect knowledge on the part of all actors in that market, buyers and sellers both. That perfect knowledge is an impossibility is of little interest to theorists pushing Efficient Market Hypothesis, and that it would in fact be against concentrating material success and for distributed equality is overlooked. What therefore caught my attention recently was how open information flow assists cooperation and sharing rather than competition, keeping the playing field level where it is actually practiced. In “Governing the Commons” 2009’s ‘Nobel’ prize winning economist, Elinor Ostrom, looks at real world examples of folk who have successfully escaped the supposedly water-tight trap of the Tragedy of the Commons. Of course, perfect knowledge is flat out impossible, but decent transparency among members of some particular scheme is very doable, helping otherwise mutually suspicious participants trust one another, so that they can share fairly a resource held in common without over-using it.

In the huerta (farms) of Valencia a robust non-ownership system for distributing the scarce water of that region has been successfully operated on a commons basis since 1435. Water is a vital and scarce resource, and yet the farmers self-organize to operate their particular solution for sharing equally among themselves the water they need for irrigation (“Governing the Commons” 1990, pp71-2). Theirs is a complex system including regular Thursday meetings of a lawyer-free, judicial committee to settle disputes, and has an amazingly low infraction rate of 0.008% (p75). This is long-term cooperation over many centuries for managing a scarce and vital resource, including maintenance of the irrigation infrastructure, in which all participants have equal access to all relevant information. It is but one example of many in that semi-arid region of Spain (see also Murcia and Orihuela, and Alicante).

In Alicante, where water is scarcer still, water rights are locally issued in the form of scrip, which can also function as money should its holder so desire. “Considerable information is made available by the irrigation community to enable farmers to make intelligent choices [regarding their scrip].” (p79) Indeed, a repeating theme throughout the book is the importance of all participants being fully informed as key in establishing trust. This is not about having good information for yourself then cornering the water market for profit, this is about helping sustain the community which sustains all. Note how sharing information helps the community, but how ‘information-hoarding’ would lead to profit at the expense of others. It seems to me that accumulating profit for self is the enemy of healthy community, over the long term.

The sharing system which most appealed to me though was developed in the Philippines (the zanjeras), again for irrigation:

biang ti dega [contracts] share an underlying pattern. The area is divided into three or more large sections. Each farmer is assigned a plot in each section. All members are thus in fundamentally symmetrical positions in relation to one another. Not only do they own rights to farm equal amounts of land, but they all farm some land in the most advantageous location near the head of the system and some near the tail. In years when rainfall is not sufficient to irrigate all of the fields, a decision about sharing the burden of scarcity can be made rapidly and equitably by simply deciding not to irrigate the bottom section of land. (p83) [My emphasis.]

Ah the genius of humans! See how an open, transparent setup sustains community and enables trust and sharing, rather than fostering perfect competition? See how important fairness is to us? Doesn’t reading that warm the cockles of the heart? It certainly cheered me up. And yet the word “fairness” barely makes an appearance in the entire book. Ostrom seems most concerned with the Benthamite idea of Economic Man, that rational, machine-like creature who lives solely to maximise profit:

I use a general conception of rational action involving four internal variables — expected benefits, expected costs, internalized norms, and discount rate — that affect individual choices of strategies in any situation. (p195)

Run that description of rational action by the Piraha, who cannot count higher than one, and see what sense it makes there! Recently, as I discussed in an earlier blog, economists were shocked to discover that humans might be hard-wired for fairness. The scholar of economics involved in the experiment tried to define fairness as selfishness, but it was a desperate and hollow attempt. I read “Governing the Commons” seeing our need for social fairness writ large in each of the success stories detailed, as well as in the failures (of which there are many), and yet those students of human behaviour who want to be cooly scientific studiously avoid notions of fairness. Indeed, there is a palpable and pervasive reluctance to consider ‘airy-fairy’ matters such as sympathy, empathy, compassion, charity and so on, in economics, a ‘science’ more important to the shaping of the human world than any other. Its blinkered insistence on pure, rational selfishness is a cultural straightjacket we need to escape, a straightjacket responsible for the real tragedy of the commons; ‘free’ market economics itself.

How then to proceed in a manner that engages those in the halls of academia still too timid to confront the bleedin' obvious; the beautiful and kaleidoscopic complexity of homo sapiens sapiens, but a youngster on this planet? I think McMurtry’s “The Cancer Stage of Capitalism” holds the key. We should start by addressing ‘need’:

A need for something exists if and only if, and to the extent that, deprivation of it regularly results in a an absolute reduction of its owner’s life-range capability. (“The Cancer Stage of Capitalism”, p153)

We can apply the term ‘need’ both to the healthy functioning of individuals (whatever an ‘individual’ is), as well as to society generally. In the human sphere, human-as-system and society-as-system are of course interdependent. For McMurtry a healthy society provides:

(1) Continuity of life-sustenance to members of the social body;
(2) Functioning contribution of members to the life-requirements of the larger life-organization to which they belong;
(3) Maintenance of the biophysical carrying capacity of the environmental life-host. (p104)

Systems function healthily or they don’t. A healthy system has, at a minimum, its needs met, where society should by definition meet the needs of its members. Humans and societies both are systems. This is a non-political aspect of reality we should all be able to agree on. However, Capitalism has signally failed to yield this base requirement; the healthy society. Yet still we cling. Our mainstream continues to laud ‘free’ and efficient markets. What do their ‘freedom’ and efficiency deliver? One example of many:

With 97.5 per cent of all foreign exchange transactions devoted in 1998 to predatory appropriations of the world’s money demand by currency speculators, the ‘constituency’ for instability of the global economic system appears, in fact, to have run out of control. Money investment which seeks to become more money without production of any life good or service has been known as long as usury, but never before as the dominant decision-structure of social life-organization. (p116)

We have an insane culture focussed psychopathically on profit for profit’s sake. Since Smith’s (co-opted) invisible hand and Bentham’s rational man, we have been labouring under the cultural belief that rationality is profit-maximizing selfishness (though the roots of this stretch back into antiquity), and that that particular type of ‘intelligent’ selfishness benefits society better than any possible alternative, because this invisible hand thing somehow smoothes all our squabbling and turns it into progress and prosperity for all. There can be no ‘rational’ argument against this water-tight hypothesis, because it is itself the product of pure rationality. The evidence is all around us. Shiny cars and buildings don’t grow on trees you know.

The evidence is piling up that the ‘post-modern’ way is rotten to the core, serves the psychopathic elite before all else, while efficiently trashing the life-host which enables our existence. Somehow, despite the evidence and the great thinkers bringing it to our attention, the mainstream remain so lost in the bullshit, even enquiring economists like Ostrom can miss the obvious. Karl Polanyi shows us the steps of this strange dance:

Liberal economy, this primary reaction of man to the machine, was a violent break with the conditions that preceded it. A chain-reaction was started - what before was merely isolated markets was transmuted into a self-regulating system of markets. And with the new economy, a new society sprang into being.

The crucial step was this: labor and land were made into commodities, that is, they were treated as if produced for sale. Of course, they were not actually commodities, since they were either not produced at all (as land) or, if so, not for sale (as labor).

Yet no more thoroughly effective fiction was ever devised. By buying and selling labor and land freely, the mechanism of the market was made to apply to them. There was now supply of labor, and demand for it; there was supply of land, and demand for it. Accordingly, there was a market price for the use of labor power, called wages, and a market price for the use of land, called rent. Labor and land were provided with markets of their own, similar to the commodities proper that were produced with their help.

The true scope of such a step can be gauged if we remember that labor is only another name for man, and land for nature. The commodity fiction handed over the fate of man and nature to the play of an automaton running in its own grooves and governed by its own laws.

So we have The Global Market, or The Price System, or money-value, running our lives; we have the idea that we must ‘earn a living’, exchange our freedom for a wage to be free; we are told efficiently transforming the planet into various types of commodity, forever and ever, is The Way To Live, and this in a well-known curve called Perpetual Growth. This is what we culturally believe, and deeply. We are confronted, then, with the task of killing our most cherished cultural beliefs to rescue civilization. Polanyi again:

As a matter of fact, human beings will labor for a large variety of reasons as long as things are arranged accordingly. Monks traded for religious reasons, and monasteries became the largest trading establishments in Europe. The Kula trade of the Trobriand Islanders, one of the most intricate barter arrangements known to man, is mainly an aesthetic pursuit. Feudal economy was run on customary lines. With the Kwakiutl, the chief aim of industry seems to be to satisfy a point of honor. Under mercantile despotism, industry was often planned so as to serve power and glory. Accordingly, we tend to think of monks or villeins, western Melanesians, the Kwakiutl, or 17th-century statesmen, as ruled by religion, aesthetics, custom, honor, or politics, respectively.

There is not only One Way, there are Many. Even trade can be diversely motivated. We are complex beasts, not binary machines operating on a simple profit=good/loss=bad duality. Don’t believe the hype.

We devise astounding means of communication, but do we communicate with one another? We move our bodies to and fro at incredible speeds, but do we really leave the spot we started from? Mentally, morally, spiritually, we are fettered. What have we achieved in mowing down mountain ranges, harnessing the energy of mighty rivers, or moving whole populations about like chess pieces, if we ourselves remain the same restless, miserable, frustrated creatures we were before? To call such activity progress is utter delusion. We may succeed in altering the face of the earth until it is unrecognizable even to the Creator, but if we are unaffected wherein lies the meaning?
Henry Miller

The real Tragedy of the Commons will be our failure to progress in the only way that matters; culturally. In the end, there is only The Commons, which is the entire Universe, in which there is enough to go around for all, if we choose to see it that way. The system devised by elitist control-freaks to prevent social nucleation, to encourage perpetual tribal tensions and mindless competition over shiny gadgets and widgets, deliberately blinds us to alternatives. It is not easy rescuing our free thinking from the labyrinthine prisons it is rutted in, but it can be done. If we are to survive, it must be.


Debra said...

Really excellent post, Toby.
I agree with everything here.
Jung said... show me your God, and I will show you your vision of man.
None of our ideas arrives in a vaccum.
Descartes : the animal as MACHINE...
Hence a mechanistic take on our universe, where the words mechanism, machine, functioning are omnipresent.
And when man fell into the "animal" box... guess how that bounced off of the "machine" box ??
Of course we are an extremely Procrustian animal : when WE do not conform to our ideas, we chop off.. heads, ideas, feet, arms, whatever, to make MAN conform to our current Social Darwinist idea of man.
And this is accelerating now, too.
But there are resisting forces.

Toby said...

Thank you. And may those forces be with us!

p.s. You'd really dig Charles Eisenstein. I'll gather a list of links for you...

Debra said...

I'm so lazy... I love it when people chew my work ahead of time for me... :-)