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Comment by r00fus | Hacker News Reader

Does market economics work if there's no way to prevent the tragedy of the commons?

That's a confusing question. The tragedy of the commons happens specifically when a resource is under- or un-priced.

It's not a confusing question. The tragedy of the commons happens when a company or person abuses a resource that is provided for the good of all. We can look at any company and realize that compared to an average individual the pollution and resource consumption is crazy.

The problem with industry is that everything is value added but nobody looks at externalities sufficiently or value subtracted.

If a free market is left alone to set prices, do any resources end up under-priced?

No- but that presupposes the existence of a well functioning free market, which everyone agrees we do not have with water.

The key is to 'sell' or 'gift' the property rights to the resources that were previously part of the commons (and to a party that can economically protect their new asset).

I'm hoping one day something like that will happen with fisheries, e.g. someone will own fisheries or maybe even schools of fish. Anything less seems doomed to tragedy.

Note that government management of a previously 'commons' resource is, in theory, the same basic arrangement. In practice tho, the very different incentives shaping government organizations doesn't seem to as reliably protect resources as for private entities.

('Markets fail'. Governments fail too. What's the expected difference in the rate of failure of the two?)

This is the most important question of our era.

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