Read With : TheTragedyOfTheCommons
Theorists always seem to come back to villages and goats and so on. It's not just that they're nice simple autarchic economies, but that there's something of the pastoral fantasist in all of us.
There is a village of peasant farmers who keep goats. The farmers can graze their goats on the village common for free. For any farmer, using the common is cheaper than buying feed. But if everyone grazes their goats until theyre full on the common, the grass on the common will soon be eaten. If this happens, everyone will suffer the rest of the year.
The villagers agree a solution everyone will graze their goats on the common half the time. This gets the best use out of the common land without over-grazing.
The solution is unanimously agreed at the village meeting. But once back in their homes, every farmer has an opportunity to go over the decision again. Every farmer has to choose between two actions overgraze, or follow the group plan. The outcomes from overgrazing or not depend on what the other farmers are going to do.
If all the other farmers follow the plan, and you follow the plan, you get half your feed for free.
But if all the other farmers follow the plan, you could try and cheat and still overgraze. One farmer overgrazing on his own does not have a noticeable effect on the supply of grass. There is enough grass then for you to graze your goats all day long for free.
So if you think the other farmers are going to follow the plan, you can do better by overgrazing.
If all the other farmers overgraze and you overgraze, it goes back to the old way - everyone uses all the grass in the first three months, and only gets a quarter of a years feed.
But if everyone overgrazes except you, you do worse still. You are following the plan grazing only half the day, but all the grass is gone in three months. You end up only getting an eighth of your feed for free.
So whatever the other farmers do, it makes sense for you to overgraze.
The problem is that every farmer is going to be thinking the same thing. The agreement collapses, and we all get just a quarter, like before.
The decision on the half-grazing plan could have been arrived at by a fair egalitarian decision process. But the subsequent decisions by the farmers to overgraze all the same also make up a fair decision process everyone had an equal say, because in the end everyone decided what to do with their own small herd.
Perhaps that is the problem. What we need is a government or authority to police the commons and enforce the agreement.
Perhaps we need GoatPolice.
Nice - various memories of GameTheory lectures leap back at me :) Perhaps this could all be considered as a kind of natural selection of groups - those with the ability to consider large scale and/or long term effects of individual actions naturally survive, while those who can't see past the end of their nose die out more rapidly. As it is, humans tend to the latter ;)
Policing's one response. Education is another. I suspect a bit of both is the reality, though it depends on the population involved. However, policing is more easily attainable through technology, so scales better, alas.
I like the idea of mutant goats in police uniform with batons and riot shields. JeffMinter would be proud.
See also PrisonersDilemma,