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Brava! An Uncommonly Fine Winner of the Nobel Prize in Economics

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The selection of Elinor Ostrom as co-recipient of the 2009 Nobel Prize in Economics will do much to advance anarchist theory among people who traffic in ideas.  Ostrom is being cited for her work on the management of common pool resources, or “commons”, and should inspire more thinkers to recognize the potential for solutions to problems that seem immune to both private property and government property solutions.

Her work offers ammunition to those of us who do NOT believe that a free society requires that all property be privatized, as she has done much empirical research on, for example, the management of forests.  Her work also has broader application toward the solution of all manner of “public goods” problems that seem to stump libertarian thought.

I strongly encourage people to read her 1990 book, Governing The Commons: The Evolution of Institutions for Collective Action, but would like in this post to just summarize the principles she identified in those successful attempts to address the “Tragedy of the Commons” problem noted in the classic article of that name by Garrett Hardin.  The application of these principles to all manner of different public policy issues could take any of us the rest of our lives (which, of course, is one reason no centrally planned society could ever do so).

What distinguished the successful attempts to manage commons from the unsuccessful ones in her empirical studies were:

1.  Clarity in the boundaries and rules.  Lawful people that we are, anarchists have a great appreciation for the minimization of unnecessary conflict.  When people know what is and isn’t acceptable behavior to others, it is easier for us to adapt our actions in accordance with those expectations.  Of course, the idiots who spout nonsense such as “ignorance of the law is no excuse” are inevitably government prosecutors: the rest of us understand that common law provides its greatest service by clarifying expectations so that people can interact cooperatively and peacefully.

2.  Local input and acceptance of these rules.  Friedrich Hayek, co-winner of the first Nobel Prize in Economics, would be proud.  The closer someone is to a situation, the more things they’ll know that others do not.  Central planning, even were it performed by angels, would not produce good rules because of information problems.  The fact that angels AREN’T in charge is, of course, another problem.  Ostrom is well versed in “public choice” theory and knows that government regulators are humans with their own information AND incentive problems.

3.  Active involvement of those most likely to be using the commons in the monitoring of use.  The ones who care the most need to either directly involve themselves or else delegate to monitors who are accountable to them.  Again, central planners, especially government officials who are accountable, if at all, to a much wider variety of people than those most interested in the commons in question and for a larger variety of activities than just the management of specific commons, cannot effectively monitor them and be held accountable.  If the people who most need the commons can’t fire those who fail to protect it, the tragedy is inevitable.

4.  Methods for dispute resolution.  Central to anarchist theory is the idea that parties with disputes will agree to third party mediation or arbitration of those disputes.  One of the inanities of government is that any dispute between the government and private persons is adjudicated by the government itself.  The evolution of common law went far beyond the ad hoc choice of an arbiter to arrangements that let parties know in advance how disagreements would be resolved.  Disputes are inevitable: dispute resolution methods are necessary, and do evolve.

5.  Sanctions for violators.  Naturally, those found liable by arbiters or, worse, those who declare themselves “outlaws” by refusing any third party arbitration  may need to be encouraged to comply by proportional sanctions.  Common law anarchists emphasize the value of non-violent enforcement through ostracism and boycott, most effective against those who are part of the local community, but recognize that some cases may require force against violators.  Clearly, the arsonist may need to be restrained physically to protect the forest.  Still, when local acceptance and monitoring of rules is strong, violations are rare, usually accidental, and typically resolved without the need for violence.

Inevitably, this prize will lead to the writing of more accessible literature on Ostrom’s ideas and its implications, encourage more academic research on voluntary institutions of governance and how they arise, and add credibility to the “left-libertarian” point of view that denies the need to use traditional formulations of property rights to solve every problem (although I won’t deny that a broader understanding of property rights as a bundle of rights rather than absolute dominion over a territory is one way of viewing many of these solutions, just as the anarcho-communist support for “possession” can be reformulated as a specific interpretation of  property rather than its rejection).

To Dr. Ostrom: Brava!

Written by Less

October 13, 2009 at 7:53 pm

Posted in Dispute resolution

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