Property rights and commons
Susse Georg & Inge Røpke
The classification of the different types of goods is based on purely practical assessments of their characteristics: Is it practically possible to exclude people from using them, for example, if they do not want to or can not pay? Will an individual’s consumption of a good reduce the ability of others to use it? Therefore, the types of good are not defined according to how property rights are organised. It is difficult to make some goods private property if it is not possible to exclude others from using them when they do not pay, but for other goods, there are many opportunities for organising property rights. A service such as hospital treatment is a private good because users can be excluded and because it is scarce. However, there are big differences in how different countries organise the supply of this good: while hospitals are mainly public in Denmark, they are private in the United States. A central discussion in the field of the environment is focused on how property rights for natural resources can best be organised in order to avoid overexploitation. Much of the debate has been based on the concept of commons.
Most are probably familiar with Fælledparken (the common park) as the place in Copenhagen where many celebrate 1st May. This very popular park was originally a common grazing area for cattle. From sometime in the 1400s to the early 1700s, the local residents had common property rights to the area. Each farmer could graze a certain number of cattle on the grass according to a carefully agreed system. Therefore, free access to unrestricted use of the common was not the case. Rather, access was organised in the form of a kind of quota system. From the early 1700s and the next two hundred years, the common was used for military purposes until the area was taken over by the City of Copenhagen and transformed into a public park (1908-12).
However, commons were not solely a phenomenon of Copenhagen, they also existed in many villages around the country. Their use was regulated by common law – rules which had gradually been developed in the village communities in order to safeguard against the overexploitation of the areas. The introduction of the agricultural reforms (in the mid-18th century) marked the start of the decline of the commons, while each landowner’s land within the village was separated.
Such village commons have long since disappeared in Denmark. However, the phenomenon still attracts much attention, partly because many natural resources are common resources, but also because new forms of commons are emerging as a result of societal development.
One of the most well-known narratives about commons is that they are synonymous with tragedies; a connection that was established in the article ‘The Tragedy of the Commons’, which was published in the most prestigious journal Science in 1968. The article concerns a common grazing area that is accessible to all. According to the author, Garrett Hardin, the tragedy occurs because the most rational action for each individual farmer is to exploit the grazing area as much as possible (to graze his animals). When everyone acts in this way “Freedom in a commons brings ruin to all” (Hardin, p. 1244). There is an implicit assumption in Hardin’s argument that the tragedy could be avoided by introducing private property rights. Only in this way would farmers have an incentive to take care of (their respective part of) the grazing area.
Many years passed before this narrative was criticised. The Nobel Prize winner, Elinor Ostrom, and her research group have documented how communities in many places around the world have actually developed different ways of managing their shared use of grazing areas and other forms of common resources, such as forests, fishing grounds and groundwater reservoirs. Against this background, they have been able to highlight the hidden assumptions in Hardin’s story. Furthermore, they have pointed out that Hardin’s story does not concern commons, but instead grazing in cases where there is free access to the limited resource (open access and, thereby, no social control). Therefore, he had overlooked the possibility that people in fact collaborate to find solutions to their common challenges.
Hardin’s article compares two types of property rights system: private, individual property rights, which was Hardin’s solution to avoiding the overuse of a scarce resource, and open access, which means that no one has ownership (or if someone has, it is not enforced). The latter was the tragic phenomenon he actually described. However, Ostrom has identified two additional systems of property rights (some call them property regimes): group property rights, which is developed in a group to regulate use and prevent others from exploiting the resource, and state property, which is when the state has the right to exploit the resource. One of the results of her research is that you can not say, in general, that one property rights system is better than another at regulating resource consumption as this must be determined in specific circumstances.
Based on her studies, Ostrom has established eight principles for managing common resources:
- The group that wants access to shared resources must be clearly defined – when people know each other, they are more likely to trust each other.
- The ‘rules’ for people’s use of the shared resources must address local needs and conditions, otherwise there will be greater risk that people will not comply with the common rules.
- For the same reason, those who are affected by the rules must also have the opportunity to influence their development. There must be a democratic process.
- The local society’s self-regulatory measures must be respected by external authorities.
- A system that community members can use to monitor the behaviour of group members must be developed.
- Sanctions for those who violate the community’s rules must be graduated.
- Provide accessible and inexpensive forms of conflict resolution.
- The responsibility for regulating resource consumption must be built from below.
This does not mean that a local community will necessarily develop the rules or mechanisms that can manage the use of a common resource because many problems can arise along the way. For example, some may not want to comply, some may want to decide too much (be more powerful than the others), or other types of conflict may emerge.
Nevertheless, today, the concept of the commons serves as a model for how to find new ways of managing our resources. For example, many consider urban space as a form of commons – it is difficult (and/or costly) to exclude others from using it, while one person’s consumption of it may well reduce the potential for others to enjoy the same urban space if the person, for example, vandalises the area. Kitchen gardens are something that all passers-by can enjoy, but they are difficult to protect against vandalism unless it is possible to develop a norm in the local area that such behaviour is unacceptable and somehow apply sanctions on those who destroy the gardens. For many, the question of (re) introducing commons in cities concerns residents’ democratic right to influence the development of their neighbourhood.
Viewed from this perspective, commons encompass more than just biophysical common resources (see the examples of urban space or kitchen gardens above). In these examples, the commons are associated with fundamental ideas about what constitutes good urban life – what some call ‘liveability’ – and an ideal of getting closer to nature. At the same time, commons are also involving – people become engaged in ensuring the development of their local area, which can influence people’s identity and their sense of belonging. Commons are socio-economic, biophysical systems or communities.