This is mark Joseph “young” blog entry #377, on the subject of A New Tragedy of the Common.
In the early nineteenth century an economic principle was recognized which would later become known as The Tragedy of the Common. It has many applications, particularly in relation to modern environmental concerns, but I’d like to call attention to a new one emerging.
The concept is really rather simple. In medieval and post-medieval villages there was an area of grassland that was available for general public use, the common or commons. People would graze their sheep on it, as most did not have enough private land to support sheep raising. What was noticed is that the number of sheep being grazed on such shared land was usually more than the land could adequately support, and so the sheep fared poorly. The complication, though, was that although for the benefit of the community as a whole the total number of sheep should be reduced to a level sustainable by the land, for any one farmer the way to maximize his own return was to increase the size of his own flock. Although this reduced his return per sheep, it increased his total return–unless the system collapsed and the sheep died.
We can see this in application in many situations–the overfishing of our fisheries, poor forestry practices, the destruction of our jungles, the pollution of our rivers. Each individual benefits by destroying a bit more of the shared world. I, however, want to address a much more recent economic phenomenon.
It was joked not too many years ago that a particular retail distributor had become the internet’s electronics showroom: people interested in high-end electronics such as televisions and home entertainment systems and computers would visit their stores, examine the available products, then return home and order what they wanted more cheaply over the internet. The concept has spread far beyond electronics: reportedly many local game stores have been closing because customers browse in the store and then purchase what they want online. The pandemic of the past year has intensified this problem, because people were either prevented from or afraid of visiting retail stores, and so a great deal of purchasing shifted to online sources. Retailers of all stripes are struggling; customers are dwindling. Those of us who were driving during the pre-Christmas weeks noticed how sparse the traffic was compared to previous years, and not all of that was due to reduced disposable income. The number of the new Amazon delivery trucks on the road is stunning.
It struck me, first, that the issue really is whether we generally, individually, are willing to pay a little more for the things we want and need in order to keep the convenience of having local retail stores. After all, if the stores make no sales they cease to exist, and they will struggle even if they make a few sales. The disappearance of retailers will be a major shift in our economies, as many people are dependent on jobs in those industries. Additionally, even if you can get next day delivery on products from some online retailers, that’s not always fast enough, and having a local brick-and-mortar store that carries what we need means we can get it today, possibly even tonight if it’s open twenty-four hours. Although it is a disadvantage to us to have to pay a bit more, the advantages of having retail stores might be worth it.
But then I saw the tragedy. It is perhaps an inverse of the example, but in this case it is to every individual’s advantage to buy more cheaply online, but a disadvantage to the community to lose retail outlets. Further, because of this it is likely that individuals will in greater numbers move their purchases online until support for local retailers is inadequate and they are forced to close their doors. It thus becomes disadvantageous for anyone to support local retailers, as these are probably doomed by the force of the economic situation, and once they close those who tried to patronize them to support them will have spent that money with no way to recover it and no benefit to show for it, while those who abandoned the local shops sooner will have saved money in the process.
Is there a viable solution to this? Probably not–but it is part of a larger problem, that automation is reducing our need for a work force. There will continue to be fewer jobs for people, and particularly for unskilled workers, who will become an increasing burden on the welfare systems, unless we can devise a different economic system for the future.
I don’t see it, yet.
4 thoughts on “#377: A New Tragedy of the Common”
Good thoughts. It also applies to the choice of buying foreign, cheap (Chinese) products instead of nationally-produced goods. Each individual saves some money by buying abroad, but on the whole the national industries colaspe or relocate to the low-salaries countries. Thus when you buy cheap, you undermine a neighbor’s job. But he’s doing the same to yours… so everybody looses.
It’s an “invisible hand” that destroys jobs.
Fortunately, as an ecominist pointed out “automation” and market mechanics like this have destroyed jobs since the 18th century, but new needs have also been created, and jobs with these.
Indeed–although at least here in America we’re more and more moving to a service economy, which means a lot of clerks and waiters and such. That’s threatened by the online economy. Thus we have to figure out what’s the next low tier job market.
Back in the 80s I read something in Omni Magazine which predicted that possibly within a century we would have a world in which 10% of the available work force could do 100% of the work that humans had to do, the rest handled by machines. The problem it then predicted was that we would need a way to support the 90% of the potential work force that had no jobs. Somehow the profits from production would have to be allocated to the consumers.
Maybe that’s not accurate, but I think it helps explain why the wealth gap is widening.
All the points brought up are great, in the comments and article. :D I have 2 points, one scary, and one positive! Now I could bring up more, but I will simply leave it at these 2.
One: The world economic forums solution is the Great Reset and Agenda 2030, no it’s not a good solution…. But it merits some research, you can find the information on their site, here is one link: https://www.weforum.org/agenda/2016/11/how-life-could-change-2030/ – There also used to be a video, I watched it a few years back, they have since taken it down, I know people have preserved it, but personally, I do not have a link to it. No it is not just a thought exercise, as the article note says, this is actually what these globalist are pushing for right now. I know it will sound crazy, but it is their material, I’m not making it up. This option, of course, would tie into a lot of other things going on, including getting able bodied people dependent on government assistance, possibly, creating a motivation for them to not work.
Two: The other solution, and it is a viable one, is more people move to become entrepreneurs, and I remember reading, but I don’t have the article handle, that business applications have increased in the last year. I am going to assume that is because as people have lost jobs, they are moving towards the next best option, and in many cases, a better option altogether, self-employment. Small business, both on and offline is very important, and I don’t think we should undermine the importance of this. I have been an entrepreneur for a long time, with varying success. Last year was poised to be our best year, and then everything shut down, I am currently in the process of shifting most of our business to be done online, and we were already headed in that direction anyway, it simply sped it up. It is sad that most people are not taught working for themselves, or even starting a business that could employ others, as an option.
Thank you for your thoughts, Amy.
On the former, some form of socialism is always what is pushed by the majority of economists. I had a professor in college who said that was the theory that was pushed on them in college, so it’s part of their education for most of the past century.
On the latter, unfortunately “small businesses have an astronomical failure rate”, and that’s been true for a long time and continues to be true. One of my sons is the only employee of a small retail outlet, and he is persuaded that the increased minimum wage is going to cost him his job and put the store out of business. Entrepreneurship is wonderful when it works, and best of grace to you on that, but for most people it doesn’t work.