I first was introduced to the tragedy of the commons in Lawrence Lessig’s book “The Future of Ideas”. It deals with the problems that exist when one tries to apply “real life” economic models to digital content. Bits are virtually free, you pay a pittance per bit to your Internet provider. In return you get a copy of every bit that exists on the planet.
So why would you pay for digital content? It’s an issue that many content producers are wrestling with. Apple’s iTunes store gives you convenience and a clear conscience in return for the money. But there’s no reason you couldn’t find the music for free some other way if you really wanted to. This works for the big players, so it’s hailed as “the solution”. If you’re a small fish, trying to earn a living with digital content, you’re still stuck, though.
The reason you pay what you pay for physical goods is because they are scarce. If they, like bits, would be available in abundance, the price would approach zero. The tragedy of the commons claims that, if you made those scarce goods available for free, there would be riots and no one would have anything.
At first it doesn’t sound like a bad theory. The example usually given is a common pasture. If too many people let too many cattle graze there, the vegetation would disappear and the grounds become worthless.
Last years Noble prize winners proved that a different outcome is possible. They showed with real life examples that the freely accessible pastures don’t always turn into barren wasteland.
It’s a nice thought to start the new year with.