Visualizing the Tragedy of the Commons

When a resource is abundant, it makes sense for it to be cheap. But as the scarcity of a resource (whether it's renewable or non-renewable) is intensified under the pressure of growing demand and diminishing supply, a market failure arises if an efficient price is note established that assures the resources is consumed at a sustainable quantity. This lesson illustrates a simple supply and demand analysis of the Tragedy of the Commons.

[abdullahsaeed]

aren't forests technically owned by the countries that they are found in? same with minerals and fossil fuels..

[davidhadley]

But supply curves are determined by marginal costs of production not by the availability of a natural resource, so this analysis is fundamentally incorrect

[leetaituha]

An absence of a 'pricing system' is not characteristic of a 'Free Market'. You obviously do not understand what a 'Free market' is. The Tragedy of the Commons occurs when a Free market is not allowed to operate, have you ever heard of a harvester, fisherman, wholesaler, or retailer producer for that matter who do not allocate a price to their offering? What is a solution?, precisely the opposite to what you have tried to explain, get government out of the way and allow people to freely set prices, and you will find a spontaneous order occurring without one politician in the picture. You have attempted to outline a solution to an issue in which your solution is the very reason why the tragedy occurred in the first place. You are attempting to outline a how Capitalism is used to explain failures of governments being advised by Economics luminaries that espouse these fallacies. You were perfect right up until the end, where you tried prescribing the contagion as the cure...

[TheWildWalker]

This series was really such a helpful and useful. Thanks ..keep moving.👍

[carolinec]

You rock, thank you so much for all these videos!!! I am going through them all.

[arthurcainii]

~8:38
Doesn't a "Free Market" imply a price system? Also, a free market would facilitate ownership of these otherwise-unowned areas via some form of homesteading.

Governments can't perform price discovery, because they can't identify market signals. They don't produce anything that wasn't reallocated from someone else's productivity, and any failure of a government program to read market signals merely expands its budget.

International/Government ownership of resources are even more exploited, because those who enjoy the development rights to a resource are going to be necessarily politically-connected.

[leyki]

Where can I find this graph in literature?