For generations economists have recognized the "problem of the commons." The phrase harks back to when villagers all shared a common pasture. The natural incentive for each villager was to graze as many livestock on it as he could, because if instead he restricted his herd so the demand on the pasture's grass growth was sustainable, his neighbors would run more livestock, the commons would still be exhausted, and he'd be left behind. When instead each person must own the land on which he grazed … [Read more...]