Sustainability 2012, 4, 2443-2471; doi:10.3390/su4102443 OPEN ACCESS sustainability ISSN 2071-1050 www.mdpi.com/journal/sustainability Article Tragedy of the Commons, Business Growth and the Fundamental Sustainability Problem Edward J. Garrity Marketing & Information Systems Department, Richard J. Wehle School of Business, Canisius College, 2001 Main St., Buffalo, New York, 14208, USA; E-Mail: [email protected]; Tel.: +1-716-888-2267; Fax: +1-716-888-2525. Received: 6 August 2012; in revised form: 5 September 2012 / Accepted: 20 September 2012 / Published: 28 September 2012 Abstract: This paper reviews the major issues involved in Hardin’s [1] tragedy of the commons, written over 44 years ago, and examines whether these issues are still relevant today. We assert that this model still provides important insight to aid in the solution to our global problems. In particular, we maintain that the underlying issues of growth against limits and bounded rationality are still not adequately recognized and addressed; this underlies many of the reasons for our unsustainable world. Examples from fisheries management are used to examine potential solutions and reveal weaknesses in current approaches. We show how our current, restricted mental models promote social injustice and blind us to developing sustainable solutions. Both the neo-liberal economic view of business that directly seeks growth and the new sustainable development view that indirectly supports growth are leading our global economy in the wrong direction and away from prosperity and sustainability. Current thinking has not realized Hardin’s message that sustainability is of the class of no technology solution problems. We conclude with recommendations to radically advance a new world view and business paradigm. Keywords: bounded rationality; business growth; common pool resources; growth against limits; social justice; sustainability; system thinking; tragedy of the commons 1. Introduction In Garrett Hardin’s seminal essay, the tragedy of the commons, Hardin illustrates a dilemma faced by mankind when confronted with the freedom to make individual choices in situations where the sum total of individual, rational decisions has ramifications for the common good. The main focus of his Sustainability 2012, 4 2444 essay actually deals with the problem of unrestrained population growth. Hardin argues that the population problem belongs to the class of “no technology solution problems.” He defines a technology solution as one that requires only a change in the techniques of the natural sciences, demanding little or nothing in the way of change in human values or ideas of morality [1]. The essential arguments for this case rest on several well understood concepts: (1) in a finite world with a given or reasonable level of technology, increases in the global population will result in a declining standard of living, or at some point “will greatly increase human misery;” (2) One cannot attempt “to provide the greatest good for the greatest number” because it is not mathematically possible to maximize for two or more variables at the same time [2]. If we attempt to maximize population then we have the problem with providing sufficient amounts of energy for this biological base. In addition, even if sufficient technology were developed to produce this level of energy (e.g. nuclear power, fusion, etc.) we then have to deal with the dissipation of this energy. Hardin seems to understand and implicitly advance the notion that a large and growing population will continuously push up against the limits of a finite planet. The population problem is intertwined with Adam Smith’s notion of the “invisible hand” or the idea that individuals’ acting in their own self-interest in free markets will generate behavior that is in the public interest [1]. The contradiction to Adam Smith’s invisible hand is provided by the following scenario: The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy. As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, “What is the utility to me of adding one more animal to my herd?” This utility has one negative and one positive component. 1. The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1. 2. The negative component is a function of the additional overgrazing created by one more animal. Since however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of –1. Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to the herd. And another (…) but this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all [1]. Sustainability 2012, 4 2445 Both the population problem and the overuse of resources (tragedy of the commons) can be analyzed from the perspective of systems thinking. The next section explains systems thinking principles to help understand the situation and explicitly define the interconnected feedback structure involved. 1.1. Systems Thinking A system can be defined as a set of interdependent components organized by design to accomplish one or more objectives [3]. Systems may be comprised of and organized by subsystems and each of these may interact with each other as well as with their environment and share information. One of the features of complex systems that make their behavior difficult to understand or complex is that components, subsystems and systems are so interconnected. It is difficult to change just one thing (component) without it having an effect on many other components and systems. A more useful and truer picture of our complex systems will show the feedback structure involved. Although systems may involve many hundreds of variables or components variously interconnected, the long-run dynamic behavior of complex systems is generated by the interaction of just two basic types of feedback loops, either reinforcing feedback that increases or amplifies changes or balancing feedback loops that counteract or oppose change [4]. Figure 1 illustrates a reinforcing feedback loop where births lead to a higher population. This is a reinforcing feedback relationship and therefore a higher population (increase) also leads to higher births (increase) (i.e., the ‘+’ symbol indicates the same direction of change, see Figure 1b). The graph (Figure 1a) demonstrates that this produces an exponential growth pattern. Such a graph over time can be generated from all reinforcing feedback loops: for example, the higher the amount on deposit in the savings account will lead to higher interest income that adds to a higher bank balance. Reinforcing feedback loops can also operate to produce a decay pattern over time. If a population is declining due to greater predation, hunting (or fishing) or other influences then a lower population level leads to a lower net birth rate. Thus, a decrease in births leads to a decrease in the population (i.e., the ‘+’ symbol indicates the same direction of change) which then leads back to a decrease in births. Naturally, rabbits do not generate infinite or astronomical population levels as shown in Figure 1a. Eventually limits are reached. In Figures 2a and 2b, the reinforcing loop, R1, generates rapid growth in the rabbit population in the beginning, but the balancing loops, B2, and B3 and B4 (see Figure 2b), begin to dominate as the population pushes up against the carrying capacity of the environment (the ‘–‘ symbol indicates the opposite direction of change, so as the population increases the resource adequacy decreases. The reverse would also be true, if the population was decreasing then the resource adequacy would be increasing). When resources decrease and balancing feedback loops dominate, we observe the common S-shaped behavior-over-time graph (Figure 2a). This pattern is quite common in many natural populations since there are often many limiting factors to place a check on runaway (exponential) population growth. Sustainability 2012, 4 2446 Figure 1. Graph and Causal Loop Diagram of Reinforcing Feedback; (a) Rabbit Population Graph, Behavior over Time of Reinforcing Feedback; (b) Causal Loop Diagram (CLD) of Reinforcing Feedback. Population 10,000 1 1 1 7,500 1 1 1 1 1 1 5,000 1 rabbit 1 1 1 1 1 1 1 1 1 1 2,500 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Time (Year) Population : growth 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 (a) + births R1, Population + Population + Growth fractional birth rate (b) Sustainability 2012, 4 2447 Figure 2.