How Quickly Can Georgia Eradicate Tragedy of Commons?

Dmitri Popov via Unsplash // CC 1.0

“Where everything is held in common,” society will lack “an abundance of goods…”

Sir Thomas More (1516) Utopia

As a former Soviet citizen, I am suspicious of any kind of collectivist ideas. This can be applied to public or even private institutions if they lack a major engine of success – motivation of those who want to be in control. Or, as Milton Friedman has correctly taught us, who pays whose money?.

William Forter Lloyd, a 19th-century British economist, named the abuse of common property as the Tragedy of Commons.

“The tragedy of the commons describes a situation in economic science when individual users, who have open access to a resource unhampered by shared social structures or formal rules that govern access and use, act independently according to their own self-interest and, contrary to the common good of all users, cause depletion of the resource through their uncoordinated action.”1

Such a situation is only possible if the property rights are not clearly defined or and/or abolished. Clearly defined means that an owner can easily control and sell their property.

So the tragedy of the commons describes the opposite situation – the property belongs to everyone, but at thesame time to nobody, although they all think that a) the property belongs to nobody, and b) they have full rights to the benefits from the property.

The problem of the common property comes from the fact that this property is of limited capacity and there is not enough of it to satisfy the total demand of everybody. But, in fact, such a scarcity encourages the virtual owners to be ahead of others and get the benefits before they turn into a deficit.

The tragedy of commons encourages waste and overuse of the commonly controlled resources. Moreover, individuals lose any motivation to take care of the property to ensure that it can bring the benefits in the future – nobody can predict who will be the beneficiary, someone can becme one earlier than others.

What may prevent individuals from distancing themselves from damaging the property is only the ethical norms they try to follow. There can be a legislation to punish anybody who causes damage to the common property, but the practice shows that when everything belongs to the state – public checking of every individual’s behavior becomes  impossible.

An individual living in the Soviet Union could think such a tragedy (of commons) was only characteristic of Georgians or Kyrgyz, but a quite similar phenomenon could be observed even in the DDR (Eastern Germany). So, if there was something common among the ex-socialist camp nations, one of them was, precisely, the tragedy of commons.

Socialist nations in and around the Soviet Union prohibited private property and killed millions of owners. Then, the communist governments declared the common-popular property in the possession of the government of the party of workers and farmers.

Such a way of property ownership was indirect, impersonal, and formal, – nobody had a right or a chance to purchase or sell any part of the state/privately owned properties.

Extermination and repressions against property owners resulted in converting the property and ethics-based society into a crowd without an elite – ethical leaders. The repressions in the USSR were all well-known, although most people paid attention to the second half of the 1930s, when representatives of the so-called intelligentsia were murdered on a mass scale.

However, fewer people know that the real mass-repressions started directly after the October Revolution of 1917, with up to 20 millions of property owners and representatives of aristocracy were killed (including during the civil war of 1918-1920).

In fact, the repressions against the intelligentsia finalized the mass-murder, not started. What is more important, the Bolsheviks understood very well that the property owners were the most responsible and most active people, and with radical extermination they killed two birds with one stone – they nationalized the property and got rid of their most dangerous opponents. This gave them the chance to easily finish with the representatives of the intelligentsia – there was nobody to defend them.

As the government followed a wrong example of fraud, robbery, murder, and unpunished crime, this influenced the society, and so they had no problem with false-reporting about other people to get ahead.

Without private property, people lost their major reason to cooperate with each-other (I respect your property and I expect you to respect mine). Nevertheless, this disrespect and waste of the resources did not have immediate large-scale effect because of the parallel harsh repressions. Still, beginning with the mid-1950s the repressions softened and the waste, stealing, and abandoning became common.

At the factories, workers were taking unattended inventories, at the kolkhozes (collective farms), farmers were stealing the harvested fruits or vegetables pretending they were from their small yards, and even at the offices people would take home small stationary items.

The tragedy of commons was most visible in the staircases or common yards of the apartment buildings, public transport, parks and cinemas, schools and universities, offices, and streets. In the common space like rainforests or even historic sites people could pollute without feeling any remorse.

This is how it looked like everywhere, more or less. It may have been slightly beter in those countries of the Eastern Bloc, which did not experience the same scale of repressions against the property owners like in the 1922 Soveit Union, or maybe not all the private property was nationalized.

Some of the nations spent less time under control of communists and still had representatives of the generation who were born in free society with private property rights. Those people still kept a strong u understanding of property rights, ethics of property and contract, and the rule of law.

Such nations were most successful during the transition from communism to free market, relatively well returning to normal life and pursuing economic growth. Others got into a long-term crisis, their economies dropped to the levels typical of the 1950s-60s, and recovery was too slow.

During the first years of independence and returning to the market economy, Georgia’s economy lost 80% of its previous capacity, integration to the global market was slow and painful. This also had an impact on the behavior of the entrepreneurs.

Some of them started from zero experience of business, some others (e.g. Red Directors) had only negative experiences of using wasted and stolen resources from the Soviet factories. The beginning was tough and scarry – the main business was to find out how to breach the contracts and agreements. Many people could have gotten a wrong sense that this was the outcome of the wild capitalism, when, actually, it was a result of the true inertia typical of the communism. In the post-communist period, people everywhere were also seen as very rough towards their customers in shops or when providing other services.

Returning to the problem of the tragedy of the commons, it exists everywhere – although maybe less so in the high-income nations. However, there is still a difference between the nations that once eliminated private property and who kept it even if they turned their policies very left. The tradition of private property ethics was kept strongly as well as respect of contracts.

People in such communities may also knew there was a common property without due attention but the strong tradition and habits of respecting any property around could limit their wrong attitudes. In contrast, in a society without private property, nothing belongs to anybody; moreover, those property owners are not around to bring the best practices and ethical leadership, no moral bounds exist. So, step-by-step, people forget about the ethics, neglect the old rules, and try to benefit from the new rules.

Georgia has strong evidence that it was a society based on property rights. The old Georgian proverbs illustrate this phenomenon quite well:

  • the common cow was eaten by a wolf;
  • who will not ride a horse without an owner;
  • breaking your head is better than breaking your name.

It is obvious that the ancestors of Georgians, first, had a very strong understanding of private property and market cooperation, and, second, understood the fundamentals of business life.

Such a strong ethical environment was possible because of developed exchange and practical needs – nobody would benefit in the long-run with cheating and disrespecting others and their properties (you can cheat 10 times, but next time, you will see that nobody trusts you and they go over to others). Competitive powers of the market teach everyone to behave properly and cooperate for mutual benefit, sell better quality goods, and please the customers.

With the elimination of private property and abandoning the virtues of the bourgeoisie moral standards, the Bolsheviks decided to create their own communist ethics based entirely on punishment that did not work without motivation of private ownership and reaping the fruits of the private property.

Demotivated and disoriented people were not able to produce quality goods, but wasted enormous resources instead. The Bolshevik experiment, therefore, proved that it was both immoral and inefficient.

People will need new experiences, years of free market exchange to return back the ethics of private property; the only slowing-down force in this regard can come from the state – if it builds up high regulatory and taxation barriers and does not privatize all the land, estate, and means of production.

With many mistakes (and even crimes), Georgians will learn to follow the rules of free exchange. As many Georgians become property owners, this process will accelerate – they shall become truely responsible individuals, pushing for healthier judiciary, and, therefore, for healthier public governance. And the phenomenon of the tragedy of commons and behavior typically associated with it will be no more.

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