Missing Out on the Commons

06Jan07

One of the ways that commons stimulate the economy is by providing a target and direction for economic activity. Although commons cost money to produce (or in the case of natural commons, to protect) they appear within the price system of the private market as free resources, or cheap resources. Private businesses re-orient themselves to take advantage of the cheap resource. Examples of this are the road and highway system, which oriented the economy towards an automobile culture, or the Internet, which has given rise to the new online economy that is still developing today.

My intuition is that the provision of new commons, and the energy and direction which they give to private entrepreneurs, is one of the wellsprings of modern economic progress. But there is a dark side to this progess when the common resource is only available to part of the population.

On a basic level, if 9/10s of the population receives all they want of common good A, while the remaining tenth doesn’t, then the unlucky tenth is obviously disadvantaged by an amount equal to the average value of the common resource to an average recipient. If everyone else in town has Internet access, and I don’t, then they can book their own airline tickets while I have to go through a travel agent.

But the problem is greater than that. When the economy reorients itself towards the use of that cheap, common resource, then alternatives to the common resource are slowly eliminated. It is now much harder to find and reach a travel agent and they cost more to use when you do reach one. Before the interstate highway system was built, trains were much more available and retail businesses tended to concentrate in downtowns, but now the rail network can handle only a tiny fraction of our transportation needs and shopping malls are located away from settled areas where property is cheap. San Jose State University, where I am a student, no longer prints its Schedule of Classes; it only has an online version. People who cannot access the common resource, who can’t drive or can’t access the Internet, become increasingly marginalized.

When I visited Indonesia in 1994, I was struck by the integration of the rich and the poor, and by the integration of the poor into the economy. There were a great many poor people, but they were all working, which meant that they all had a place in society. Of course, Indonesia provided few common resources for its population. We provide a great many common resources in the United States, but we often don’t provide them universally. And that may be part of the reason that the poor in the United States tend to fall out of society altogether.

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