How not to Govern the Commons. The Reasons of 50 Years of Failures

The “Business as Usual” scenario of the 1972 edition of “The Limits to Growth” was understood as a prophecy of doom and ignored, but it was much more than that. This graph tells us a lot about how our global civilization functions and how it is unable to govern the commons for the benefit of everyone.

In the 1960s, an Italian intellectual named Aurelio Peccei was among the first to try to understand what the future had in store for humankind. Initially, he worked on a perspective of abundance, typical of those optimistic times. His main worry was how the wealth of the world could be equitably shared among all the members of human society.

Peccei was not alone in this search. The 1950s and 1960s saw the birth of a number of international organizations aiming to manage the world’s resources equitably and peacefully: UN, FAO, WHO, UNICEF, and several others. But Peccei went one step beyond. In 1968, he created the think tank called the “Club of Rome” and then commissioned to a group of scientists from the Massachusetts Institute of Technology a study aimed at quantifying the long-term evolution of the world’s economy.

The results were consistent with a much less optimistic streak of thought that was emerging during those years. It was a view that saw that the world’s resources were not infinite and that economic growth could not continue forever. The MIT study, published in 1972 with the title “The Limits to Growth,” quantified these worries and saw the possibility of a collapse of the world’s economic system during the first decades of the 21st century. It was the first quantification of the concept of “overshoot and collapse,” a characteristic of all complex biological or economic systems.

What to do to avoid this dire perspective? The sophisticated (for the time) models produced by the MIT group allowed users to understand what kind of interventions on the system could lead to the desired results. You see below one of these scenarios.

In this scenario, a complete stabilization of the economic system is not attained, but birth control stops population growth, reduces pollution, and eases the strain on non-renewable resources. Other scenarios examined interventions aimed at limiting the growth of the industrial capital that could lead to an actual stabilization of all the system parameters.

Peccei and many others saw the problem in terms of governance. In line with the approach of the global organizations of the time, governing the commons meant that the representatives of the nations of the world would reach an agreement based on the known data on how to stabilize the world’s economy. Later, a similar approach would be advocated by the “Conferences of the Parties” (COPs) regarding stabilizing Earth’s climate.

As we all know, this approach simply didn’t work. We can see that from how the world’s economic system closely followed the “business as usual” scenario of the Limits models. Comparing the data for the real world with the curves of the model shows no traces of effects attributable to governance efforts. The world’s governments seem to have played the role of the proverbial ant sitting on an elephant’s head, thinking it controls the big beast below.

The problem was that the Club of Rome (and later the IPCC/COP) were proposing macro interventions on the world’s economic system. But the world was stuck in a Nash equilibrium in which macroscopic changes would necessarily lead to someone losing something in the short run, and that someone reacted trying to maintain its position. For instance, attempts to reduce the consumption of fossil fuels were met with demonization campaigns financed by the fossil fuel lobby.

Tragically, from the 1970s onward, many people understood what the problems were but couldn’t propose or implement anything beyond cosmetic solutions at the individual level: saving energy, bicycling, insulating homes, and the paraphernalia of ideas that go under the name of “degrowth.” All that usually fell under the axe yielded by Jevons and his paradox. The resources saved by do-gooders were gleefully used by don’t-carers, and the overall resource consumption kept growing. With it, pollution kept growing, too, especially in the form of climate change.

Looking back at this story, we see that failure was unavoidable. The global governance structures created during the optimistic post-war times had limited power compared to that of the national governments. The governments, in turn, were usually in the hands of industrial lobbies, which used propaganda techniques to make sure that nothing was done that could damage their economic interests.

And now? According to the current models, we are on the brink of the global collapse detected in 1972. Not only can we not find the global agreement envisaged at that time, but the world is becoming more quarrelsome and mired in wars, exterminations, oppression, assorted hate campaigns, and all the rest. Can we still think of softening the blow?

A difficult question, if ever there was one. But let’s try to examine it. First of all, a general observation: complex adaptive systems (and the world’s economy is one) naturally tend toward stability. That may require several oscillations where the system itself “probes” its boundaries before arriving at a stable state. So, the world system will eventually stabilize; the question is how fast and how steep the oscillations will be. The downward ride that I call the “Seneca Cliff” is not something that anyone would want to experience. A certain degree of intelligent governance could do a lot to avoid the worst.

But do we have evidence that humans are able to govern systems at all? We do; Elinor Ostrom explored this field and showed that many locally managed, small-scale systems can and do attain stability. Small fisheries, forestry, and husbandry are all examples of this capability. This kind of governance may involve mistakes and wrong decisions, but it normally arrives at good results.

Fine, but how about large systems? How about forcing the energy industry to abandon fossil fuels? How about having the wood industry stop destroying the remaining forests? How could the fishing industry be convinced to stop overfishing? How could we convince the agricultural industry to avoid destroying the fertile soil?

Most examples show a series of failures in which all attempts to do something good for humankind were demonized and rejected by one smear campaign after the other. Climate change is just one among the many. The Western propaganda machine is truly a juggernaut that knows no barriers.

Are there exceptions? A few different cases deserve to be examined. One is the action against the COVID epidemic of 2020 that saw most of the world’s governments engaged in parallel governance efforts with the objective of “squashing the curve.” Within some limits, it had some points in common with the suggestions provided by the authors of “The Limits to Growth” to avoid the collapse of the system. In the beginning, the management of the pandemic looked like an example of good global governance, but it soon turned into a disaster. The methods used were not based on experimental evidence, the models were poor (actually, jokes), and the whole enterprise soon fell into the hands of a band of psychopaths who saw it as a way to increase their personal power by harassing people in a variety of cruel and demeaning ways. After this experience, the very concept of “global governance” has taken an ominous aspect.

What are we left with? One possibility is the proposal by Chandran Nair in his book “The Sustainable State” (2018). He forcefully makes the point that no serious measures can be taken against threats such as pollution or climate change if the state is not strong. That does not mean a dictatorship: it means a state that enjoys the citizens' trust, supports itself on a fair taxation system and can clamp down on the attempts of the lobbies to carve the nation’s wealth among themselves. Strong states, then, can find agreement to carry on joint governance efforts.

Nair has in mind China as an example of a strong sustainable state. Apart from having lifted the nation from the dire poverty of not many decades ago, China is operating with a serious plan for decarbonization despite being burdened by a traditional reliance on coal. They plan to become carbon neutral by 2060. It may be too late to avoid huge damage from climate change, but the Chinese have a tradition of doing better than their stated plans. Considering how China is the largest carbon emitter in the world, the decarbonization of their economy will greatly reduce the world’s emissions. And don’t forget that China is the largest producer of photovoltaic panels in the world and also the largest exporter. The whole world is decarbonizing using the products of the Chinese industry.

The idea that China may be an example of governance to follow is a hard concept for Westerners to swallow. In the West, the Chinese government is seen as oppressive and dictatorial. But consider the results that China has obtained and is obtaining. Given the dire situation in which we find ourselves, we should try to learn from those who can teach us something.

h/t Chandran Nair