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 livestock, his incentive changed from short-term but fleeting gain to long-term sustained gain, so he grazed as many livestock as his pasture’s growth could sustain year after year, but no more.
I thought of that immediately when I saw the New York Times headline “A Single-Payer Plan From Bernie Sanders Would Probably Still Be Expensive.”
Well, of course it would, and not just for all the complicated reasons discussed there but for a very basic reason, one that any decent economist understands: “Single payer” is the equivalent of the commons. Health care consumers (livestock) whose health care (grazing) is paid for by a single payer (common rain and soil nutrients of a common pasture) have a rational incentive to use as much health care as possible, because what they don’t, others will, and when their need arises, they’ll find the health-care providers already booked up (the pasture already full—or denuded).
There is another reason—actually, the underlying cause of the problem of the commons—why any decent economist would predict disaster from Sanders’s single-payer plan: At zero price (real or perceived), demand is infinite, but infinite demand and finite resource (health-care providers) are incompatible.
How does this relate to the environment? Ironically, much of the environmental movement is socialist by instinct. To “protect nature,” its first resort is to government. But where government is “of the people, by the people, for the people,” government ownership is for all practical purposes common ownership—which means government-owned land is the commons. And where government is instead “of the elites, by the elites, for the elites,” elites will treat it as a commons. It should be no surprise, then, that the more strictly socialist (the closer to communist) a country is, the worse its environmental record is. National forests, for instance, are almost invariably less healthy than privately owned forests.
For grazing livestock, for providing health care, or for stewarding the environment, the commons is a bad idea. Private property, privately paid for—in a pasture, in health care, and the environment—is the best path to sustainable flourishing.
This article was first published on The Stewards Blog