I’ve been promoting my idea that everything should be shared. And I believe if you want one thing to be best enjoyed by the world, it’s usually very wise to make it owned by the public, then the thing is now called a common. But there is something called the tragedy of the commons, let’s find out what it is and how to solve it.
Let’s say we have three small ponds.
Pond A, B, and Pond C. Pond A is owned by Alice, Pond C by Cathie. But Pond B is a common, which means it is owned by the public. There are fish in every pond. When Alice and Cathie are fishing in each of their ponds, they will be careful not to overfish and extinct the fish.
But the common pond, which is Pond C, is open to the public, so anyone can go and fish there. When Alice wants to fish in pond C, she will fish however she wants, cause if she believes even she cares about the finish and try not to fish too much, other people will, so her effort won’t help at all. Unfortunately, everybody else thinks the same, so pond C ends up with fish extinction.
So it is clear by now since there is no one owning or protecting pond B. The rational actors might decide to overfish. The result is everybody is going to be worse off since pond B is destroyed.
The fact that public resources are abused is called the tragedy of the commons.
This is a tragedy especially because even Alice wants to protect Pond C. She will soon realized that even I do that, other people will come and destroy the pond, so I have no incentive to hold back.
The most common solution to this is that the govement should claim the ownership of the pond, and then sell permits to people who want to fish in the pond.
By now we can see clearly why regulation is very necessary for many scenarios.