Picture the Soviet Union. The Soviet Union was a place where all of the land was public land and all of the food was public food. Because there were no incentives, the people were unwilling to take care of their resources. The land that was used for foresting was not reseeded because there were no incentives to do that. After all, the foresters would not be paid any more than if they reseeded then if they didn’t. This became known as the Tragedy of the Commons.
This tragedy was not peculiar to the Soviet Union. In the Middle Ages when there was a common pasture, the town people often would not take care of it because it was public and they had no incentive to keep the pasture well attended. They would much rather turn their sheep loose on the public ground and keep their own pasture well tended. This Tragedy of the Commons is not peculiar to the economic field either. That’s why the only species that are rare are not privately owned. After all, Chick-fil-a does not want the chicken to go extinct and Burgerville doesn’t want the cow to go extinct.
This principle has several important consequences, like in Britain or Canada, where health care is public and there are extremely long waiting periods for people. After all, when healthcare is subsidized people will go to the hospital for things like a minor rash, whereas if they had to pay the full price, they would not go to the hospital and the hospitals would not be overloaded.
Another consequence of this principle is in the U.S. where we have our public national lands. Sure, the government does a fairly good job keeping out poachers, but this is an example of the broken window fallacy. We will only see the side of the government and we won’t see what the free market could do to improve it. Don’t get me wrong, I love the national parks. I spent 12 days hiking around Mount Rainer last year, but I don’t think that the government can do things better than private individuals/companies, and because of that, I would lean towards the national parks being privatized.
I hope you enjoyed reading this post as much as I enjoyed writing it. As always if you have any questions or even disagreement please comment below.