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Why the BP Oil Spill Is a Tragedy of the Commons

In 2008, I published an article titled “Why the Wall St Meltdown is a Tragedy of the Commons.” Now in 2010, as oil washes ashore in five states, we are witnessing another great tragedy of the commons, and the similarities are scary. Can we use this crisis to create systems which protect our shared resources in a way that is fair, transparent and profitable for all of us? Here’s why we must try.

Haven’t We Seen This Before?

In the fall of 2008, the founder of AIG said essentially: “I would never have believed it could fail, never in a million years.” Now it’s the oil companies who are saying they never believed this could happen – in fact, they assured the government that the probability for such a disaster was 0%, which is why their budgets for disaster prevention in many years have been exactly zero dollars. Yet it has happened, and is still happening.

And just like the financial industry benefited for years from deregulation and cozy relationships with government agencies before their major meltdown, the top five oil companies generated over $1 trillion in profits in 2009, while the government rubber-stamped safety plans containing references to protecting walruses and contact information for deceased government officials.

When Wall St. melted down I wrote, “while our economy and our population have grown, our planet has not. We are digging up and melting down everything we can get our hands on to feed this enormous economy we have created. And while this has created jobs, and brought millions out of poverty, it has also funneled increasing amounts of wealth into increasingly few hands.”

Fast forward to 2010, and nothing has changed. Our major economic engines still exploit public resources, and risk public safety in the name of private profit. As the familiar story of lax regulation, safety short-cuts, and inept clean-up response unfolds in the Gulf it is clear that the corporate system has failed us once again. As Obama takes to the Oval Office to proclaim that we must wean ourselves off foreign oil, and pundits produce clips of every president since Nixon saying exactly the same thing, it is clear that our political system is also unable to address the enormous challenges we face on energy and the environment.

As I wrote back then:

“The modern capitalist system is the most effective motivator the world has ever seen. It is the most efficient system ever designed for transforming natural resources into goods and shipping them around the world, where they are quickly reduced to waste. It is a cycle of constant demand, and it is incredibly successful. Unfortunately, the more successful a flawed system, the more spectacularly it fails. But whereas the wins of the system were private, the losses are now being made public. Because the economy is a commons, in the end we either all win, or we all lose.”

Wealth and Illth

As oil continued to pour into the Gulf, the BP disaster is a stunning example of how we all lose under our current system when something inevitably goes wrong. And it is also a reminder of how much more there is to lose in the next inevitable disaster. Lives, livelihoods, coastlines, and wildlife are all at stake here. The reality is that our current system produces profits by taking things from nature, but there are two sides of the economic coin: wealth and illth. We all know what wealth is, but what is illth? This is the term economist John Ruskin gave to the negative effects of an economic system; what economists refer to as “negative externalities” – like poverty, pollution, disease and desperation. The concept of externalities is a good reminder that economic systems operate within larger social and ecological systems. The problem is that while the economic profits are private, the social and ecological illth is public.

The question is – what can we do about it? There is an ongoing struggle between political power and corporate power that has gone on for years. It is a cycle in which money leads to political influence; highly-paid lobbyists fight for lax oversight; risky profits are prioritized over safety; and the result is a crash, disaster, or failure. Then the inevitable public outcry spurs outraged politicians to drag recalcitrant CEO’s to Capitol Hill; apologies are accepted, new rules are written, and the cycle quietly starts all over again.

But what if we could design institutions that would protect natural resources from both the fickle winds of politics and the relentless profit motive of corporations? Institutions that would combine the transparent legal structures and revenue-generating potential of business, with the mission of politics to protect the public interest? And beyond that, institutions that could also represent the needs of other species, ecosystems, and future generations? Thankfully, these institutions already exist.

In Part II of this column, we look at how three types of commons are abused under the current system; and the importance of expanding institutions that can protect shared resources while generating shared revenue.

Andy Mannle is a writer and consultant dedicated to exploring sustainable policy, innovations, and solutions. He is the Education Director for West Coast Green, and an adviser to New Leaf America, UrbanGreen, Adam Capital and others.

Andy Mannle
Andy Mannle is a writer and consultant dedicated to exploring sustainable policy, innovations, and solutions. He is the Education Director for West Coast Green, and an adviser to New Leaf America, UrbanGreen, Adam Capital and others.
 
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