Revisiting the Tragedy of the Commons
Most Americans have a deeply ingrained ability to doublethink. We routinely believe in diametrically opposed concepts, and casually — or causally — forget one or the other, depending on which suits our current situation the best. We espouse peace, yet are perpetually at war; we talk about equality, yet continually try to disenfranchise; we claim to be the land of opportunity, yet access is increasingly concentrated. None of these are particularly fatal in a political sense: we all have a different vision on where the country should go and every-so-often we go to the ballot box to express our opinions. We make choices — good or bad — and we live with the consequences.
So, what happens when we apply that cognitive dissonance to apolitical situations? What happens if there’s no direct consequences?
If a company underpays — or overexploits — its labor, the company is not the one who picks up the tab on food stamps or subsidized housing. Or when it knowingly sells self-destructing products. Or when it abandons tens of billions of ‘guaranteed’ pension funds. The list could go on ad nauseum, yet none of these companies were doing anything other than what they were designed to do — aggregate money into the pockets of the shareholders.
This asymmetrical risk behavior — known as moral hazard — is well known to shareholders; they go to great lengths to minimize the impact on themselves. But as citizens, it’s rarely top of mind, which is unfortunate… for both the public at large, and eventually for the aforementioned shareholders. The commons will soon be so damaged that it is worthless.
E pluribus unum wasn’t about wealth transfer.
So how do we avoid this dystopian fate? The first logical step would be to expand who has access to the business ballot box — a framework that was originally put forth a quarter-century ago. And though there has been a spirited debate over who qualifies as a ‘stakeholder,’ it’s not too much of a mental leap to suggest that those who have to bear the burdens of economic externalities should get a vote.
Don’t want every John and Jane Doe having a say over how to run your business? Then maybe pumping the local river so full of noxious chemicals that it spontaneously combusts is not a solid business plan. The most egregious and conspicuous are no-brainers, but what about when it’s a bit more subtle?
In its early years, this company effectively transferred a bunch of expense to the USPS, but it is all of us who foot the bill. Every taxpayer should get a check for a few hundred dollars — and a chance to attend the Oscars — for subsidizing that business model by proxy. And if they had voting rights, maybe they would.
Businesses can — and should — be profitable, but they also need to be accountable to more than just their owners. Because when left to their own devices, they’ve repeatedly proven that they’re unwilling or unable avoid a myopic self-interest. It’s unsurprising that the younger generations are cooling on Capitalism — they’re tired of getting screwed. So, unless a company wants to be on the business-end of a Bolshevik beatdown, they need to reevaluate how they turn a profit.
Corporation, noun: An ingenious device for obtaining individual profit without individual responsibility.
— Ambrose Bierce, The Devil’s Dictionary
