A popular poster depicts four cows standing in the corners of their respective fields at the intersection of two barbed wire fences. Each of the four cows has stretched her neck through the wires to reach the grass in another cow’s field. The poster invokes a humorous reaction from most observers. To most it would illustrate the phrase that “the grass is always greener on the other side,” or maybe how silly we all are pursuing distant pleasures when there is an abundance available to us where we are.
But the poster actually illustrates rational behavior and the importance of property rights in preserving resources! The rational behavior of the cows is that each is attempting to maximize its access to grass. The remaining non-fence line grass in each cow’s field is readily available to her since she is in that field and the other cows are fenced out.
But the grass on the perimeter of her field along the fence line is within reach of the adjoining cows. Therefore, each cow is faced with first eating the grass along the fence line or missing out on the same if the other cows get there first. The grass along the fence line is therefore effectively common property and such resulting behavior is often referred to as the tragedy of the commons.1
Unowned or collectively owned resources tend to be consumed and not conserved because no one has the right to the long-term value of that good—that is, no one has a property right in that good. It is in the self-interest of each cow (or person) to get what they can before it is gone. The cows are merely responding to the institutional setting in which they find themselves. If we want people or cows to do X we would be well advised to make it in their self-interest to do X. If the fences were so constructed to protect each cow from the incursion of the other there would be no rush to consume grass along the fence line. Under this alternate arrangement resources could be conserved since ownership is secured—that is, each would enjoy a property right in the good.
