Tragedy of The Commons

First, let me describe The Tragedy of the Commons. The phrase was coined describing cow farmers. See, cow farmers had two choices of where they could have their cows graze: their own fields or the common field. Of course, all the farmers brought their cows to the common field until it was completely destroyed. In truth, if they had all regulated their use of the common field and balanced between their own fields and the common field better ALL the cows would have been better fed. However, if they all agreed to regulate their use of the common field, the incentive to cheat on the agreement. It’s an infinitely repeated Prisoner’s Dilemma.

The same thing is happening now with fishing on the High Seas. Every fishing boat wants to catch as many fish as possible, because it won’t affect the quantity of fish supplied enough to affect the price. However, since every boat does it, quantity supplied does change, and price drops. Compound that with the fact that overfishing causes it to  take longer for the fish populations to replenish, so fishing boats need to go further and further out for longer and longer to get the same catch (I think this is what The Perfect Storm was about? I never saw it). If they would all catch fewer fish ALL of them would be better off, but since they all catch as many as possible, the price they get goes down and their costs go up. Competition vs. Collusion in a prisoner’s dilemma, competition leads to the tragedy of the commons.

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Now, let’s talk about college. College education clearly increases social awareness and overall well-being of society. Thus, the government subsidizes college education (for example: I pay $10G for a $40G education, thankyou to the State of Michigan for naively believing that I’m actually going to stick around and use my education to better the economy of Michigan). Since college has gotten cheaper, more people are going and increasing the supply of educated labor. Since supply is increasing, price (wages) of educated labor drops. Simultaneously, the increase in supply of educated labor has made it possible to require a college education, and so demand for educated labor rises, increasing wages, but not enough to offset aforementioned decrease. Since demand for educated labor rises, demand for uneducated labor must fall, lowering those wages and creating more incentive for student to go to college, students who would not (and probably should not) have otherwise gone (read: “I’m here to party” or “I’m here because my parents made me). As more people go to college, the value of the education decreases (decreasing marginal returns on government investment), but it still becomes more and more mandatory (not unlike high school).