One of the final myths holding us back from a much needed updating of corporate-consumer-growth-capitalism has now been debunked with Professor Elinor Ostrom becoming the first woman to win the Nobel Prize for Economics.
Ostrom’s work won the prize for the way it debunks The Tragedy of the Commons which has long been used as a crucial shibboleth of free-market neoliberal capitalism to insist that there are no alternatives to privatization and markets in generating wealth and human well being.
Her win is all the more notable as many past winners, such as Milton Friedman , have been staunch proponents of free-market neoliberal economics. Ostrom now joins others, such as Amartya Sen and Joseph Stiglitz, in the roll-call of Nobel winners who are calling for a radically updated form of capitalism.
Importantly, Ostrom’s work greatly boosts the legitimacy of the commons as a framework for solving our social and environmental problems. Along with a move to beyond-growth economics, the development of a commons framework which sets resources aside from the short-term interests of both politics and business, is a vital ingredient in solutions to the problems we discuss in Citizen Renaissance. Such a framework has most famously been articulated by Peter Barnes in his book Capitalism 3.0.
Ostrom has tirelessly documented how communities around the world use cooperative behaviour to manage common resources – grazing lands, forests, irrigation waters, soils, fisheries – equitably and sustainably over the long term.
Columbia University Nobel winning Economist Joseph Stiglitz commented, “Conservatives used the Tragedy of the Commons to argue for property rights, and that efficiency was achieved as people were thrown off the commons… What Ostrom has demonstrated is the existence of social control mechanisms that regulate the use of the commons without having to resort to property rights.”
Ostrom says “When local users of a forest have a long-term perspective, they are more likely to monitor each other’s use of the land, developing rules for behaviour. It is an area that standard market theory does not touch. What we have ignored is what citizens can do and the importance of real involvement of the people”.