Free rider problem and the economy of abundance versus economy of scarcity
I’m a fan of this research of the “enterprises of the commons” and would like to contribute to the discussion with my 2 cents on the free rider problem and the economy of abundance versus Economy of Scarcity.
Free rider refers to not paying the bill—which travels for free. A train is commonly used to illustrate this practice. Some passengers traveling without paying the bill may not jeopardize the viability of the service, but if all decided to stop paying for the passenger train, if would be unworkable. We must find a formula—based on the costs relating to not take note—that free rider makes it very expensive and (in the cost-benefit analysis of each) most choose to pay the ticket.
Free rider becomes a problem when the number of people who fail to pay (i.e., assume some of the costs) is such that the activity is not feasible and the resource is (over) exploited so that regeneration cannot be ensured.
I recommend the Wikipedia entry in Castilian (http://es.wikipedia.org/wiki/Free_rider) and even better in English (http://en.wikipedia.org/wiki/Free-rider). These have some very good entries on free rider.
Going into this question, the question of free rider does not seem so interesting from the point of altruistic versus selfish individual (i.e., between the person who values not his own benefit but the benefit of others as a whole). I appreciate this, but I find that interesting work has been done in this line in the tradition of economic experiments on human behavior. Are we are selfish in nature or not?. When I address this question, independently if it is the case or not, I tent to conclude thinking how important is education. Yochai Benkler, in his last book (The Penguin and the Leviathan: How Cooperation over Self-Interest Triumphs), argues that we are cooperative.
I find the question of free rider most interesting from the standpoint of organizational forms/relational (not to focus on the individual’s decision but in the design scheme by which we relate). They try to find a sustainable model of the costs of the activity that does not fall into the free rider problem (when this becomes a problem, that is, when so many people are not paying their bill that the activity is not feasible). Can a way be designed that makes it preferable for most of the participants to follow the rules for assumption of costs and thus not enter the over-exploitation of the resource? This “institutional design” group that makes the common resource sustainable is what Ostrom called the governance of common resource.
Ostrom’s criticism of Hardin is based on analyzing cases that were not common resources, in the sense that resources were not under an institutional design as sharing?in other words, ungoverned. In the examples presented, Hardin had a tragedy in the sense of showing that there is no way that a group can find a successful formula to share resources without exploitation. Hardin’s examples were based on no man’s land, not land in the community, to share design in a way that allows for a non-overexploited, shared governance model. This did not necessarily fail, but in the examples, Hardin was actually nonexistent.
But going to the theme of the post…The question of free rider on economies of “scarcity” versus economies of “abundance.” I think the “ambivalence” to the post referred to is situated where the critical aspects of the activity must be guaranteed for its sustainability. In both, there is no “ambivalence,” or not one can speak of concerning free rider (in the sense of the individual and institutional design which is referred to above), or in both the free rider on the points in the system cannot become a problem. From my point of view, free rider applies to economy “scarcity” (the “old” economy) and economy of “abundance” (the new knowledge economy); it’s only changes are that the critical points of each of these economies are at different locations and are covered differently. Critical points and risks of scarcity and overexploitation are on both but in different ways. The need to find models of sustainability (institutional designs) and to encourage standards and incentives that lead to altruism is in both economies. For instance, the economy of the wealth of knowledge scarcity is attention and was more related to publication or distribution costs. The fact that Internet distribution is “free” is not confused with the free rider problem; the distribution is free but at the cost of attention resources, such as advertising. The comedy of the free rider of Carol Rose referred to areas that were previously critical for free rider (meaning that there was a problem if not many people contributed) that in the new economy knowledge (particularly in the digital commons) ceases to be a critical point that people consume them without contributing (Rose, CM (1994). The comedy of the commons: Commerce, custom and inherently public property. In: CM Rose (Ed.), Property and Persuasion: Essays on the history , Theory and Rhetoric of ownership (pp. 105-162), Boulder, CO, Westview Press). Because in fact only consuming and contribute (in this article argument more extensively the issue of free riders in the digital commons – Fuster Morell, M. (2010). Participation in Online Creation Communities: Participation Ecosystemic?. Proceedings The politics of open source. Journal of Information Technology & Politics (JITP). 6 & 7 May 2010. University of Massachusetts Amherst. http://scholarworks.umass.edu/jitpc2010/1/). But areas that were once critical of the free rider cease to be in the new economy or the digital commons does not mean they do not have other issues if they are critical of free rider problems.
Finally, what I like about the business research of the commons is that it precisely foregrounds one of the “critics” of the new knowledge economy, which is one aspect that has received little attention and can actually be highly problematic as the key to the survival of commons. The relationship between “companies” (able to translate sustainability value generated individually and/or monetary value, among many others) and commons (communities that share resources) explores what designs institutional/relational lead to the commons that companies not jeopardize the sustainability of the resource and the cooperation of the community as a whole but rather enrich it.