Tragedy of the commons in the context of "Market mechanism"

In economics, excludability is the degree to which a good, service or resource can be limited to only paying customers, or conversely, the degree to which a supplier, producer or other managing body (e.g. a government) can prevent consumption of a good. In economics, a good, service or resource is broadly assigned two fundamental characteristics; a degree of excludability and a degree of rivalry.

Excludability was originally proposed in 1954 by American economist Paul Samuelson where he formalised the concept now known as public goods, i.e. goods that are both non-rivalrous and non-excludable. Samuelson additionally highlighted the market failure of the free-rider problem that can occur with non-excludable goods. Samuelson's theory of good classification was then further expanded upon by Richard Musgrave in 1959, Garrett Hardin in 1968 who expanded upon another key market inefficiency of non-excludable goods; the tragedy of the commons.

Groundwater-related subsidence is the subsidence (or the sinking) of land resulting from unsustainable groundwater extraction. It is a growing problem in the developing world as cities increase in population and water use, without adequate pumping regulation and enforcement. One estimate has 80% of serious U.S. land subsidence problems associated with the excessive extraction of groundwater.

Groundwater can be considered one of the last free resources, as anyone who can afford to drill can usually draw up merely according to their ability to pump (depending on local regulations). However, pumping-induced draw down causes a depression of the groundwater surface around the production well. This can ultimately affect a large region by making it more difficult and expensive to pump the deeper water. Thus, the extraction of groundwater becomes a tragedy of the commons, with resulting economic externalities.

Garrett James Hardin (April 21, 1915 – September 14, 2003) was an American ecologist and microbiologist. He focused his career on the issue of human overpopulation, and is best known for his exposition of the tragedy of the commons in a 1968 paper of the same title in Science, which called attention to "the damage that innocent actions by individuals can inflict on the environment". He is also known for Hardin's First Law of Human Ecology: "We can never do merely one thing. Any intrusion into nature has numerous effects, many of which are unpredictable."

Hardin held hardline anti-immigrant positions as well as positions on race and eugenics that have led multiple sources to label him a white nationalist. The Southern Poverty Law Center described his publications as "frank in their racism and quasi-fascist ethnonationalism".