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A twist on the tragedy of the commons

James Rummel of Chicagoboyz posted this sad but telling photo essay about what happened when a hobo moved into a shed next to a restaurant that had closed down.

Strictly speaking, I wouldn’t call this a tragedy of the commons, more a tragedy of the consequence of poorly enforced property rights. The events James Rummel describes could just as easily happen here; the recent changes in the law that made squatting in residential properties a criminal offence do not apply to commercial buildings. Of course squatters can be evicted by civil proceedings as before, but it is not an easy process.

I would guess that the sympathies of most Samizdata readers will be with the property owner – and so they should be. To be stuck with a deteriorating building that is costing you money every day that goes by is no joke. Quite soon, I would guess, a point of no return is passed beyond which it becomes uneconomical to even try to make the building attractive to a potential buyer or tenant, particularly if, as in this case, someone is actively subverting any attempt to do that. To rub salt in the wound, you can bet that all your nice well-meaning neighbours are tut-tutting at what a heartless slum landlord you are, leaving that fine building to decay. Large numbers of people apparently do believe that landlords let buildings decay for the fun of it. Here are some of them, in the comments to another Guardian article by the same Ally Fogg whose article about the man arrested for burning a poppy I was praising the other day.

However sympathy need not be a zero sum game. Sympathy for the landlord should not preclude sympathy for the homeless man. Many factors can make a man or woman homeless; drink, drugs, unemployment and shattered relationships among them. It is also possible, or even probable, that the hobo’s plight, as much as the landlord’s, was ultimately caused by official contempt for property rights. Henry Hazlitt’s “Economics in One Lesson” is more than half a century old now, but the lesson still hasn’t been learned.

It may reach a point where many landlords not only cease to make any profit but are faced with mounting and compulsory losses. They may find that they cannot even give their property away. They may actually abandon their property and disappear, so they cannot be held liable for taxes. When owners cease supplying heat and other basic services, the tenants are compelled to abandon their apartments. Wider and wider neighborhoods are reduced to slums. In recent years, in New York City, it has become a common sight to see whole blocks of abandoned apartments, with windows broken, or boarded up to prevent further havoc by vandals. Arson becomes more frequent, and the owners are suspected.

That passage was describing the effect of rent controls. Other restrictions on the property rights of landlords, such as ever-stricter demands as to maintenance and compulsory inspections, making it extremely difficult to evict a non-paying tenant, or forbidding tenancies with short notice periods even by mutual agreement, work a little more slowly but get to the same sorry result in the end. When the government penalises landlords it also penalises tenants and those who would like to be tenants but cannot find a place to rent.

2 comments to A twist on the tragedy of the commons

  • Ben

    The very first sentence is truly astounding, in the unintentional insight it offers into the problems facing physical sciences today.

    “””
    Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine-the special pleading of selfish interests.
    “””

    The political implications of climate change theory have corrupted what should be an empirical, physical science, and arguably a similar situation exists with medical trials. So sadly the insight of the first part into the malign influence of political intervention now applies to the second part also.

  • Ben, thanks for your comment, with which I agree. I hope you will forgive me clarifying one point for the benefit of readers: the words you quote –

    “Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine-the special pleading of selfish interests”

    - are the opening sentences of Henry Hazlitt’s fine book Economics in One Lesson.

    For a moment, until my memory of that book cut in, I was trying to fit what you said to either the first sentence of my post or James Rummel’s.