A Commons Model of Social Common Capital

INTRODUCTION The natural environment comprises an important component of social common capital. It is generally held as common property resources and is managed as the commons either by local communities or the state authorities. The atmospheric environment, for example, as the largest commons, is to be managed by all nations in the world. The natural environment is in principle not privately appropriated to individual members of the society or transacted through market institutions. In Chapter 1, we formulated simple dynamic models of the fisheries, forestry, and agricultural commons to examine critically the theme of the tragedy of the commons, originally put forward by Hardin (1968). However, the analysis was primarily confined to the cases in which the commons are evaluated in terms of the pecuniary gains accrued to the members of the communities that communally own or control the commons, where the role of the commons as social common capital has been only tangentially noted. When the natural environment is regarded as social common capital, there are two crucial properties that must be explicitly incorporated in any dynamic model. The first property concerns the externalities, both static and dynamic, with respect to the use of the natural environment as a factor of production. The second property concerns the role of the natural environment as an important component of the living environment, significantly affecting the quality of human life.