Buying at the Point of Maximum Pessimism: Six Value Investing Trends from China to Oil to Agriculture

Chapter 9. An All-Too-Common Tragedy

In his 1968 essay “The Tragedy of the Commons,” published in Science magazine, biology professor Garrett Hardin reintroduced an economic phenomenon that has prevailed among mankind probably since the first herders roamed the land with their flocks. In 1832, the topic was formally introduced by Oxford economist William Forster Lloyd. In Two Lectures on the Checks to Population, he discussed an economic paradigm that has puzzled centuries of observers: how to solve the problem of eventual destruction that nearly always confronts commonly held resources. This dilemma still exists today and can present potential opportunities for investors who identify their solutions.

The tragedy of the commons comes from a ...