Tragedy of the Market
Concept created by Peter Barnes, stressing that the market has no way of curbing its own excesses
"Because of its compulsion to extract maximum short-term rents and externalize costs, market enclosure often results in the “tragedy of the market.” (http://onthecommons.org/content.php?id=1467)
"The real tragedy, many commoners argue, is the tragedy of the market. It is the market, after all, that relentlessly uses up so many of our precious gifts of nature and leaves pollution and waste everywhere, without even providing an accurate economic accounting of the actual costs. The problem with conventional economics is that it too often fails to recognize the value that the commons contribute to market activity. Mainstream economists usually do not identify the hidden market subsidies that come from the commons and the unacknowledged negative economic externalities7 that companies dump into the commons.
Consider, first, the hidden market subsidies. Broadcasters who use the airwaves for free are using a public resource while providing little in return to the citizens who own the airwaves. When governments give timber companies cheap access to public lands, or give drug companies exclusive rights to taxpayer-financed drug research, they are giving those companies a hidden subsidy. When bottled water companies take large quantities of pure water from underground aquifers for free, they are essentially stealing from the commons.
“Economic externalities” are another set of costs that are not borne by buyers and sellers, but instead shifted to the commons. It is typically cheaper for a company to dump pollution into the atmosphere and to dump radioactive wastes in the ground than to clean them up (or “internalize” the costs). These economic externalities are unacknowledged costs of market activity – costs that are typically borne by the commons.
A commons-based economics, then, would take proper account of the full costs of market activity by recognizing its hidden subsidies and unacknowledged (social, environmental and moral) externalities.
To talk about the commons helps us begin to see economic activity in a more holistic way. Just as environmental economists have helped us recognize the fuller context of market activity, the commons can help us recognize the social, environmental and moral factors that quietly subsidize normal market activity. It helps us see the public schools that provide educated workers, the regulations that make markets stable and trustworthy, the gifts of nature that companies regard as free. The commons helps us name these other, non-monetized sources of value – and in so naming them, we can begin to understand them properly and defend them." (http://www.boell.org/downloads/Bollier_Commons.pdf)