Monday, June 11, 2012
The Tragedy of the Commons
Outsourcing American jobs to foreign countries is a classic version of The Tragedy of the Commons.
The tragedy of the commons (or tragedy of the unmanaged commons) is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this to happen.
In the case of American outsourcing, it is rational for an individual corporation to send jobs overseas to take advantage of cheap labor. However, in the long run, such a policy will deplete the shared resource (in this case American jobs) and eventually lead to the ruin of America. And the destruction of America is not in the long term interest of any American corporation.
The Great Recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with middle-class families bearing the brunt of the decline.
The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.