27 March 2009

Commons and composition

The tragedy of the commons comes from hoarding the extractive resources rather than renewing their fertility; the paradox of composition comes from hoarding the money rather than circulating it. The commons problem comes from failure of clear property rights to the resources' fertility; the composition problem comes from risk of default.

The tragedy of the commons is analogous in the real economy to whatthe paradox of composition signifies in the money economy.When people do not hoard what they need to pass on, we call it tradition. Tradition cures both the tragedy of the commons as well as the paradox of composition.

No comments:

Post a Comment