The Price of Blurred Borders: A Market-Liberal Critique of China’s 75-Year "Commons"

 

The Price of Blurred Borders: A Market-Liberal Critique of China’s 75-Year "Commons"

From the perspective of a synthesized school of Chicago School pragmatism (Friedman), Misesian praxeology, and Hayekian information theory, the history of the People's Republic of China is not just a series of policy errors—it is a 75-year laboratory proving that without clearly defined, transferable private property rights, "tragedy" is the inevitable default.

The Diagnostic: Why China Collapsed into the Commons

Whether it was the starvation of the Great Leap Forward or the "Cancer Villages" of the 1990s, the root cause was the "Illusion of Ownership."

1. The Calculation Problem (Mises): In the Mao era, by abolishing the market, the state destroyed the price mechanism. Without prices, there was no way to know the true value of grain or steel. The "Commons" was exploited because there was no economic calculation to signal scarcity.

2. The Incentive Gap (Chicago/Friedman): "If everyone owns it, nobody owns it." The 承包 (Contract) system failed environmentally because it decoupled use rights from residual claimancy. Farmers were "renters" of the state. As any Chicago economist knows, a renter has every incentive to extract maximum value today and zero incentive to invest in the soil's health for tomorrow.

3. Fatal Conceit (Hayek): The central planning of urban spaces and the "Bike Sharing" boom failed because planners suffered from the "Fatal Conceit"—the belief that they could manage the "Commons" better than the spontaneous order of the market. The result was massive capital malinvestment (Bicycle Graveyards).

Lessons for Global Economies: Avoiding the Trap

To avoid the Chinese cycle of depletion, other nations must adopt three fundamental pillars:

• Total Privatization of "Residual" Rights: Move beyond "contracts" or "leases." Only when an individual owns the future value of a resource (land, water, or air rights) will they preserve it.

• Pricing the Externalities: Where a "Commons" must exist (like the atmosphere), the Chicago approach suggests market-based pricing (Pigouvian taxes or tradable permits) to internalize costs that are currently being dumped on the public.

• Decentralized Knowledge: Trust the local "man on the spot" (Hayek). Environmental management should not be a top-down decree from a capital city but a result of local owners protecting their own asset values.

 

The Tragedy of the Commons Is Not About Greed — It Is About Bad System Design

Why People Are Good, and Only Bad Measurements Make Them Do Bad Things

When people hear The Tragedy of the Commons, the dominant conclusion is almost automatic:

“People are greedy. If left alone, they will destroy shared resources.”

Dr. Yung-mei Tsai’s classroom simulation is often cited as proof of this belief. Students, acting rationally, over-harvest a shared resource until it collapses. The commons dies. Everyone loses.

But this conclusion is wrong — or at least dangerously incomplete.

The tragedy does not arise from greed.
It arises from how the system is designed, what is measured, and what is rewarded.

When viewed through the lens of the Theory of Constraints (TOC), Tsai’s simulation becomes powerful evidence of a very different truth:

People are fundamentally good. Systems that reward local optimization create destructive behavior.

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What Actually Happens in the Simulation

In the simulation, each participant is allowed to take up to two items from a shared resource pool per round. The pool regenerates based on what remains. Early rounds forbid communication.

Most groups rapidly destroy the resource.

The usual interpretation:

• Students are selfish

• Individuals prioritize themselves

• Cooperation is fragile

But observe more carefully what participants are actually doing.

Each player is:

• Acting rationally

• Responding to uncertainty

• Protecting themselves from loss

• Optimizing according to the rules and incentives provided

This is not moral failure.
This is logical behavior in a poorly designed system.

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The Core Mistake: Confusing Local Success with Global Success

The real problem in the simulation is not human nature — it is local optimization.

Each participant is implicitly measured on:

• “How many items did I collect this round?”

No one is measured on:

• Total system output over time

• Sustainability of the resource

• Collective success

In TOC terms:

• The system has a constraint (the regeneration capacity of the commons)

• The players are not measured on protecting it

• Therefore, they unknowingly destroy it

This is exactly what happens in organizations every day.

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Why This Is Not Greed

Greed implies excess beyond rational need.

But in the simulation:

• Players take more because not taking feels risky

• Players fear others will take instead

• Players respond to a measurement system that rewards immediate extraction

If greed were the cause, communication would not fix the problem.

Yet when communication is allowed:

• Groups quickly self-organize

• Fair rules emerge

• The resource stabilizes

• Everyone earns more over time

Greedy people do not suddenly stop being greedy.

Bad systems do stop producing bad outcomes when redesigned.

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The Role of Measurement: The Real Villain

TOC teaches a simple but uncomfortable truth:

Tell me how you measure me, and I will tell you how I behave.

In the simulation:

• Individuals are rewarded implicitly for short-term extraction

• There is no penalty for system collapse

• There is no metric for long-term throughput

This mirrors real-world KPIs:

• Departmental efficiency

• Individual bonuses

• Utilization rates

• Quarterly targets

Each looks reasonable in isolation.

Together, they destroy the system.

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Global Goal vs. Local KPIs

The tragedy disappears the moment the system is redesigned so that:

• The global goal is explicit

• Individual actions are subordinated to that goal

• The constraint is protected

• Success is measured at the system level

When participants align around:

“Maximize total benefit over time for everyone”

Their behavior changes — without changing who they are.

This is the most important lesson of the simulation.

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People Are Not the Problem

TOC insists on this principle:

Blaming people is lazy thinking. Improve the system.

The tragedy of the commons is not evidence that:

• People are selfish

• Cooperation is unnatural

• Control is required

It is evidence that:

• Poor measurements create destructive incentives

• Local KPIs generate global failure

• Systems shape behavior more powerfully than values

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Why This Matters Beyond the Classroom

Organizations collapse commons every day:

• Sales destroys operations

• Cost cutting destroys throughput

• Efficiency destroys flow

• Bonuses destroy collaboration

Leaders then blame:

• Culture

• Attitude

• Motivation

But the real cause is almost always the same:

We reward local optima and hope for global success.

Hope is not a strategy.

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The Real Lesson of the Tragedy of the Commons

The tragedy is not inevitable.

It is designed.

And anything designed can be redesigned.

When systems:

• Align measurements with the global goal

• Protect the constraint

• Reward collective success

People naturally behave in ways that look cooperative, ethical, and even generous.

Not because they changed —
but because the system finally allowed them to succeed together.

The Uncomfortable Truth: Why Inequality is the Cornerstone of a Truly Fair Society

 

The Uncomfortable Truth: Why Inequality is the Cornerstone of a Truly Fair Society

In our modern discourse, "equality" has become the sacred cow, the unquestioned ideal. We chant its praises, strive for its implementation, and demonize anything that smacks of "inequality." But what if this widespread adoration of equality is fundamentally misguided? What if true fairness, genuine societal flourishing, actually demands inequality, and conversely, a relentless pursuit of sameness leads to a profoundly unfair and stagnant world? Prepare to be uncomfortable, because it's time to challenge the dogma: unequal is fair, and equal is unfair.

Let's strip away the utopian fantasies and look at the raw, undeniable realities of daily life. Consider the classroom. Little Johnny spends hours poring over textbooks, mastering complex equations, and writing insightful essays. Across the aisle, Susie barely cracks a book, preferring social media to quadratic formulas. Come exam day, Johnny aces the test, Susie fails. Is it "fair" to give them both an A? Of course not. Johnny's superior grade is a direct, fair consequence of his superior effort and intellect. To equalize their grades would be a profound injustice to Johnny, devaluing his hard work and rewarding Susie's apathy. This isn't just about grades; it's about the fundamental principle that unequal effort deserves unequal reward.

Extend this to the athletic field. One athlete dedicates years to grueling training, sacrificing personal time, enduring pain, and pushing physical limits. Another dabbles, showing up sporadically, putting in minimal effort. When the former wins the championship, are we to declare it "unfair" because the other didn't win too? The very essence of sport, of competition, is the celebration of unequal performance. The gold medal is earned through superior, unequal dedication and talent. To give everyone a trophy, regardless of their finish, is not fair; it’s a patronizing insult to those who truly excelled, fostering a culture of mediocrity and entitlement.

Now, let’s tackle the elephant in the room: wealth and opportunity. We often hear calls for "equal pay for all," or the redistribution of wealth to achieve "fairness." But consider the entrepreneur who risks their life savings, works 80-hour weeks, endures countless failures, and finally creates a product that employs thousands and improves millions of lives. Is it "fair" to then strip away their disproportionate success and distribute it equally among those who took no risk, offered no innovation, and contributed nothing to that specific venture? Their wealth is a fair reflection of their extraordinary contribution, their unequal vision, and their willingness to bear unequal burdens. To equalize their outcome would be to punish ingenuity and deter future progress.

The pursuit of absolute equality often leads to profound unfairness because it ignores the inherent differences in human beings. We are not interchangeable cogs. We possess unique talents, varying levels of ambition, different capacities for work, and distinct life circumstances. To treat everyone identically, regardless of these critical distinctions, is to treat them unequally in a meaningful sense. Giving a visually impaired student the exact same textbook as a sighted student, without any accommodations, is "equal" but deeply unfair. True fairness, in this context, demands unequal treatment – specialized materials, assistive technology – to create an equitable playing field.

Furthermore, a society obsessed with equal outcomes actively undermines the very incentives that drive progress. Why would anyone strive for excellence, innovate, or take risks if the rewards for groundbreaking achievement are no different from those for bare minimum effort? If the brilliant scientist who cures a disease receives the same compensation and recognition as someone who merely clocks in and out, the motivation to push boundaries evaporates. This isn't about greed; it's about the human psychology of motivation. Rewarding unequal contributions is the engine of a dynamic, improving society.

The "everyone gets a trophy" mentality, while seemingly benign, is a daily example of how the quest for equality can breed unfairness. It teaches children that participation is synonymous with achievement, blurring the lines between effort and outcome. It robs those who truly excel of the unique satisfaction of earned victory and shields those who didn't perform well from the valuable lessons of failure. This false "fairness" ultimately creates a society ill-equipped to face real-world challenges where performance does matter.

In conclusion, the notion that "unequal is fair, and equal is unfair" forces us to confront uncomfortable truths about human nature and societal dynamics. A truly fair society is not one where everyone has the same outcome, but one where individuals are free to pursue their potential, where effort and talent are acknowledged and rewarded disproportionately, and where differences are not merely tolerated but leveraged for collective advancement. To demand equality of outcome is to demand a static, uninspired, and ultimately unjust society that punishes excellence and rewards mediocrity. Let us embrace the productive, dynamic inequalities that drive us forward, for in them lies the truest form of societal fairness.