by Robert Bloomfield

Last week on Connecting the Dots, I argued against simple claims in policy debates. I closed the segment by saying:

“I don’t believe people when they tell me that a new regulation will improve our lives, and I don’t believe people when they tell me that getting rid of an old regulation will improve our lives. At least, I don’t believe them if their arguments are simple. I want their arguments to be messy, complicated and uncertain. Because in the end, those are the arguments that are going to be least wrong.”

Well, I am glad to report that the committee that awards the Nobel Prize in Economics listened to my commentary, selecting Elinor Ostrom as one of this year’s winners. Elinor has consistently argued against simple solutions to one of the most fundamental problems in economics: the tragedy of the commons. The committee obviously follows Metanomics closely, because Ms. Ostrom’s work has important applications to virtual communities, which have been our focus all season. In fact, her book “Governing the Commons: the evolution of institutions for collective action” should be required reading for anyone interested in virtual communities.

These days, overfishing is one of the most obvious manifestations of the tragedy of the commons. A fishing ground can support only a limited catch; catch more and the fish can’t repopulate for the next year. But each individual fisherman has an incentive to catch as much as he can, crashing the fish population and making everyone worse off.

Libertarians argue for one simple fix: avoid the tragedy of the commons by having the ocean be private property, and whoever owns it has an incentive to maintain a sustainable harvest. Liberals argue for another simple fix: for government to establish laws that restrict the freedom to fish. But these simple solutions are often impossible.

Ostrom argues for complexity. She writes:

“Instead of there being a single solution to a single problem, I argue that many solutions exist to cope with many different problems. Instead of presuming that optimal institutional solution can be designed easily and imposed at low cost by external authorities, I argue that getting the institutions right is a difficult, time-consuming, conflict-invoking process.”

Ostrom’s work is also a time-consuming process, as she has documented in great detail how communities have developed their own complicated institutions to manage common resources, sometimes successfully, sometimes not.

Ostrom learned that success requires a number of conditions, spelled out in a paper published by Science magazine: The community needs to be able to monitor people’s use of the common resource, and have broad support for enforcing its rules. The community also needs a high level of trust and communication, and as part of that, it needs to be able to limit entry. If new people come into the community to quickly, the loss of social cohesion, and the additional pressure on the resource, make it hard to maintain effective rules protecting the resource:

Effective commons governance is easier to achieve when (i) the resources and use of the resources by humans can be monitored, and the information can be verified and understood at relatively low cost (e.g., trees are easier to monitor than fish, and lakes are easier to monitor than rivers) (29); (ii) rates of change in resources, resource-user populations, technology, and economic and social conditions are moderate (30–32); (iii) communities maintain frequent face-to-face communication and dense social networks—sometimes called social capital— that increase the potential for trust, allow people to express and see emotional reactions to distrust, and lower the cost of monitoring behavior and inducing rule compliance (33–36); (iv) outsiders can be excluded at relatively low cost from using the resource (new entrants add to the harvesting pressure and typically lack understanding of the rules); and (v) users support effective monitoring and rule enforcement (37–39).

To see why this is so important to virtual communities, let’s look at one of their most important common resources: attention. Everyone who posts a comment, chats during an event like Metanomics, updates their Facebook page, sends out Twitters and Plurks, writes a blog post, or hosts a talk show is fishing for attention. I don’t want that to sound like a bad thing. Drawing attention to issues of interest to the community is a public service, whether it’s to educate, to entertain or simply to forge stronger social bonds.

But just like fishing for food, there are individual benefits to fishing for attention. To see the dire outcome that results when every starts overfishing for attention, just look at the state of cable news in the United States. The easy ways to get attention are to sensationalize scandals and disputes, which is made all the easier by partisans who are willing to say and do anything to make their side look good and the other side evil incarnate.

An extreme example of this is Bob Frank’s appearance on Fox News, in which interviewer Stuart Varney feigns outrage to Bob’s unremarkable claim that luck is an important element of success, insults Bob in an attempt to create a sensational response (he fails), and is so uninterested in thoughtful discussion that claims that luck had nothing to do with his own success, while simultaneously emphasizing the risk that with all his hard work, he still might not have gotten a job as hosting a business talk show on a high-profile cable. (That is, he was lucky).

Now, we all have reasons to feel quite pleased with the level of discourse we see in the Second Life business and educational community—not just Metanomics, but other business groups like ThinkBalm, and educational groups like ISTE. You don’t see much in the way of overfishing through sensationalism or partisanship. Comments on Dusan Writer’s blog are generally thoughtful and sincere, as is the chat during Metanomics broadcasts.

Why is that? Well, I think Elinor Ostrom is onto something, because the conditions for successfully maintaining a common resource are all here. We have relatively stable community with strong social ties, overfishing for attention is easily monitored, and for the most part we support policies that discourage the kinds of snark, cynicism and extremism that make thoughtful discourse difficult in many of the largest virtual communities.

So what can virtual communities learn from this new Nobel laureate? Foremost, that growth in virtual communities is a tricky matter. Wagner James Au has a post on his blog, New World Notes, explaining that mainstream adoption is a cure to most of Second Life’s problems. Sure, we would love to see our community grow, and there would doubtless be many benefits. But if we grow too quickly, we risk losing the social cohesion and the norms to maintain our many common resources. We can handle growth either by devising new ways to manage our community and its conversations, or find ways to divide into smaller and more manageable sub-communities. Either way, when I compare the level of discourse in Second Life with what I see on cable news and talk radio, I look at growth with mixed feelings, and am thankful that Elinor Ostrom has helped me understand why that is.