Tragedy of the Commons
When everyone maximises individual benefit, the system collapses for all.
In 1833, economist William Forster Lloyd observed something both simple and tragic. When multiple herders share a common pasture, each acting in their own self-interest by adding more animals, the shared resource inevitably degrades: Tragedy of the Commons. This idea was later immortalised by ecologist Garrett Hardin in 1968 as the Tragedy of the Commons.
At its core, this mental model reveals a haunting systemic insight:
When resources are finite but access is unregulated, individuals acting rationally in their own short-term interest can destroy long-term collective value.
📉 Strategic Breakdown
In strategic thinking, the Tragedy of the Commons is a warning against unchecked resource use, misaligned incentives, and leadership that ignores systemic constraints. It manifests across disciplines:
- Economics – Overfishing, overgrazing, and pollution.
- Digital Platforms – Spam, fake reviews, and algorithm gaming.
- Organisations – Overloading key personnel or systems to hit KPIs.
- Climate & Energy – Shared atmosphere, finite fossil reserves, and the unchecked emission race.
When individuals or entities are not held accountable for the cost they impose on shared systems, the incentive to overuse becomes irresistible—and eventually fatal to the commons.
🧠The Systemic Insight
This isn’t just a problem of greed—it’s a systems problem. It arises when:
- Feedback loops are too delayed to trigger corrective behavior.
- Ownership is diffuse or ambiguous.
- Short-term gains are privatized, while long-term costs are socialised.
- There is no credible enforcement or governance structure to align individual actions with collective outcomes.
Left unaddressed, even well-meaning actors can slowly (and unknowingly) undermine the very system that sustains them.
🔄 From Collapse to Coordination
Strategic leaders must recognize the signals of impending tragedy. This includes:
- Overconsumption of finite resources
- Growing externalities ignored in cost-benefit analyses
- Disincentives for cooperation
- Lack of custodianship or regulation
The antidote lies in strategic stewardship:
- Designing governance models (rules, monitoring, enforcement) that internalise externalities.
- Creating shared value frameworks where long-term incentives are realigned.
- Allocating responsibility and ownership to ensure someone is always accountable for the commons.
🧩 Application in Business & Policy
For executives, this model reminds us that scalability must be matched with sustainability. Consider:
- Are your top performers burning out because their “commons” (time, attention) is overgrazed by the system?
- Is your company’s reputation suffering because the “commons” of customer trust is being eroded by short-term sales tactics?
- Are your project teams overloading shared digital infrastructure or systems without coordinated planning?
Strategic foresight asks: What are we consuming faster than we are regenerating? And: What shared system, if mismanaged, risks collapse for all participants?
🧠Final Thought
The Tragedy of the Commons is not inevitable—but it is predictable.
Leaders with a systems mindset can shift the trajectory. They understand that value doesn’t come from exploiting the commons—but from safeguarding and regenerating it.
We don’t just lead for the next quarter. We lead so there is a next quarter—for everyone.
Missed out on the over all series?
Murray Slatter
Strategy, Growth, and Transformation Consultant: Book time to meet with me here!
