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Resource Sharing – Grounding the 21st Century Economy

photo of Paul Hartzog

Paul Hartzog
27th February 2012



Title: Resource Sharing – Grounding the 21st Century Economy
Authors: Paul B. Hartzog, Sam Rose, Richard C. Adler
License: Creative Commons Attribution Share-Alike
Ref: FF-2010-2-1

Introduction

 

Twenty-first century wealth-generating ecologies need to remain robust and flexible in order to allocate resources quickly and efficiently, and to mitigate the effects of constant fluctuations and redistributions. Nobel Prize recipient Elinor Ostrom’s work on “commons” provides vital thinking towards a solution: peer governance and information transparency.

This overview attempts to provide the following:

  1. a brief summary of the requisite theoretical framework on the production of “commons”
  2. an example implementing the theory in a technological deployment

 

Taken together, it is the authors’ hope that this document can be a springboard for interested practitioners in the world.

Theory

 

There is a considerable and growing body of work devoted to understanding shared resources, or “commons.”

When open-access resources are depletable, then they have a unique dynamic, traditionally known as the “Tragedy of the Commons.” First articulated by Garrett Hardin in the 1960s it states, in essence, that when the rate of resource use exceeds the rate of resource production the system is said to be “unsustainable.”

Elinor Ostrom, winner of a 2009 Nobel Prize in Economics, has spent her life showing how commons can be managed sustainably. She notes that

“All efforts to organize collective action, whether by an external ruler, an entrepreneur, or a set of principals who wish to gain collective benefits, must address a common set of problems. These have to do with coping with free-riding, solving commitment problems, arranging for the supply of new institutions, and monitoring individual compliance with sets of rules.”

In addition, Ostrom noted that there are two co-existing dilemmas that require management:

  • the interaction of participants with the resource
  • the interactions of participants with each other

Consequently, her solution to creating sustainably managed commons are

“self-governed common-property arrangement[s] in which the rules have been devised and modified by the participants themselves and also are monitored and enforced by them.” (Ostrom, 1990, p. 20).

Ostrom arrives at the following design principles:

  1. Group boundaries are clearly defined.
  2. Rules governing the use of collective goods are well matched to local needs and conditions.
  3. Most individuals affected by these rules can participate in modifying the rules.
  4. The rights of community members to devise their own rules is respected by external authorities.
  5. A system for monitoring member’s behavior exists; the community members themselves undertake this monitoring.
  6. A graduated system of sanctions is used.
  7. Community members have access to low-cost conflict resolution mechanisms.

(For more information on Elinor Ostrom and Commons see Paul Hartzog’s Stanford Lecture)

The absolutely essential understanding to be absorbed here is that commons management is not primarily a technical problem but a social one and that the key ingredient in the solution is information transparency. Therefore, implementation requires a thorough grounding in both social dilemmas (Kollock) as well as technology design.

Implementation

 

A system to effectively deploy and manage resource sharing must make visible the two kinds of interactions above:

  • interactions of participants with resources
  • interactions of participants with each other

However, when deploying socio-technical infrastructure, there is also a third component:

  • interaction of participants with the infrastructure itself

An example might look something like this (with additional details available by clicking deeper into any given category):

Member Participation Ratios History
Member 1 Money: 
Time: 
Money: 0.226677
Time: 40
2 yrs
Member 2 Money: 
Time: 
Money: 0.226677
Time: 40
1 yr

 

Similar to natural ecologies, interaction levels and resource renewal rates will vary across time as well as space. For these reasons, history must also be made visible in the implementation.

Also (and not shown in the example above), the system needs to manage visibility to whom such that interactions can be seen by:

  • the participants themselves: for self-monitoring and self-adjustment
  • other participants: for community monitoring and sanctions

It is a design choice whether to rely on the community to manage their interactions, or to build the checks and balances into the software. For example, the popular file-sharing application BitTorrent provides a “share ratio” that is visible to users, as well as prioritization and bandwidth rules built right into the software itself (Legout, et al).

Either way, a well-functioning community and it’s tools, need to address all three of the interactions above with information transparency. These layers of transparency not only make possible the management of the resources and participants but can also provide for the infrastructure that supports the resource management. A similar approach to self-organizing self-sustaining public resources has recently been dubbed “Public Open Source Services” (POSS).

Conclusion:

 

Twenty-first century wealth-generating ecologies need to remain robust and flexible in order to allocate resources quickly and efficiently, and to mitigate the effects of constant fluctuations and redistributions. Nobel Prize recipient Elinor Ostrom’s work on “commons” provides vital thinking towards a solution: peer governance and information transparency.

Notes:

Kollock, Peter. “Social dilemmas: The anatomy of cooperation,” Annual Review of Sociology 24, 1998. pp. 183-214. ( www.cooperationcommons.com/node/390 )

Ostrom, Elinor. “Governing the Commons: The Evolution of Institutions for Collective Action” (Cambridge: Cambridge University Press, 1990). ( www.cooperationcommons.com/node/361 )

Legout, Arnaud, G. Urvoy-Keller, and P. Michiardi. “Rarest first and choke algorithms are enough.” In Proceedings of the 6th ACM SIGCOMM conference on Internet measurement, 203-216. Rio de Janeriro, Brazil: ACM, 2006. ( portal.acm.org/citation.cfm?id=1177106 )

 

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