The economic phenomenon known as the
"Tragedy of the Commons" instructs us that commonly held resources
that are insufficiently protected will be plundered to extinction. The phenomenon
was recognized in the early nineteenth century to explain why the commons in
England quickly came to be denuded by sheep. All sheepherders had an equal
right to graze sheep on the commons. There often was no agreement as to how
many sheep each could graze, so it was sheer rational self-interest for each to
graze as many sheep on the common ground as possible. In short order the commons
came to be overgrazed. What later came to be called "the tragedy of the
commons" was a simple and imminently understandable explanation.
Is security an economic resource?
One can easily accept that grassland is
an economic resource that must be protected, but what about security and, if
security is held collectively, can collective security agreements also be
vulnerable to the tragedy of the commons? Security is a service that usually
requires economic resources. We secure our personal possessions when we take
precautions such as padlocking our bicycles, locking our car doors and the
house, buying monitored security systems, purchasing heavy safes, and the like.
These are all economic goods to secure our personal property. But what about protecting
our physical selves? It is on a somewhat different plane but the purpose is the
same. We may carry concealed weapons, take personal self-defense courses, or
hire personal body guards. All these things require the expenditure of time and
money to acquire economic goods to make us more secure. On a more subtle level,
we modify our behavior to avoid giving offense to complete strangers about whom
we know nothing. We especially do not deliberately seek confrontations over
minor things like the last parking spot in the lot. Similarly we avoid
dangerous parts of town or parts of town that are dangerous at night or on
special occasions. For example, my wife and I were in downtown Chicago in the
late 1990's when the Chicago Bulls professional basketball team was winning the
NBA championship. We were not fans and gave little thought to the fact that
there might be what we shall call "excessive celebrations" after the
final victory. As we strolled downtown Chicago after dinner we were advised by
a Chicago policeman to leave, because the "excessive celebrations"
often became excuses for certain people to behave criminally. Rather than
assert our right to window shop whenever and wherever we darned-well pleased
and discretion being the better part of valor, we went home. This aspect of
security--i.e., avoiding unnecessary confrontation-- is often overlooked.
Collective security brings in economic
problems
Ah, but would we have reacted the same
way had we been in a group? Perhaps we would have felt more secure to window
shop by assuming that others in the group would protect us. Our behavior would
have changed to become a bit more willing to take risk due to an implicit assumption
of collective security. This willingness to take more risk because others may
bear some or even all of the cost is known as moral hazard.
So we see that providing our own
personal security of our physical bodies and our possessions requires that we
expend resources that perhaps we would rather employ elsewhere. We pay for
these ourselves and we modify our behavior to avoid the necessity of employing
them with uncertain result and to minimize the cost.
But all this changes under collective
security agreements.
Moral hazard and socialism cause a tragedy
of the commons in collective security
Under a collective security agreement,
all who join are obligated to provide security to all others in the alliance. Each
member must expend resources to provide such security, which naturally means sacrificing
the satisfaction of other preferences.
However, since all contribute to the
security pot, all know that their individual sacrifice may be claimed by
others. Therefore, there will be a reluctance to spend resources on security
that may be used by others, while encouraging, at least to some extent, claims
upon security that one would not have made in the absence of the security
agreement.
The latter phenomenon, the increased
willingness to call upon alliance members, is moral hazard at work and the former
phenomenon, the reluctance to expend resources that may be claimed by others,
is a well-known consequence of socialism.
Mises explained that socialism
discourages production while it increases demand. Why produce only to be forced
to share with others when one can demand to share in the production of others
without regard to having previously produced something of value to those same
others? Eventually all altruism vanishes in a sea of cynicism and nothing is
produced for anyone to share. The result is a tragedy of the commons fed by
moral hazard and socialism.
The tragedy of NATO
Today we see the above destructive
economic forces at work in NATO expansion. When the Soviet Union disintegrated
in 1990, the reason for NATO's existence vanished. But rather than declare NATO
to have been a success in deterring war in Europe, possibly disbanding the
alliance and building a new
Concert of Europe
that would include Russia, NATO bureaucrats set about to expand the alliance to
the east. Whereas the Concert of Europe after the Napoleonic Wars had quickly
embraced France as an important member, NATO expanded to isolate Russia by
absorbing its former satellite nations.
The last NATO expansion prior to the
disintegration of the Soviet Union had occurred in 1982 when Spain joined the
alliance. At that point in time NATO was composed of sixteen nations. Starting
in 1999 twelve countries have joined NATO, ten of them former members of the
Warsaw Pact. The other two, Slovenia and Croatia, were previously part of
Yugoslavia, officially a non-aligned nation, but a communist dictatorship all
the same. With the possible exception of Poland, none of these new members
contribute much to the alliance's military capability, meaning that the older
members are shouldering their security burden. Naturally expanding NATO to the
east has resulted in isolating and antagonizing Russia, who feels its security
threatened. So, NATO has succumbed to the socialist phenomenon by adding new
members who demand security without much of an obligation and to the moral
hazard phenomenon by adding new members whose territories could be used to
house American nuclear weapons, a situation that may yet provoke a major world
crisis with Russia, which is precisely what NATO was formed to avoid.
Ukraine and Finland as examples of moral
hazard and socialist demands
Both Ukraine and Finland are lobbying
NATO for membership. President Poroshenko of Ukraine is lobbying for membership
in both the European Union and NATO. The fact that Russia already has taken the
Crimea following anti-Russian riots apparently means nothing as long as Ukraine
believes that mighty NATO will intervene on its behalf. If NATO did admit
Ukraine, one wonders if Ukraine would invoke the collective security clause and
demand that NATO go to war with Russia. Finland is already a member of the EU
and now is openly lobbying for NATO membership. In a recent
interview
with der Spiegel, Finnish president Alexander Stubb was dismissive of
Russia's stated concerns about Finland joining NATO. His interview has to be
read to be believed. Both presidents' behavior illustrate the moral hazard
nature of collective security agreements. And neither country would contribute
anything to the security of current NATO members. On the contrary, Ukrainian
and/or Finnish membership would cause an escalation in tensions in Europe and
take us right back to the Cold War...or worse! Neither country considers the
possibility that NATO might not honor its military commitment. It is one thing
for NATO bureaucrats to admit new members. It is another thing for current members
to expend blood and treasure, especially when the possibility of nuclear war is
wafting through the air. Does anyone remember the Cuban Missile Crisis?
In conclusion, due to the inherent
problems with collective security alliances--tragedy of the commons fed by
socialism and moral hazard--nations should enter into them with great caution.
George Washington's farewell address has never sounded more prescient: Beware
foreign entanglements.
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