The Tragedy—and Promise—of the Commons

The “tragedy of the commons” is a term often used by economists and ecologists;  it’s shorthand for situations where individuals who are acting independently and rationally in their own self-interest undermine the common good.

Indiana Law professor and activist Fran Quigley thinks the tragedy of the commons explains a lot about the state of American health care. As he explains in an intriguing new article he shared with me (not in print yet, so no link available)

Between the 15th to 19th centuries, the rich and the powerful fenced off commonly-held land and transformed it into private property. Land switched from a source of subsistence to a source of profit, and small farmers were relegated to wage laborers….

 More recently, a similar enclosure movement has taken place. This time, the fenced-off commodity is life-saving medicines. Playing the role of modern-day lords of the manor are pharmaceutical corporations, which have taken a good that was once considered off-limits for private profiteering and turned it into an expensive commodity. Instead of displacing small landholders, this enclosure movement causes suffering and death: billions of people across the globe go without essential medicines and 10 million die each year as a result.

Quigley points out that producing medicine for profit is a relatively modern phenomenon–and says it is time to reclaim this commons, and he spends several pages showing how medicines fit the definition of a public good.

The public health implications of access to medicines generate another core quality of public goods: positive externalities. One person’s consumption of an essential medicine provides clear benefits beyond the direct consumer. Vaccines, for example, prevent both the recipient from getting ill and also from spreading the disease to others. If a society vaccinates widely enough, the chain of disease transmission is broken, leading to the quintessential public good of herd immunity. Global distribution of the smallpox vaccine has led to the eradication of a disease that once infected 50 million people a year.

I hadn’t known that “Until well past the middle of the 20th century, few countries allowed individuals or companies to hold exclusive rights to produce medicines.” ( I was aware that pharmaceuticals are and always have been, as Quigley points out “the very opposite of a laissez faire market.”)  And I did know that the U.S. government is a major funder of medicine research.

Quigley is particularly critical of the notion that drugs can be patented, and points out that many countries limit the duration or scope of such patents:

Among governments and the public alike, medicines continue to be treated as a good quite distinct from consumer items like cell phones or flat-screen TV’s….Jonas Salk declined to pursue a patent for the polio vaccine, saying the patent belonged to the people. The creator of the first synthetic malaria vaccine donated the patent to the World Health Organization. As Salk said in 1952, “Would you patent the sun?”

Today, of course, major drug companies depend upon those patents for their profitability.

Economists call this process the transformation of a public good into a “club good,” like taking a public park and turning it into a gated dues-required golf course.

Quigley’s article is a fascinating history of how intellectual property protection overcame the previous widespread belief that medicines should be considered public goods, not consumer products. And he argues that

The history of pharmaceutical innovations, especially vaccine developments and life-saving treatments for infectious and chronic diseases, shows that the critical research behind these developments was created outside the patent system…The U.S. National Institutes of Health alone provides $30 billion annually for medical research, governments provide tax credits to support corporate research, and government health programs are bulk purchasers of patented medicines priced far above the costs of production. When it comes to medicines,  taxpayers of the U.S. and other research-supporting countries are the very opposite of free-riders: they pay to build the bus, fill it with fuel, and hire the driver, but still are asked to pay a prohibitive fare if they wish to take a seat.

In fact, a decade ago, U.S. economist Dean Baker crunched the numbers and estimated the savings to the U.S. government if its health systems could provide medicines without the artificial mark-up imposed by monopoly patents. The resulting savings could fund the replacement of all private industry research and development several times over, while still leaving billions of dollars in remaining public benefit. A significant source of those savings derives from eliminating the for-profit pharmaceutical companies’ expenses on marketing, a cost that exceeds their investment in research and development. As it happens, there are more efficient use of resources than funding television ads for erectile dysfunction drugs.

When the article is in print, I will share a link, because this abbreviated review doesn’t do it justice. But the question is, given the extent to which current practices are embedded in our economic system, can it be changed? Quigley admits the magnitude of the barriers, but he provides a surprisingly long list of reform efforts currently underway.

What struck me most while reading the article was how easy it is to assume that “the way things are” is the way they’ve always been, and the only way they can be—and how difficult it is to identify and protect a steadily shrinking commons in an America that has lost sight of citizens’ essential interdependence.


  1. This is a primary reason Cannabis remains illegal for medicine. Big pharma can’t patent a plant, so they synthesize a few components, patent them and claim that’s all they need. Greed has supplanted common sense and is going to hurt all of us.

  2. Couldn’t “tragedy of the commons” also describe the two Bundy actions resulting in little, if any legal action, by the state and federal governments taking place and the Oregon situation continues?

    On the flip side; the Republicans have done little else but try to repeal or defund ACA; wasting valuable legislative time and millions of our tax dollars with dozens of failures. This is a current, on-going “tragedy of the commons” which should never have been allowed to happen and to continue with the most recent 62nd attempt against the ACA. Where in the Bill of Rights, the Constitution of the United States of America and the Amendments (other than Citizens United) is this condoned and allowed to continue?

    This blog covers much ground regarding “tragedy of the commons”; the decline of middle American into low income and the low income declining into poverty level with poverty level sliding into the masses seeking public assistance which is being denied by the 1% – today’s “rich and powerful”.

  3. On top of the patent issue is the prescription issue. One has to pay a doctor for the right to buy a patented medicine. Often, especially for the poor, that is the more expensive and prohibitive expense.

    When we lived in Mexico it was different. One could buy almost all common drugs without a prescription. In other words self diagnose. Of course that has both up and downsides but in their relatively disparate economy of the time poverty was a bigger problem than ill advised drug use. When you’re poor the only drugs that merit economic consideration are alcohol and nicotine.

    Capitalistic health care simply doesn’t work for the many, only the few. No markets sans competition does and it’s not possible for buyers and sellers for health care to be fully and equally informed.

    It has to be fixed and all of the proposals currently on the political table are bandaids when we need strong medicine.

  4. Pete, added to our comments on prescription drugs is the change in who is in charge of prescribing and who is in charge of administering. In the past year I have noticed that my primary physician no longer does the “doctoring” in this area of medicine. Now I have to pay her to OK and write a script and then drive to Walgreens and pay them to admit me to their public booth at the drugstore to get my shot. (With an armed guard to boot!) And apparently the Indiana State Legislature wants pharmacists to now have the power to “not fill a prescription” if they choose. Makes me wonder why I go to the doctor at all. She has become nothing more than a middle man in an industry no longer devoted to the care of the patient but to the worship of the almighty dollar.

  5. Another piece of the puzzle is how effective people have use the government to ban other things that people want and that are helpful to some. Many assume that Pot has always been classified as a schedule one drug. The Nixon study said it should NOT be regulated. Nixon rejected his own study. All very odd stuff. Easier to sell Prozac?

  6. Drug companies often claim that it costs millions of dollars to do research and, of course, they have to put up with the FDA trying to make sure they’re not killing or maiming people with the drugs they produce. I wonder how much each of the big pharma companies spends on phase 4 research, which is principally marketing research. If we deduct the money spent by NIH, VA, and DoD on research plus deduct the money spent on phase 4 trials, what is the true cost of a drug to the company?

  7. I am looking forward to reading the article when it is published and after reading today’s blog I plan to do some research on my own to find out when and why the changes were made to privatize medicines that are largely funded by the taxpayers.

    This reminds me that the internet was created from research and development by NASA. Once someone realized that it could be marketable, companies grabbed the opportunity and became wealthy and powerful off of taxpayer supported research and development.

    While I realize that the government is not supposed to be in the business of making a profit, there are certain areas of common good that never should have been allowed to be privatized for profit. Medicine and the internet are two of the largest for-profit commodities that should have remained under the control of government. Even though our government “regulates” utilities and the internet, they are still for-profit companies that exist to benefit stockholders.

  8. Nancy I would add energy to health care and the Internet as fundamental to progress but by nature not competition based markets.

  9. Theresa; primary physicians stopped practicing medicine a few years ago – BEFORE ACA was a gleam in President Obama’s eye – and became highly paid information and referral specialists which includes writing prescriptions for costly drugs. My arthritic hip was injured two years ago when I was mugged and robbed; my primary physician was aware of this and offered a prescription for strong pain killer which I refused. Situation worsened so I messaged her asking for an ex ray referral. Had to schedule another appointment with her, she could do nothing but poke around on my hip then ordered the ex ray in a clinic. Medicare was billed for her pokes and the referral; the only reason I was required to schedule the appointment.

    You and I experienced the “tragedy of the commons” in our own ways…all part of “worshiping the almighty dollar.”

  10. A couple of points on big pharma from the Internet.

    There are costs for bringing a new drug to market and costs to society, human and financial, to not having effective treatment for a specific health condition.

    The R&D costs now average about $2.6B and 10 years including the cost of failures. Very risky business.

    The average cost for marketing, designed to mitigate that risk by assuring that the winners make much more than the losers lose is higher than those R&D costs.

    I personally think that marketing which empowers patients to have a bigger say in their treatment than medical science is ludicrous.

  11. I should have added ludicrous because it compromises cost effective treatment in favor of pushing the costs of whatever I want to insurance companies to spread across their risk pool.

  12. Another important issue with patented drugs is when their patent is about to expire they pay millions to the companies that plan to manufacture the generic substitutes in order to keep the generic drugs out of the market for a few more years. The government should not allow this backdoor process of patent protection extension.

  13. 1. Lilly used to grow marijuana in a spot that is now the northside of Indianapolis.
    2. Vampire capitalism has moved into profitizing public domain literature and music.

  14. Paul, there are artists and celebrities. Some artists think that they’re entitled to both. Others believe that people helped by their art is reward in itself.

  15. Wow – thanks to Fran Quigley and to you Sheila for alerting us to his findings. This is ‘must read’ news for everyone. Readers – please share this electronically on Facebook and via other electronic means with your many other friends and acquaintances.

  16. Public health and intellectual property vs innovation and access to medicines is a complex symbiotic relationship where there’s no good guy or no bad guy and no simplistic answers.

  17. The Birch Bayh–Dole Act of 1980 per Wiki – he key change made by Bayh–Dole was in ownership of inventions made with federal funding. Before the Bayh–Dole Act, federal research funding contracts and grants obligated inventors (where ever they worked) to assign inventions they made using federal funding to the federal government. Bayh–Dole permits a university, small business, or non-profit institution to elect to pursue ownership of an invention in preference to the government.

    James Boyce commenting on Evan Bayh in Huffington Post in 2010 said – It’s just that now more and more people know and when his wife was paid more than $2 million in two years, they kind of figured the company that paid her got their money’s worth.

    Poor Evan. His wife was pocketing a million plus a year from health care boards and in the good old days, no one would have known, but now, it’s just so sad, people think that that is somehow buying a Senator — tragic, really.<<<

    Glenn Greenwald had this to say – It's impossible to find a more perfectly representative face for the rotted Washington establishment than Evan Bayh. He is the pure expression of virtually every attribute that makes the Beltway so dysfunctional, deceitful and corrupt.

  18. Louie, I can find no correlation between the Birch Bayh-Bob Dole Act of 1980 and Evan Bayh’s alleged corruption other than they share the same name.

    Like you, using Wikipedia for a quick resource, “In the spring of 1978, the question of who owns government-funded research and who could therefore profit from it became personal for Bayh, as Marvella’s cancer returned and the Bayhs learned that a technology that could predict a patient’s reaction to chemotherapy was held up by restrictions on patent rights for federally sponsored research discoveries. This was part of a larger problem of stifling promising inventions, with 22 funding agencies disposing of patent rights in 22 different ways at the time.

    Bayh joined with Senator Bob Dole, a Kansas Republican, to craft a uniform policy. Together, they drafted the University and Small Business Patent Procedures Act, known as the Bayh-Dole Act which allows United States universities, small businesses, and non-profit organizations to retain intellectual property rights of inventions developed from federal government-funded research. It was signed into law by President Carter on December 12, 1980.”

    Seems to me the Bayh-Dole Act of 1980 served the common good by freeing up innovative advances for all people that previously were backlogged on someone’s desk in Washington, DC while several different government agencies were arguing about patent rights.

    Evan Bayh’s apparent corruption has nothing to do with his father’s Bayh-Dole Act.

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