Why Ostrom's Nobel Is Even More Shocking Than Obama's

The news of President Obama's Nobel Peace Prize coincidentally came to me last week during a Peace Studies Conference. As in many corners, people there were speculating about the motivations for giving this prestigious award to an untested president who has yet to create a legacy of peace in his short tenure. Many, of course, truly hope that Obama turns out to be a great peacemaker, but future longings are not supposed to be the essence of this award based primarily on accomplishments and not conjecture.

It is true that the president has made some important statements about ridding the world of nuclear weapons, notably this one on the campaign trail in the summer of 2008:

"It's time to send a clear message to the world: America seeks a world with no nuclear weapons.... [W]e'll make the goal of eliminating all nuclear weapons a central element in our nuclear policy."

He followed this with similar rhetoric earlier this year while touring Europe:

"I will lay out an agenda to seek the goal of a world without nuclear weapons.... We can't reduce the threat of a nuclear weapon going off unless those that possess the most nuclear weapons, the United States and Russia, take serious steps to reduce our stockpiles. So we want to pursue that vigorously in the years ahead."

It is possible that the Nobel committee had such statements in mind during their award deliberations. As others have speculated, it is also possible that they were: (a) rebuking George Bush's policies of brinksmanship, saber-rattling, and open aggression; (b) calling on Obama's "better angels" and attempting to tamp down the pressures impelling him toward escalation of warfare as the leading edge of U.S. foreign policy; and/or (c) bolstering his nascent rhetoric and acknowledging the historic nature of his election as President. But in light of the subsequent Nobel Prize in Economics, there may have been an even subtler rationale at work here, as implied by the committee's announcement:

"Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes."

Make no mistake, despite the somewhat tame Nobel committee description, Ostrom's body of work is inherently radical, demonstrably anti-corporate, and implicitly socialistic. Her basic premise is that the purported "tragedy of the commons" -- in which privatization of resources is viewed as the only realistic antidote to their complete exploitation -- is actually an inversion of logic and reality, and that in fact the most sustainable forms of resource management are collective, cooperative, egalitarian, and decentralized in nature. Citing empirical case studies from around the world, Ostrom's work demonstrates how people in localities on every continent have crafted and maintained elegant solutions to what might otherwise become conflict-ridden scenarios involving competition over dwindling essential resources.

In choosing to honor her, the Nobel selection committee has provided an intriguing buttress against the self-referential "only money matters" work of people like Milton Friedman, and has extended its influence into a new generation of economics premised on sustainability and community-based management. Whereas the 1998 selection of Amartya Sen indicated a willingness to embrace emerging views that nevertheless remained within the dominant "money matters" framework, Ostrom's selection evidences an impetus to include within the terrain of economics those visions of human discourse and practice that exist largely outside of commonplace touchstones such as inflation, production, consumption, or distribution. Ostrom, in essence, exceeds crass materialism.

By conceptualizing the commons as a locus of resource management rather than exploitation, Ostrom not only focuses on the hardware involved in such systems but on the software as well. In her empirical case studies, great attention is paid to the non-hierarchical forms of decision-making and non-reified authority that pervade the administration of these "common pool resources." Ostrom observes that when people resist externalization of control over those resources and instead decide to take on the challenges of collective self-management -- thus rejecting both classical liberalism and conservatism alike -- not only is the resource base preserved but the spirit of democracy is bolstered as well. This necessitates not only rough political equality, but also a strong undercurrent of mutualism that is often masked in competition-based frameworks.

Still, Ostrom is careful to resist concluding that people in common-pool systems are somehow nicer or more culturally-predisposed toward cooperation and mutual aid. Indeed, her examples and cases span the world, and they reflect the essential (and perhaps even radical) notion that people can and will inculcate the virtues of concerted action and common humanity not because it is morally efficacious but more so because it actually works in practice. Cooperation and egalitarianism, it turns out, are viable and sustainable practices both socially and ecologically, nothing more nor less than that.

In highlighting these insights by honoring Ostrom, the Nobel committee perhaps had another aim in mind, namely to challenge the pejorative use of socialism in American politics as something akin to fascism. Obama himself is often coded as both a socialist and a fascist by oppositional demagogues, and his simultaneous honoring may be a way of taking note of this and subtly challenging its illogic. Whatever one thinks of Obama's Nobel honor, the real story in this awards cycle is that economics has been resurrected as a site of community, stability, and sustainability -- in other words, as a source of hope.

It thus turns out that a Nobel Prize was indeed awarded this year to a purveyor of hope whose last name begins with "O." While the better-known one deliberates whether to escalate resource wars, the other suggests that conflict over resources is at best an ill-conceived oxymoron. For this, perhaps she should have received a Peace Prize as well.

 

 

Comments

[Ben Dixon]

How is Mrs. Ostrom's Nobel award more shocking than Obama's? She developed a hypothesis, collected data, analyzed the data, tested her hypothesis against the results, and published the findings. She actually did something (whether or not you agree with her findings) unlike Obama who basiclly said "here is what I hope to accomplish". It would as if the Nobel prize committie had awarded the prize to Mrs Ostrom becuase she said she hoped to prove a theroy about common use lands.

[Randall Amster - Huffpost Blogger]

I greatly appreciate the sophistication and incisiveness of these comments, and largely agree with most of them -- in particular the notion that the old labels simply don't apply anymore. One of the challenges we face along these lines is the conflation of political, economic, and moral theories. We sometimes hear phrases like "capitalist democracy" or "authoritarian socialism," as if these concepts were inextricably bound up together. But this need not be the case, and one could plausibly argue that capitalism is fundamentally anti-democratic whereas socialism is essentially non-hierarchical. There's a semantic quality to all of this, but words do matter; for instance, consider this basic working Wiki definition of 'socialism' and how it differs from the popular perception:

"Socialism refers to various theories of economic organization advocating public or direct worker ownership and administration of the means of production and allocation of resources, and a society characterized by equal access to resources for all individuals with a method of compensation based on the amount of labor expended."

This is actually quite close to the 'common pool resource' framework that Ostrom analyzes in her work. The question of scale of applicability is an interesting one, and indeed deserves more discussion. Thanks to you all for reading these blogs and raising the important questions!

[Jeff Atlee]

It is time to leave behind outmoded and irrelevant paradigms like socialism or capitalism. They limit new thoughts because as long as they persist people will try and categorise things into these old ideas.

Personally I think Ostrom's prize represents a shift away from money centred economics into the more sensible resource based economics. it is fascinating to note that so much of her research took place in locations where a lack of resources led to higher levels of co-operation. The way I see it there are two alternatives

We can continue to worship the empty god of money and spend our time running from times of irrational exuberance to periods of industry-destroying depressions or we can take stock of what the Earth can produce, what people need, how best to harvest energy and base our economy on that.

[Soulsurfer]

But how to eliminate greed and avarice?

[JScott]

'irrelevant paradigms like socialism or capitalism'

Especially when you think about Europe with it high degree of social welfare and single payer healthcare, but still retains it's democratic insititutions and yet on the other hand there is the repressive government of China and relatively unfettered capitalism there.

Seems stuff doesn't really fit neatly in boxes and labels anymore.

[jsarets]

Marx was right. Socialism emerged from mercantilism. Fascism emerged from capitalism. Socialism and fascism became globally intertwined.

Then the central institutions suddenly collapse, leaving behind a decentralized collective libertarianism called communism.

He couldn't explain why the elite central institutions would collapse or why people would seemingly give up their individuality to become part of a collective, so it seemed ridiculous.

But then came the network -- the internet and the world wide web -- a way for people to self-organize into voluntary collectives without giving up their individuality. There's the answer he couldn't provide.

Ostrom's work isn't implicitly socialist. It's implicitly communist. Socialism is a big central government. Ostrom's work advocates small decentralized collectives. That's communism.

I know that communism has been redefined as authoritarian socialism, but that's not what it really means. Communism is a liberal ideology: freedom from the government and the corporation.

The network has become smarter than the market, and it's only a matter of time before the network becomes the dominant structure under which production is organized.

[Matt Osborne - Huffpost Blogger]

Communism is the way a village works. That's how most humans have lived for most of human history.

[AngryOhioan]

"Her basic premise is that the purported "tragedy of the commons" -- in which privatization of resources is viewed as the only realistic antidote to their complete exploitation -- is actually an inversion of logic and reality, and that in fact the most sustainable forms of resource management are collective, cooperative, egalitarian, and decentralized in nature."
"...Ostrom's body of work is inherently radical, demonstrably anti-corporate, and implicitly socialistic."

You exaggerate and overgeneralize Ostrom's findings. Her findings dealt with social norms regulating the use of local common resources in small communities. For resources used by more than at most a few thousand people (in other words any large scale problem in a country like ours) her findings do not apply. To say that her work is implicitly socialistic is simply wrong.

[DiogenesOfAlaska]

I don't know enough about her work (yet) to know whether you're right, but let's assume you are.

What's incredibly interesting is that you point towards the bad habit of people applying sound research of economists to a realm of conditions and circumstances where it just simply has never been checked or thought through.

If that happens at the fringes it's ok and it's the only way science can be of use. But alas, how about the mindblowing assumptions about humans as agents in the economy that classical and neoclassical theory requires you to swallow?

What about a macro-economics paradigm in which the degree of leverage and debt of firms and/or households plays no role (=cancels out) at the aggregate level?

And how do you like a chairman of the Fed who makes his monetary policy decisions on the basis of such a model. For decades.

As I said: your point is extremely well taken.

[satyriasis]

It's a benefit to humanity that economists like Stiglitz, Krugman, and Ostrom, are winning Nobel prizes and getting recognition for their great work. They serve society, not corporate power.

[DiogenesOfAlaska]

and what's more: they are right!

[DiogenesOfAlaska]

It's very gritty of you to suggest that her work is implicitly socialist, and that Americans should learn more about what that word actually means, but I doubt that Ostrom is a socialist.

Of course she points out limitations of the 'money matters' view - that's inevitable because her subject is the study of typical situations of market failure. But that by itself doesn't mean socialism.

What it means is that the 'ONLY money matters' people have imagined themselves to live in a theoretical land of milk and honey for decades, abstracting and assuming away in the first step - even before the investigation starts - many of the core problems.

But to the extent that a sound and proper understanding of 'public goods' theory and practice will render totally obsolete the old semantic wars about socialism, I fully and wholeheartedly agree. That's EXACTLY what will happen. Let's hope it takes place soon enough.

[Matt Osborne - Huffpost Blogger]

Interesting. Fanned.