Nobel for Elinor Ostrom

Wonderful, wonderful news today that the co-operative theorist and researcher Elinor Ostrom has been awarded the Economics ‘Nobel’ prize.
Her greatest work has been to show how co-operative systems of management succeed in contexts where market theorists long predicted failure. Markets are one system of property ownership and management but there is another great system which are the ‘commons’. Grazing land, fisheries, parks … Garret Harding long ago predicted that these end in tragedy, because people operate in a selfish way, with the incentive always to be a free rider. Drawing together examples from across a range of settings, Ostrom demonstrated the ingenuity and resilience of co-operative systems of resource management.

Hers has been an economics of the everyday majority and not the service of a rich elite.

In her more recent work, she has drawn on game theory to develop and test a grand theory of institutional design. It is complex stuff, but also an uplifting reminder that human behaviour in our capacity to collaborate is so much richer and more creative than the traditional theorists of the dismal science of economics would have us believe.

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