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Tuesday, June 12, 2012

Elinor Ostrom, 1933-2012

With sadness that I note the passing of Elinor Ostrom, who won the Nobel Prize in economics in 2009. She died today at age 78. To appreciate the importance of her work, read Peter Boettke’s Freeman article “Why Those Who Value Liberty Should Rejoice: Elinor Ostrom’s Nobel Prize.” Here’s a sample:

In the history of political and economic thought the source of social order has been attributed either to the invisible hand of market coordination (Adam Smith) or the heavy hand of state control (Hobbes). Perhaps one of the best ways to understand Elinor Ostrom’s work is to see it as working out a Hobbesian problem by way of a Smithian solution. That is perhaps a bit of a stretch but not by much. Her work on local public economies and common-pool resources focuses on actual “rules in use” (as opposed to the “rules in form”) that decentralized individuals and groups rely on to make decisions and to coordinate their behavior in order to overcome social dilemmas. It yields an optimistic message about the power of self-governance to succeed even in difficult situations. As my colleague Alex Tabarrok put it, Ostrom sees how, through various voluntary associations, groups transform the common-pool resource situation from a “tragedy of the commons” to an “opportunity of the commons.”

See also “Common Versus Government Property,” by Kevin A. Carson

The Indiana University announcement is here.

John Stossel wrote two columns on Ostrom’s work:

“A Nobel Prize for Showing That Freedom Works”

“Self-Governance Works”

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.