In memory of Elinor Ostrom (1933-2012)

With the death of Elinor Ostrom, activist and campaigners for social and economic justice have lost an important advocate and supporter.

Ostrom who was a Professor at Indiana University was the first woman to be awarded the Nobel Prize for Economic Sciences in 2009.

Ostrom's work challenged and rebutted fundamental economic beliefs, particularly free market and neo-classical economic paradigms. Ostrom was particularly concerned with relational aspects of economic activity — the ways in which people interact and negotiate with each other to forge rules and informal social understandings.

Ostrom's early work focused on what she called co-production. Ostrom argued that many public services depend heavily on the contribution of time and effort by the persons who consume these services, i.e., the clients and citizens.Ostrom believed that services rely as much upon the unacknowledged knowledge, assets and efforts of service ‘users’ as the expertise of professional providers. It was the informal understanding of local communities and the on the ground relationships that make services more effective.

Co-production describes the relationship that exist between ‘regular producers’, like health workers, police, and schoolteachers and their ‘clients’ who may be transformed by the services into safer, better educated and/or healthier persons.

Ostrom defined co-production as

“…the mix of activities that both public service agents and citizens contribute to the provision of public services. The former are involved as professionals, or ‘regular producers’, while ‘citizen production’ is based on voluntary efforts by individuals and groups to enhance the quality and/or quantity of the services they use”

One implication is that privatization of public services and the turning over of services to the market fundamentally transforms the relationship between provider and service user and hampers the development of co-production and democratic governance.

Her later work examined how people and communities collaborate and organize themselves to manage collective shared resources like forests, fisheries and natural and social resources. The research overturned the conventional wisdom about government regulation and challenged the idea that private ownership of public resources is better and more effective. Ostrom's work provides clear evidence that the commons-based traditions of cooperation and communal management of resources is not a violation of basic economic common sense.

Her work undermines political conservatives and mainstream economists who denigrate collectively managed property and government and who argue that only private property and the "free market" can responsibly manage resources. Her work also directly challenges current ideas that privatization and private ownership and expert management of resources is the most effective strategy.

Ostrom advocated a “polycentric” approach to managing shared or common resources involving oversight “at multiple levels with autonomy at each level. Ostrom argued that shared management of resources helps to establish rules that “tend to encourage the growth of trust and reciprocity” among people who use and care for a particular commons.

Ostrim argued that key management decisions should be made as close to the scene of events and the actors involved as possible.

Her work showed that the people most affected by or with a stake in a particular resource are the ones best able to collaborate to use and manage those shared resources effectively and sustainably.

Ostrom's work demonstrates the importance of shared (collective) rather than expert or private management of resources and knowledge and emphasises the importance of active citizen partcipation. She cited a comprehensive study of 100 forests in 14 countries that detailed how the involvement of local people in decisionmaking is more important to successfully sustaining healthy forests than who is actually in charge of the forests.

David Bollier writes of the significance of Ostrom's work:

In the 1970s, economics was quickly veering into a kind of religious fundamentalism. It was a discipline obsessed with “rational individualism,” private property rights and markets even though the universe of meaningful human activity is much broader and complex. Lin Ostrom pioneered a different, more humanistic way of thinking about “the economy” and resource management. She originally focused on property rights and “common-pool resources,” collective resources over which no one has private property rights or exclusive control, such as fishers, grazing lands and groundwater. This work later evolved into a broader study of the commons as a rich, cross-cultural socio-ecological paradigm. Working within the social sciences, Ostrom proceeded to build a new school of thought within the standard economic narrative while extending it in vital ways.

Ostrom's work also has direct relevance to the current economic and environment crises. She wrote:

"We cannot rely on singular global policies to solve the problem of managing our common resources: the oceans, atmosphere, forests, waterways, and rich diversity of life that combine to create the right conditions for life, including seven billion humans, to thrive.....Success will hinge on developing many overlapping policies to achieve the goals,.......We have a decade to act before the economic cost of current viable solutions becomes too high. Without action, we risk catastrophic and perhaps irreversible changes to our life-support system.”

Articles written in memory of her work are here, here, here and here.

A reading list of her work is here.

The last article she wrote before she died is here

Her last book, published just before her death was titled Working Together: Collective Action, the Commons, and Multiple Methods in Practice, and describes the advantages of using several different research methods to study a problem.

The crisis in the Murray Darling and the failure of market mechanisms

Bruce Haigh on the madness of using market mechanisms to manage water in the Murray Darling Basin and the need for a radically different approach to the management of Australia's water resources:

"The management of water should not be left to markets where the pursuit of profit has water abused, devalued and often powerless with respect to sustainability. Water needs a voice and a value beyond the market. At the moment it comes a very poor second in calculations relating its use - agriculture and industry have the upper hand and water is required to comply".


"The National and Liberal Parties presided over the slow decline of rural Australia. They had the opportunity to reverse this during almost 12 years of government. They declined to do so and as a result many jobs were lost and economic opportunities that may have come through the provision of better services and infrastructure were not created, but were lost. This neglect saw the rise of rural Independents who now hold the balance of power". 

Industrialising the Kimberley: Colin Barnett's hubris

image of James Price Point, Kimberley, courtsey of Wangle

Excellent piece here by Martin Pritchard, Director of Environs Kimberley about the hubris and nightmarish impact of Colin Barnett's plan to industrialise the Kimberley.

Pritcard shows that the James Price Point development is the first step in the Barnett vision to gift much of the Kimberley region to mining and resource companies and turn into an industrial and mining zone.

WA writers on the failure of the market economy to deliver social and economic and environmental justice

Western Australian writers and thinkers continue to write about the market and corporate economy and issues of social, economic and environmental justice.

Sarah Burnside has published recent pieces in online publications New Matilda and Online Opinion. In New Matilda she challenges the idea that the majority of Aboriginal people benefit from the mining and resources industry. In reviewing a recent Australian monograph on Indigenous people and the mining industry Sarah suggests that there little evidentiary support for the idea that mining is clearly good for Aboriginal people.

On his blog Neville Numbat, Piers Vertegen continues to write important pieces on environmental issues. His most recent piece, also published in the online publication Wangle, discusses the likely impact of Julie Gillard's ascendancy for climate change policies. Piers argues that based on her past record the new PM appears unlikely to support real action to address climate change.

In other articles Piers writes about a recent WA Auditor General's report on the failure of WA government agencies to reduce energy consumption and the lack of tangible action and commitment by the Barnett Government to take action to reduce the alarming growth in carbon pollution in WA.

Colin Penter has published this piece in Online Opinion contrasting the ways that civil society groups are whistleblowers are criminalized, while corporations that break the law regularly avoid any substantial penalty. The tenets of limited liability and corporate personhood are used to enable corporations to avoid facing the full force of the law for their criminal behavior. This is a protection not available to individuals and civil society and violates the idea of equality before the law.

Perth based journalist Vicki Laurie has published a long essay in the July edition of the Monthly on the response of WA government agencies to Aboriginal disadvantage. Using the lived daily experience of one Aboriginal family, Vicki demonstrates the enormous gulf between the policy rhetoric of politicians and government agencies and the realities of life for Aboriginal families.

Disability activist Erik Leiopold has published a number of recent pieces in the West Australian and Online Opinion on the private members bill on Euthanasia currently before the WA Parliament. Erik's piece draws on his new book, based on his PhD thesis, which explores the links between market values, disability and euthanasia.

Academic and Director of the WA 2020 Project Peter McMahon has published an Op Ed piece in the West Australian (Monday July 5 2010) on the coming energy crises and its likely impact on Perth. Perth is one of the least sustainable cities in the world and Peter's article describes the energy challenges facing the State as a result of dwindling oil reserves and climate change.

In the lead up to NAIDOC Week Myrna Tonkinson from the University of WA has written this piece in Eureka St lamenting the lack of progress and commitment by Governments in addressing Aboriginal disadvantage.

West Australian families and the environment pay for the market's excesses

image courtesy of the Conservation Council

This excellent piece by Piers Verstegen the Director of the Conservation Council of WA appeared recently in the West Australian and can be found on Piers's excellent blog site Numbat News. There is also a Facebook site to keep up with latest activities of Piers and the Conservation Council.

State Budget rewards polluters but punishes environment and families

By Piers Verstegen

In a closed briefing to business and community groups on the State budget, Premier and Treasurer Colin Barnett said that this budget strongly reflects the policy agenda of the Liberal-National Government. Sadly, an examination of the budget reveals this agenda as one that places the environment as one of the Government’s lowest priorities.

The second budget produced by the Liberal-National Government continues the established trend of running our environmental regulators on the smell of an oily rag. Much less than 2% of the overall State budget is dedicated to the increasingly impossible tasks of reducing carbon pollution, managing waste, regulating polluting industries, controlling land clearing, managing national parks, reducing air pollution, protecting the marine environment and all the other functions of the State environment portfolio.

When you consider that environmental protection is the responsibility of States under the Australian Constitution, this is grossly inadequate. The inevitable consequence of this budget frugality will be increasing impacts on our environment, increased threats to our biodiversity and health, and carbon pollution skyrocketing out of control in WA.

For a realistic assessment of the environmental consequences of this year’s budget, one must look beyond the environment portfolio. On the other side of the ecological balance sheet, the budget increases the already very significant taxpayer subsidies for polluting and destructive industries in Western Australia.

For example, the budget earmarks over $100 million towards assisting the development of a polluting LNG processing plant on the Kimberley coast – in the middle of the southern hemisphere’s most important hump-back whale calving ground. If it goes ahead, this development would be responsible for increasing WA’s greenhouse emission by 25% on its own.

Premier Barnett has stated that the Kimberley is the Government’s number one environmental priority, and a small allocation has been made to allow for the creation of a new marine park at Camden Sound, North of Broome. This funding is welcome; however the government’s environmental credentials in the Kimberley must be weighed against the heavy taxpayer investment in opening up the north for damaging and unsustainable industries.

Expenditure in the energy portfolio, which could hold the key to a clean renewable energy future, is even more alarming. The budget reveals that more than 99% of capital expenditure by the government’s energy utility will fund polluting fossil-fuel generation; less than 1% will be spent on renewable energy.

And if this is not bad enough, the budget totally fails to account for the massive economic liability that will be passed on to future Western Australians as a consequence of Western Australia’s rapidly increasing carbon pollution.

The Rudd government have delayed the introduction of an Emissions Trading Scheme for the moment, but some price on carbon will inevitably be introduced in some form in the future. Failing to disclose this cost to householders who will be forced to bear that cost because of decisions made to subsidise polluting industries today is duplicitous.

The EPA have advised that WA carbon pollution is likely to increase by an alarming 75% in the next few years. Decisions made today will determine whether Western Australia unlocks its clean energy potential, or locks into a future where Western Australian’s will be forced to pay higher and higher carbon polluting costs.

The disparity between the government’s treatment of the environment and polluting industries is echoed just about everywhere you look in the budget papers.

For example, water charges for households will be increased, but Collies rapidly expanding coal-fired power industry will continue enjoy huge volumes of water almost totally free of charge.

Mining companies receive even more handouts as part of the State Governments $80 million mining exploration incentives package (they already receive generous tax concessions for expolration activities from the Commonwealth), but taxpayers will have to pick up the bill for environmental damage caused by mining as the government continues it’s policy to exempt miners from paying bonds to cover the cost of rehabilitation.

And while families pay more for power, the budget continues the generous energy subsidies enjoyed by mining and other industries supplied from the grid in regional areas.

Financially this budget is in surplus, but that fails to account for the massive environmental and economic liability that will be transferred to future generations as a consequence of the Barnett Government’s overwhelming focus on expanding and subsidising unsustainable and polluting industries in WA.

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Western Australia and the downside of economic booms

Peter McMahon is co-Director of the WA 2020 Project at the Institute for Sustainability and Technology Policy within the School of Sustainability at Murdoch University. The WA 2020 Project aims to fill the policy vacuum that exists in WA in relation to issues of sustainability. In particular, it hopes to build connections between researchers, citizens, social movements, activists and civil society groups to generate understanding and action on threats to sustainable living in WA.

Peter McMahon has written important pieces on the unsustainable nature of the WA economy and community, and the fragility of WA's mining and resources boom. In a number of papers on the website of the WA 2020 project McMahon has contributed an alternative history of WA's economic development and a very different narrative about economic, environmental and social sustainability in WA.

Peter McMahon is a regular contributor to the national online magazine Online Opinion (his articles can be found here). This piece appeared recently and is reproduced with acknowledgments to Online Opinion.

A 'Big' West Australia? by Peter McMahon

The current debate about a “Big Australia” is strongly influenced by the sense that the country has a bright economic future. This economic future has been increasingly determined by the resource-rich states, Queensland and Western Australia, and although these states are leading growth there are major problems threatening this situation. This article looks at the case of WA.

Perth is now the country’s fastest growing city and a debate has begun in WA sparked by claims that the population would double by 2050. Perth itself was projected to grow to two million residents and sprawl over 12,000 sq km (which is almost 50 per cent more than New York with nearly 18 million people).

The Australian Bureau of Statistics report estimates that in response the urban road system must be doubled to 27,000km to accommodate the increased traffic, 1300 new schools must be built and water and energy consumption will double requiring new desalination and energy plants.

The main thing driving this “Big WA”notion has been the resources boom which has made WA a major exporter and generated big money for workers, investors and governments. The general optimism arising from the boom, which has been assiduously boosted by local business, the media and politicians, has propelled the idea that the state is capable of anything.

The underlying realities are very different. The WA boom is in fact based in the unprecedented demand for resources caused by the equally unprecedented Chinese economic boom. China has bought WA steel at top prices and wants WA gas and perhaps WA uranium.

However, the Chinese boom is much more fragile than most people understand. The Chinese economy is unbalanced with an orientation towards exports, and this economic growth has been at the expense of social justice and the environment. The authority of the Communist Party is based on this economic success, and if this fails then political upheaval will likely follow.

Furthermore, the Chinese boom has been underpinned by conducive global conditions, and if these change markedly economic growth could collapse. The ongoing global economic crisis, the fragility of the US economy, the ebb of globalisation and a number of other developments threaten this accommodating world order.

As for the other major WA export earner, agriculture, changing rainfall patterns, salinity, soil acidity and erosion threaten the total amount of arable land, while increasing fuel, fertiliser and chemicals costs is driving farmers into ever greater debt. Last year the average loss for hard-pressed Wheatbelt farmers was half a million dollars.

The real inhibitor to WA growth is the unsustainability of current trends of consumption, based as they are in boom-time conditions. Indeed, WA is arguably the least sustainable community in the world, outside totally crazy places like Dubai. Essentially, there is not enough water, not enough infrastructure and not enough cheap energy to pursue the current high growth strategy for much longer.

Western Australians are world class consumers and waste generators. Of the more than 1,800 gigalitres of water they use most goes to agriculture (40 per cent), then mining (24 per cent) then households. Most household usage is for gardens, with usage for luxury items like dish washers and swimming pools a growing factor.

The problem is that rainfall is declining, at least for the south west where the decrease has been around 25 per cent. Dams are emptying out and Perth has resorted to making fresh water though desalination, a highly energy intensive process. The WA Government is slowly introducing conservation measures for households, but overall the situation is approaching criticality even though consumption has stabilised.

WA is Australia’s greatest producer of waste. In 2002-3, WA per capita waste totalled 1.4 tonnes with around 7,300 tonnes disposed of in 300 landfills each day. The housing boom has been a factor here since most waste comes from building demolition and activity, followed by municipal waste collection and then commercial and industrial activity. Along with the quantity, growing levels of toxicity in the waste is a problem.

Western Australians live in the biggest houses in the world (the average house size has doubled while occupants halved over the last half century). The average house price in WA recently rose to half a million dollars. As for that other major consumer item, WA has the highest vehicle ownership rates (75 per cent) in Australia, and the distance driven has been increasing (to nearly 8,000km per car in 2004).

When estimated in terms of ecological footprint (the amount of land needed to meet each person’s resource requirements) WA unsurprisingly rates very high. In 2001 the ecological footprint was 14.5 hectares, well above the national figure and very high when compared to the global level of 2 hectares.

The upshot of all this is that not only can WA not support the population rise suggested, according to any sense of fairness it shouldn’t. Such an increase would mean the perpetuation of grossly unfair resource distribution on a global scale.

The underlying cause of WA’s development has always been the availability of cheap fossil fuels to power the transport, industry, mining and agriculture that have formed the state economy. It was the combination of steam and the gold mining boom that got WA going in the 1890s, then the internal combustion engine and agriculture that kept it going after that until new transport technologies and the iron ore boom kicked in after the 1960s. Along the way jet engines made WA much closer to the eastern states and the rest of the world, easing the problem of isolation.

Now WA has itself become a major energy supplier, mostly in the form of gas but also uranium. There is currently a big debate about whether WA gas should be going to overseas markets as liquid gas, or kept for local use (right now 15 per cent is set aside for local use). The gas is actually some way offshore (the Gorgon gas field is around 130 km of the north-west coast), ours by virtue of a treaty signed in the 1950s, and a recent report highlighted the security concerns in relation to this. China, already a major buyer of north-west gas, is building a blue water navy and was the focus of recent Defence White Paper on future strategy.

The uranium is inland and reserves - totalling around 193,000 tones or 5 per cent of the global total - will begin to be mined soon, perhaps this year. There has in the past been pressure for WA, with large tracts of geologically stable desert, to accept nuclear waste, and this is likely to happen. WA also has mineral sands, some of which (thorium) can be used as nuclear fuel.

The boom-bust economy that is driving high growth rates in WA has been criticised as a longer term prospect for economic reasons. Jon Sutton, Bankwest managing director, wrote in the West Australian that rather than relying on the resources sector alone, “(w)e need “State building” projects. Instead of squandering this bounty, we need to channel some of the receipts of our next period of growth into big infrastructure projects that benefit the State and create jobs in their own right.”

This comment is particularly apposite as much the state’s infrastructure is old and furthermore must be replaced in order to deal with the impact of global warming. A recent storm that knocked out electricity in nearly a quarter of all homes, brought down much of the telecommunications system and gridlocked the major roads network, all costing the major part of a billion dollars, showed just how vulnerable Perth is to such disruption.

Which brings us to the final reason why the Big WA future can’t happen. Dealing with global warming necessitates increased fossil fuel prices, and as peak oil cuts in prices will also rise because of this. WA is already suffering from major household energy cost rises (with increasing numbers of households unable to pay: 17,000 households were disconnected for non-payment of bills by Alinta Gas last year), and rising fuel costs will hit hard. This includes personal travel in cars, commercial logistics and air travel. Furthermore, mining and agriculture are major energy users of energy and will be heavily affected as both operational and shipping costs go up.

There are signs that the current WA state government is at last making some plans for the future, notably the Directions 2031 initiative, but there are no signs that they see the energy crunch as a real issue. Not only is Big WA unlikely, if the energy crunch hits an unprepared WA we may well see a considerably smaller WA as people abandon a state in real trouble.

The market, corporations and environmental damage

image courtesy the Guardian and from the Report prepared by Trucost

A recent unpublished study for the United Nations shows the cost of large corporations desire to' internalize profits' and 'externalize costs'.

The United Nations study estimates the world’s 3,000 largest corporations are responsible for over $2.2 trillion in environmental damage.The study found that the cost of and other damage to the natural environment caused by the world's biggest companies would wipe out more than one-third of their profits if they were held financially accountable.

The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils.

The report in the Guardian argues that:

"The true figure is likely to be even higher because the $2.2tn does not include damage caused by household and government consumption of goods and services, such as energy used to power appliances or waste; the "social impacts" such as the migration of people driven out of affected areas, or the long-term effects of any damage other than that from climate change. The final report will also include a higher total estimate which includes those long-term effects of problems such as toxic waste"

The unpublished report was conducted by the Principles for Responsible Investment Initiative and the United Nations Environment Programme.