The ‘Tragedy of the Commons’ and the Role of the Money Interest Rate

A key concept in ecological economics, environmental economics or green economics is the privatization of natural resources. The argument for privatization is based on the idea that only excludable goods can be efficiently allocated by the market. This chapter explains why assigning property rights does not solve the problem of the overexploitation of freely accessible natural resources and does not increase economic efficiency, but rather decreases it. In this context, it will be demonstrated that the concept of a natural dividend is really a monopolistic dividend. Lastly, the chapter demonstrates that environmental destruction originates from the obligation to grow the real economy. This obligation arises from interest as an opportunity cost of every productive investment and applies to private and public goods alike. Even though a natural resource may have a private owner, as in the case of Chile’s forests, this does not guarantee that the resource will not be overexploited.