Often used as a tool to explain the downfalls of communism (or socialism, or just about any system that Goldman Sachs executives feel threatened by), most of us have come across the story of the "Tragedy of the Commons" at one time or another.
As the story goes, the commons were a communal grazing land. Say there are 10 villagers who graze their sheep on the commons. Villager Joe (an early ancestor of Joe Six-Pack) comes to the crafty realization that he can make more money by grazing more sheep on the commons. After sighting Joe cruising around the village in his shiny new Escalade, his fellow villagers quickly follow suit. Before long, the commons are overgrazed to the point where they won't support any sheep at all. Starvation and mayhem ensue. Better to have left that commons in the caring hands of a private corporation, as it turns out. Thank goodness we've dodged THAT bullet here in the good 'ol capitalist USA!
Told as it is to modern day Americans, this story seems quite logical and believable. That's because modern day Americans have lost two important bits of knowledge that would've been common sense to Joe and his fellow villagers.
The first bit of knowledge is what it means to be part of a community.
The fact of the matter is that in a typical community where grazing of the commons was practiced (this was and is still quite common in many parts of the world), there was a real community. People not only knew each other, they actually depended upon each other. Nobody was anonymous.
If it became known that you were taking more than your fair share of the commons, you would likely discover that your neighbor was no longer interested in helping you put up your hay, or that the village shoemaker might have trouble fitting you into his schedule. In a village where these people are your only options, that's a serious problem. You don't have the option to just drive to the Wal-Mart in the next town. Keeping your village relations in good standing wasn't just a matter of pride, but a matter of survival.
The second (though somewhat less important) bit of knowledge that most Americans lack is that of human labor capacity. In our fleeting era of fossil fueled extravagance, the sky (or your cash reserve) is the limit to what one person might accomplish. In the era of human powered everything that dominates the story of our existence, limits to human activity are much more pronounced. The fact of the matter is that Villager Joe couldn't have cut any more hay (using a scythe and rake) to feed his sheep through the winter than anybody else could, thus ensuring that any thoughts on increasing his grazing herd would be fleeting at best.
So does this mean that I think socialism trumps capitalism? The answer is yes. But it's also no. I think that most all societies, before the advent of the industrial era, functioned on a far more socialized basis, and functioned well, for hundreds or thousands of years.
With the advent of industrialization came the anonymity of life in large cities, easy transportation over long distances, and the collapse of real community. Under these conditions, socialism fails spectacularly, but then again so does capitalism (checked the health of our planetary life support systems lately?).
The answer, as always, is de-industrialization. The declining state of our fossil energy reserves ensure we're already headed in that direction, whether we like it or not. If we arrive in denial, kicking and screaming, we're not likely to survive the landing. If we acknowledge this and make preparations for a softer landing, we might survive the century. Many are already convinced (and rightfully so, imho) that humans will be extinct by our own hands within a few decades.
The transition to a de-industrialized economy isn't made through some grand declaration by political leaders, or some "born again" event on the individual level. It's made by each one of us a hundred times a day, in how we choose to spend our time and money. How will you spend yours?