Imagine I am a farmer with river running through my property. I decide to put a mill next to the river, and waste from the mill leaks into the stream, and contaminates water. The waste doesn’t affect me, since I can always draw my drinking water upstream of the mill, but it affects my downstream neighbours. The mill has positive value to me, but negative value to my neighbours, and a conflict arises out of differences in these values.
This kind of problem, similar to the example Garret Hardin used in his classic paper on the Tragedy of the Commons in 1968 highlights a conflict in value faced by every social animal–where private interests produce public costs. I think one of the most important contributions of the academic social sciences to the real world is in identifying and solving conflicts of value similar to this. Here I briefly summarize some different ways that some specific sub-disciplines within the social sciences may go about addressing this kind of problem.
One way is through directly negotiated compensation. If the harm I produce to others can be quantified, and the benefit to me can be quantified, I can come to some sort of arrangement with my neighbours so there is a balance of costs–either I pay for the harm, or they pay me not to contaminate the water. This approach amounts to what economists call ‘internalizing costs’; in other words, we define private ownership–say, I own me and the property I live on–and any cost incurred to me or my property by others without my consent (an ‘externalized cost’) must be paid (‘internalized’). Basically, this approach says that I am free to determine the value of things I own, and nobody has the right to reduce their value without compensation to balance the reduction in value.
The challenge is that the real world is too complicated for this to work all the time. For one, ownership is often hard to define. How is the ownership of the stream determined? I don’t produce it–it just happens to flow through my land, so how much of it do I actually own, and how much do my neighbours own? Second, it would be onerous to negotiate every one of these compensation deals every time a dispute arises. Virtually everything we do probably produces some small externalized harm; it is not practical to keep track of all these harms, so much of it is left externalized.
Another solution to the problem is to enter a contract overseen by a third party. This involves agreeing on some set of rules of conduct, giving a third party (‘government’) authority, which includes the means and legitimacy to punish those who break the rules. This eliminates the need to keep track of all the costs or even fully demarcate ownership. Water could be treated as a collectively owned good with rules about use–say, an environmental assessment is required to ensure that my mill does not contaminate water above some level.
There are a few problems here too. First, we would need to figure out the value of things ahead of time. The government rules would have to decide what punishment is appropriate, for example, which means that the marketplace has no hand in determining the value of things. This is certain to reduce efficiency. Say, I really value the operation of my mill, and am willing to compensate neighbours for the harm it does. Well, the neighbours can use the government regulations to either prohibit the mill from operating under all circumstances, or demand a payment in excess of what would occur were a negotiation of values arrived at (a form of ‘rent’ seeking).
There is a third alternative, which is kind of like the second alternative, except that in this case, there are informal rules of conduct rather than rules enforced by some coercive third party. Instead of a government creating rules, norms of social behaviour gradually emerge to manage conflicts of value without either formal negotiations or regulations. These norms can work many different ways. They can create common values–so there is less conflict over the value of things. If there is a widespread cultural value of water, it is less likely any great conflict will arise over its use–instead, use will tend toward culturally acceptable practices. They can also create value in cooperation, sharing and other practices that help prevent conflicts in the first places. The norms can emerge organically, or they can be specifically created with some short or long term goal in mind.
The problem with this idea is that we live in a complex and diverse world with many values, and cultural and social norms seem too weak to govern most behaviours, particularly when the stakes are high. Furthermore, it may contribute to within-group cohesion, but actually exacerbate between-group conflict. Social norms can emerge that are counter-productive as well–serving the interests of those in power, at the expense of others. There is nothing about social norms that guarantee they will be good in any sense of the word.
At its core, the social sciences often involves addressing conflicts of value. Political scientists study the formation and structure of governance–how the institutions arise, the forms they take, when they are effective and when they aren’t, and so on. Sociologists study the emergence and nature of the social norms, trying to understand what causes them to be, and how they change over time. Economists struggle directly over the value of things, trying to better estimate benefits and costs so as to facilitate better regulations, or to find instances where the direct negotiation of values can take place. Other social scientists are involved too. Geographers try to understand differences in values between places, and the connection between values of physical and human systems. Anthropologists try to describe values across cultures and social groups now and over time. The social sciences are important because they can help us understand, characterize and resolve conflicts of value, and hopefully, contribute to the myriad institutions that make societies work. This isn’t just an interesting academic exercise, it is essential to the functioning and survival of our species.