A. The commons, being scarce yet commonly owned, is subject to abuse to the detriment of the public based because of the rational self interest of individuals acting for personal benefit in the short term...yet in the long term, the commons is either injured or destroyed, leading to the long term detriment of all.
In short, no individual incentive to properly manage the commons in contrast with private property, where any abuses to your property directly and only effect yourself.
That's right.
A private property owner suffers all of the costs of his bad management, and reaps all of the rewards of his good management.
While a co-owner of joint property suffers only part of the costs of his bad management, and reaps only part of the rewards of his good management.
...so the former's incentives for good management are much better.
Think of property as an enterprise, or firm: with profits and losses.
For a sole proprietor, the firm's profits/losses are
his profits/losses - he profits if, only if, and to the extent that the firm profits.
For a co-owner of joint property, he may profit even if the firm is making losses, because his share of the revenues may be larger than his share of the costs.
For instance, if a new policy would cost $1000 and yield $500 in additional revenues, no sole proprietor would consider it.
But a co-owner might consider it, if he can capture more than his share of the revenues, and bear less than his share of the costs.
Thus a rationally self-interested sole proprietor would never pursue policies which would undermine the profitability of the firm; while a co-owner might.
What does this have to do with politics?
The state is a firm, with revenues and costs: profits and losses.
A monarchy is a sole proprietorship; a democracy is a form of joint property.
No rationally self-interested king would ever pursue policies which would undermine the profitability of the state; a democratic politician might.
What do we, as libertarians, care about the profitability of the state?
The profitability of the state depends on the
prosperity of the society which it rules.
Rich society, rich state; poor society, poor state.
...if you could take a 10% cut of the GDP of a country, would you rather it be North Korea or South Korea?
A king's profits/losses are the profits/losses of the state, and the more prosperous the underlying society, the more profitable the state. Thus a rationally self-interested king is incentivized to maximize the prosperity of the society which he rules. And, as students of economics, we know that there is only one method of maximizing societal wealth: laissez faire capitalism. So, a rationally self-interested king, who understands economics, will pursue laissez faire capitalism.
A democratic politician's interests are not so neatly aligned with those of society. He is paid a fixed salary,* not a share of the state's revenues. If society becomes more prosperous, and so the state's revenues increase, he does not benefit; or if society becomes less prosperous, and so the state's revenues decline, he's not harmed. His only interest is being re-elected, to maintain his salary, and soliciting bribes, to augment it; in pursuit of both of which he will rationally enact new socialistic policies (to please the voters or the donors), which will impoverish society, but benefit him personally.
*It wouldn't solve the problem to make politicians' salaries proportional to the state's revenues (ala profit sharing at a big corporation). For instance, suppose a politician is considering whether to pass some socialistic law that would harm the economy and therefore reduce state revenues by 1%; and so his salary, pegged to state revenues, would drops by 1%. Well, this is still a rational course of action for him if the bribe he extracts from the beneficiary of the socialistic policy is greater than 1% of his former salary, right? In other words, the essential problem is the division of ownership: the fact that a 1% owner reaps only 1% of the benefits of his good management, and suffers only 1% of the costs of his bad management. The only system which aligns the incentives of the ruler with those of the state as a whole, and therefore with those of society as a whole, is monarchy.
