Elinor Ostrom 1933 - 2012

Elinor Ostrom, the world's only female Nobel Laureate in Economics, devoted much of her career to combing the world looking for examples where people had developed ways of regulating their use of common resources without resort to either private property rights or government intervention.

She found forests in Nepal, irrigation systems in Spain, mountain villages in Switzerland and Japan, and fisheries in Maine and Indonesia. In all these cases people drew up sensible rules for sharing the use of the resource and combined to perform regular repairs. People who broke the rules were fined or eventually excluded.

"Her attitude was that public policy is not just something done to the people by government officials but that public policy is done by the people too," said Michael McGinnis, director of the university’s Vincent and Elinor Ostrom Workshop in Political Theory and Policy Analysis at Indiana University

Ostrom shared the $1.4 million Nobel Prize for economics with Oliver Williamson of UC Berkeley. Working independently, they each showed how economics could be expanded beyond the conventional analysis of market prices.

For Ostrom, winning the prestigious prize was especially gratifying because of the struggles she faced to establish herself as a woman in a nontraditional field.

Why had this solution to the problem never been considered by economists?

Because of their model's implicit assumption that we only ever act as individuals, never collectively. We compete against each other, but we never co-operate to solve mutual problems.

And, since all the market's benefits come via competition, co-operation by producers is probably an attempt to rig the market, which should be outlawed.

The community pays a high price for allowing one model of how the economy works to dominate the advice we get and the way we think.