A Tragedy of the Commons in Bolivia

Bolivia’s history is unavoidably related to their mineral wealth. The first important settlements in Bolivia were raised near mineral reservoirs, and our cities grew around the mining. Potosi was built next to an immense silver reservoir known as the Cerro Rico (Rich Mountain), and grew and flourished around its exploitation. According to census from 1573 Potosi had back then 120.000 inhabitants (more than Seville, the biggest Spanish city at the time), and by 1625 had 160.000 inhabitants.

The silver exploitation in the Cerro Rico is even older than the Spanish occupation, and could go as back as year 1.000 A.D., and it continues today. The business model has changed over the time. During the colonial period the mining was made by slaves and the silver was sent to Europe. After the foundation of the Republic the things continue pretty much the same, with the reservoir owned by some wealthy families and the exploitation being made by semi-slave workers. In the middle of the 20th century the mine was expropriated by the State and the exploitation continued until the collapse on the silver market in 1980 when the mine got practically abandoned.

It was after the year 2000, and with the prices going up again, that the miners returned to Potosi, but this time the business model is different. The exploitation isn’t being made by any private or public company, but for many small companies or cooperatives. There aren’t clearly delimited concessions, so the veins are exploited by the first to come. Inside some cooperatives, the workers pay a fee for the right to enter the mine, but there is no limit of how much mineral they can come out with. So, for all purposes, a Tragedy of the Commons scenario has been formed. The mineral and the mountain itself has become a common as there are no clear property rights over it. And because there is no owner, the miners share this reservoir and exploit it as extensively and quickly as possible.

The tragedy is not just the depletion of the mineral (there is no sustainable way to exploit a mineral) but also the side effects of its exploitation. The cooperatives operate without any plan or impact evaluation, and because of their operations now the mountain itself is about to collapse. The mountain has an historical and symbolic value that surpluses the value of all its silver. The Cerro Rico is mentioned in the Spanish Literature masterpiece Don Quijote de la Mancha; along with the city of Potosi has been declared cultural heritage of humanity by the UNESCO, and it’s so important for Bolivian history that even appears in the national pennon. This symbolic and historic value of the Cerro Rico is also a common (or, more properly, a public good), although isn’t a depletable one, and it’s this common that is at risk.

The only way to save the Cerro Rico is to reallocate the miners that work there, and take technical measures to preserve its integrity. This is quite a challenge because the miners are numerous (about 15.000), are highly (politically) organized, and are reluctant to be reallocated. The State has no power or will to enforce a reallocation against such a powerful stakeholder. The only way out appears to be a negotiation, but the miners refuse to stop their activities during the negotiation. So the mountain keeps suffering, and every day we are closer and closer to a complete Tragedy.