Objection:

Libertarians recast a very real structure like the "tragedy of the commons" as a "fallacy of the commons." The libertarian "solution?" Sell off the commons to individuals who will take care of them.

Response:

The "tragedy of the commons" is a situation where rational action by individuals to improve individual performance results in destroying the ability of the whole system to perform. And as system performance is degraded, it also degrades individual performance. When confronted with a situation that cannot be addressed at the individual level, but requires a collective solution, libertarians are in denial.

Examples:

• overgrazing on land destroys the land's ability to grow feed
• groups benefit more from getting more resources from a common organizational resource pool, but overload the common resource (e.g., quality, HR, reproduction services)
• individual engineering teams increase the electrical functionality of the system they're designing when they draw more on the electrical power system, but overall exceed the electrical system's ability to supply power
• firms benefit from economic activity that causes pollution, but increase negative health impacts for all
• developers profit from more development that uses common infrastructure, but overwhelm infrastructure

Their solution to this degradation of system performance is to simply, for example, "sell off the oceans." The rationale is that when individuals own them, the individuals will take care of them.

Then, in a display of illogic, this critic denies this "solution" requires a world government to force other nations to agree to selling the commons they use and to enforce the individual property rights. Further, this critic says that "You see only force.  I see negotiation, agreement and treaties between nations, not force." Note that this comment doesn't answer the question about what to do when some don't want to sell.

Besides, it's impossible to sell off all commons, for example, to "sell off the atmosphere," even if everyone wanted to sell.

Libertarians rely of the free market price mechanism to regulate supply and demand, but there are situations where price sends exactly the wrong mechanism to preserve the resource. For example:

• Overfishing depletes the fish stock and the ability of fish to reproduce. In this case as supply declines, the price increases. But a "market" signal of increased price leads to even more fishing and even more rapid destruction of the commons. The market sends a price signal in the wrong direction.

And the tragedy of the commons structure isn't just relevant to situations like environmental pollution. It integral to markets when there's inelasticity of supply and demand.

For example, it's relevant to farming.

• Every individual farmer comes to the logical conclusion that they can increase farm income by increasing the amount of land in production and by increased use of technology. But the increased supply in the presence of inelastic market demand (people only eat so much no matter how much price falls) decreases prices so that all farmers have less income. This results in calls for government subsidies and in small farmers being bought out by larger farmers (which does not decrease the supply of land).

There are two ways to deal with this structure:

• understand that overcoming this structure requires cooperation toward a larger goal that manages common resources and benefits competing parties
• apportion the expense of long-term collective loss to individuals or limit individual activity (grazing fees, fishing limits, land allowed in production, development impact fees)

Because libertarians attempt to rationalize away the inescapable need for collective approaches to deal with such a structure, there's little potential for reaching common ground in dealing it.

The "tragedy of the commons" is one of many systems thinking archetypes. For more see The Archetypes, Generic Structures & Examples.  Also, The Squeeze on Farmers explains the structural causes of increasing farm subsidies.