The 50 Ideas that Shaped Business Today

Government regulation

In classic economics, the “tragedy of the commons” is the proposition that individuals acting in their own self-interest will foul or deplete shared resources. Outside intervention, the theory goes, is necessary to protect the things that benefit everyone but are owned by no one.

The late 19th century provided ­dramatic demonstration of the principle as rapid industrialisation transformed Europe and North America. Innovations flourished and vast ­fortunes were made – but pollution fouled the air, workers had to toil in appalling conditions and dangerous products were foisted on an unwary public.

The catastrophic 1911 Triangle Shirtwaist factory fire in New York led to a wholesale revamping of occupational safety regulations, ...