Several hundreds of years before Adam Smith wrote his seminal work “The Wealth of Nations” (full text ), England wrestled with the Problem of the Commons, which is the title of a book by Gordon Marshall.
“The use of commons (publicly available land on which farmers graze their cattle) becomes a problem when one such farmer reasons that he or she can expand his or her herd since this small addition to the total stock will contribute little harm to the available pasture. However, if other farmers reason likewise, these incremental additions to the stock using the land lead to overgrazing and thus the destruction of the resource itself. In other words, if each individual in this situation rationally pursues his or her own short-term interest while disregarding others similarly pursuing theirs, then the long-run consequence is that everyone loses their share in the collective resource.” (GORDON MARSHALL. “Problem of the Commons.” A Dictionary of Sociology. 1998. Encyclopedia.com. 23 Sep. 2009)
Communism and other forms of collectivism try to solve this thorny problem by eliminating one of the sources of the conflict, private property. In an ideal form, free market capitalism denies the existence of the commons, thereby eliminating the other source of the problem.
Between those two extremes lie various attempts to form societies to manage, not solve, this enduring struggle, allowing the two competing interests of private and public to wrestle.