For many libertarians, the most important argument for private property is what Garret Hardin has labeled “the tragedy of the commons” (though the basic idea goes back to Aristotle). Most resources are rivalrous—that is to say, the use of the resource by one person diminishes the amount, or the value, of that resource for others. If a rivalrous resource is also public property, meaning that no member of the public may be excluded from its use, there will be no incentive to conserve or improve the resource (why bother to sow what others may freely reap?); on the contrary, the resource will be overused and swiftly exhausted, since the inability to exclude other users makes it risky to defer consumption (why bother to save what others may freely spend?). Hence private property is needed in order to prevent depletion of resources.
It might be argued that this the-more-the-merrier effect occurs only with goods that are wholly or largely nonphysical, but could never apply to more concrete resources like land. As Carol Rose and David Schmidtz have shown,  however, although any physical resource is finite and so inevitably has some tragedy-of-the-commons aspects, many resources have “comedy-of-the-commons” aspects as well, and in some cases the latter may outweigh the former, thus making public property more efficient than private property.
For instance (to adapt one of Carol Rose’s examples), suppose that a public fair is a comedy-of-the-commons good; the more people who participate, the better (within certain limits, at any rate). Imagine two such fairs, one held on private property and the other on public. The private owner has an incentive to exclude all participants who do not pay him a certain fee; thus the fair is deprived of all the participants who cannot afford the fee. (I am assuming that the purpose of the fair is primarily social rather than commercial, so that impecunious participants would bring as much value to the fair as wealthy ones.) The fair held on public property will thus be more successful than the one held on private property.
Yet, it may be objected, so long as a comedy-of-the-commons good still has some rivalrous, tragedy-of-the-commons aspects, it will be depleted, and thus the comedy-of-the-commons benefits will be lost anyway. But this assumes that privatization is the only way to prevent overuse. In fact, however, most societies throughout history have had common areas whose users were successfully restrained by social mores, peer pressure, and the like.
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