Republicans Feeling Sheepish About Property Rights for Fishing

In May 2012, a majority of Republicans in the U.S. House of Representatives voted to bar the adoption of new catch-share programs along the Atlantic Coast or in the Gulf of Mexico. In the process, the alleged party of free enterprise and limited government turned its back on a proven market-based approach to a serious environmental problem. (Learning How to Fish, p. 155)

PERC’s note “Learning How to Fish,” links to a 2013 UCLA Journal of Environmental Law and Policy article by Jonathan Adler on the benefits of catch shares. The article can be viewed online and downloaded as a pdf here.

Adler’s article begins with a discussion of how the federal government has systematically mismanaged the important Atlantic Cod fishery, and it’s latest step to impose further top-down regulations:

Over the strenuous objections of local communities and fishermen, the Council proposed 77% reductions in the allowable cod harvest for each of the next three years in the Gulf of Maine, and a 61% cut in next year’s cod catch on Georges Bank.2 The National Oceanographic and Atmospheric Administration approved the proposed catch limits and other “emergency” measures in May 2013.

Economists and many environmentalists understand that government regulation won’t work unless legal institutions align the incentives of Atlantic cod fishermen with the realities of the Atlantic cod fishery. Any wild fishery has a limited sustainable yield. Catching more fish each year than a fishing area can nurture will gradually reduce the fishery and fishing yield. It is not so complicated.

(Sustainable is an often misused word. Environmentalists and politicians often justify new legislation as promoting sustainability. In the case of fisheries this term is reasonable, although it is not always clear from year to year how many fish can be caught without reducing future yields.)

Politics can be more complicated than fisheries. Local fishermen are local businessmen whose assets are tied up in fishing boats and fish processing facilities small and large. When government fisheries authorities decide to reduce the length of the fishing season, or the number of allowable fish caught, that directly hurts today’s fishermen and and community businesses that have relied on Atlantic cod fishing for centuries.

Adler explains (and footnotes his claims) that wild fisheries worldwide have been similarly mismanaged, but that with new legal institutions the Atlantic cod fishery and others can be restored:

The hard choices being made in an effort to save the Atlantic cod fishery today are all too common, as policymakers continue to employ and rely upon failed conservation policies, leaving fisheries the world over poorly managed and under stress.12 By some measures, a majority of exploited fisheries are depleted or in decline.13 Even more troubling, new research suggests that those fisheries about which scientists know the least may be in the worst shape.14 Yet all is not lost—perhaps not even for the great Atlantic cod. These same assessments conclude that, with proper management, fishery yields could double while remaining sustainable.15 Proper fishery management can both conserve fisheries and maintain their value as a resource for human consumption. (p. 153)

Shifting legal systems is never an easy task and as G.K. Chesterton cautions, it’s better not to take down a fence unless you know why the fence was there. The case of catch shares and “fencing the fisheries” turns the quote around. Before setting up property rights for fisheries, it is reasonable to ask why fences of some kind were not already in place. The short answer is that they were in place where necessary.

Native American salmon fishing in the Pacific Northwest depended for centuries on established property rights to locations along rivers, where rules existed for families to catch returning salmon but let enough escape upstream to spawn. This property rights system was upended when traditional Native American system was overthrown.  Robert Higgs explains the history in “How Politics Ruined the Northwest Salmon Fishery” in The Freeman.

With most other wild fisheries, there were so many fish in the oceans that a few hundred or even a few thousand fishing boats had little impact. But as fishing technology continued to advance, and high-technology fleets of fish-processing ships began operations, wild fisheries could be and were quickly depleted. Steam-powered ships in the 19th Century allowed whalers to quickly and sadly slaughter most of the world’s whales.

Fences and other property rights systems are relatively expensive to establish, and it is rarely clear how to establish just and efficient property system that cause the least harm  For classic economic research on transitions to and from property rights systems, students can review the work of Harold Demsetz in this Literature of Liberty editorial and article. The editorial quotes from Demsetz’ research of property rights among Native Americans:

Forest animals confine their territories to relatively small areas, so that the cost of internalizing the effects of husbanding these animals is considerably reduced. This reduced cost, together with the higher commercial value of fur-bearing animals, made it productive to establish private hunting lands. Frank G. Speck finds that family proprietorship among the Indians of the Peninsula included retaliation against trespass. Animal resources were husbanded. Sometimes conservation practices were carried on extensively. Family hunting territories were divided into quarters. Each year the family hunted in a different quarter in rotation, leaving a tract in the center as a sort of bank, not to be hunted over unless forced to do so by a shortage in the regular tract.

Unfortunately, European immigrants usually ignored established Native America property rights systems both for animals on line and for fish along rivers.

I’ve mentioned in earlier posts that as population increases and hunting and fishing technology advances, legal systems need to adapt to prevent overhunting, overgrazing, and overfishing.

Douglass North and Robert Thomas in Rise of the Western World, give an example of a national system too slow to expand. As late as 1723, shepherd’s guilds, called mestas, gained exclusive rights for their migratory flocks to roam up and down Castile, a kingdom of Spain. This made life hard for farmers trying to raise animals and crops. And so agriculture was slow to develop in Spain compared to France, England and the rest of Europe. North and Thomas note that the ease of taxation was the key. Known sheep herders able to pay taxes now were more valuable to the state than farmers able to pay higher taxes in future. The future is always uncertain and governments are usually desperate for funds now.

Before the Habsburgs, the Mesta, discussed above [in image], constituted within Spain the financial backbone of the Crown. However, we are left to wonder why Ferdinand and Isabella did not follow the longer-run path of agricultural prosperity, which would have occurred had they curtailed the monopolistic privileges of the Mesta and encouraged the development of property rights in land for arable use. The answer is most concisely stated by Vives. (p. 128)[see image above right for Vicens Vives quote from Economic History of Spain, p. 294]

(Interestingly, this Time article notes that Spanish shepherds haven’t quite forgotten the old ways, and still have some rights to graze their sheep across Madrid.)

Fish migrate from place to place and if “hunt and gather” fishermen keep overfishing Atlantic cod and resist establishing better private property systems like catch shares, they will continue to suffer depleted fisheries and too-small catches.