Monday, February 9, 2009

A Fish Tale with a Lesson

I recently wrote about a proposal to establish fish farms in the Gulf of Mexico. Some critics of the plan argue that Congress should intervene and establish regulations for an industry that does not exist. I said that if Congress does get involved, the industry will probably die before a single fish egg hatches.

Now comes concrete evidence Congressional regulation isn't needed. An article in the New York Times demonstrates that what is really needed is property rights.

In the 1970's the Mexican government granted permanent and exclusive rights to fish the waters around Tiburón Island to an indigenous tribe called the Seri. In short, the Seri were granted property rights to the fish in those waters. An interesting development has occurred in the years since. Infiernillo Channel, which is part of the area they "own", now has the richest shellfish beds in the region. On the west side of the island, where others may fish, catches have declined to about 10% of their historical highs.

There is a lesson to be learned here, though it is doubtful that anyone in power will get it. The Seri had a long-term interest in maintaining the value of their asset. Rather than succumb to the "tragedy of the commons", the Seri limit their catches to a sustainable level. They have assured themselves of a consistent and ongoing catch. And they did this because they own the asset.

The "tragedy of the commons" refers to resources that are not privately owned, but used in common with others. Each individual has a motivation to make the most use of the resource--such as grazing livestock or catching fish. But if each person does this, the resource is quickly depleted, to the detriment of all. And if one (or more) individual exercises restraint and thinks long-term, others may simply use up his "share" and the resource is still quickly depleted.

However, when a resource is privately owned, the owner has a selfish interest to make the resource last, and this is particularly true when the resource is renewable, such as fish or grass. Rather than grab as many fish as he can today, he leaves enough for the resource to replenish or even increase. He manages his harvest to maximize his long-term return.

Recognizing and protecting property rights in the ocean's fisheries would eliminate the "tragedy of the commons" and would lead to significant increases in the available catches.

Of course, assigning property rights would be a complex process, particularly since fish are transient creatures. But the complexity of an issue does not justify ignoring it--defining the criteria for establishing property rights is one of government's most important functions. And it would require something seriously lacking in our political leaders--rational moral principles and moral certainty.

The Law of the Sea Treaty (LOST) was conceived in 1982 by the United Nations as a method for governing activities on, over, and beneath the ocean's surface. One of the principles of LOST is that oceanic resources should be shared among all mankind and cannot be claimed by any one nation or people. It mandates that any corporation exploiting ocean minerals must pay huge annual fees and a percentage of its profits. (It is tempting to say that those who conceived LOST are truly lost at sea, but I will resist.)

This blatant Marxism is the intellectual climate in which a government would need to identify and assert property rights. To do so in the face of the inevitable international whining would take moral conviction--and little else. It would take a government that held and could articulate rational moral principles. It would require a government that would tell the world what we are going to do and why, and then be unconcerned with what anyone else thinks.

This is precisely what our Founding Fathers did in the Declaration of Independence. They stated their reasons for breaking with Britain and the principles that underlied their actions. They did not ask for the world's approval or consent. Of course, they were moral giants and men of great character.

Our government should take a similar approach in regard to fisheries. Tell the world the principles that we will follow to establish property rights. Tell them that our military will protect the rights of Americans as well as their property. Tell them that if they don't like it, they can kiss our butt and the camel they road in on.


Burgess Laughlin said...

With a particular example as a demonstration, you have ably sketched the productive power of individuals operating from property rights and the underlying ethics of long-term rational self-interest.

You mentioned the role of a military in protecting rights. Perhaps in a future article you might also discuss the role of an objective judiciary enforcing objective laws dealing with property rights. There is, of course, no free market if there is no protection of rights under objective law--both civil and criminal.

Brian Phillips said...

Without an objective judiciary the military is effectively castrated. And the legislature can run wild.