Friday, July 29, 2011

What would 'Party X' do about the environment? - PART 6: A fishy story

IMAGINE A ‘PARTY X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.
    Here, in several parts, are the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.

Yesterday we started depoliticising the commons. Today, we finish the job: here’s how to de-politicise the fisheries

New Zealand’s fisheries are at present what’s known as a “managed commons,” a system in which the tragedy of the commons is limited only by bureaucratic management of the fisheries—which is effectively held in common by all those who own fisheries quotas, and managed by bureaucratic fiat.

While it’s been applauded by some who should know better as a system bringing property rights to the fisheries,  the Quota Management System is in fact nothing  more than system of rationing by bureaucrat, with no incentive for the bureaucrats who set the level of rationing to get it right, nor for quota holders to maintain the resource.

The result has been politicisation of the fisheries, short term thinking from fishermen (rational in the circumstances), and pressure for even more government control of local fisheries to fix the very real problems created by so-called “deregulation.”

I suggest we need a rethink.

The best way to protect fish stocks and to protect the legitimate interests of fishermen is not through rationing but through property rights. We know that when property is secure that property owners tend to look to their longer term interests: no reasonable property owner wants to destroy the goose that lays his golden eggs.

When property rights are insecure however (as they are with Individual Transferable Quotas, whose value can be wiped out at the stroke of a Minister’s pen) the situation is reversed: the greatest incentive with the short-term horizons created by insecure property rights is to grab what you can while the going is good. So it’s no surprise then to see increasing reports of bottom trawling and bucketfuls of bycatch, and scary reports of decreasing fish stocks and decimated fish stocks. Such is the inevitable result when incentives favour short-term thinking.

The answer is not more politicisation, but less.

THINK ABOUT IT FOR a moment. Native birds face extinction, and fish stocks are reported to be running down. Meanwhile, there is no immediate likelihood of dairy or beef cows becoming extinct. The difference? In the former cases, there is no long-term incentive for private individuals to harbour the resource; whereas in the latter case, where farmers’ property in their cattle is protected, they have an enormous incentive to protect the value of their property—in the case of breeding programmes, right down through several generations.

That’s the whole difference in a nutshell. Protect property rights properly, and you set up “mirrors” reflecting back owners’ behaviour—and incentives to nurture and protect rather than smash and grab.

Farmers have historically protected the property in their stock and crops with methods such as barbed wire, brands and enclosed paddocks—and their development created a revolution in food production that saw the world’s population explode.

Obviously, none of these methods of protecting farmer’s property in their stock works very well with fish. (Certainly, shellfish can be tied to a stake, for which water rights and seabed rights are necessary, but few fish show much concern about swimming past a few barbs on a strand of wire.) But the difference is only technological:  and giving fishermen an incentive to develop the necessary aquatic equivalents is key.

What a responsible Party X would do is not to say how and why a property right in fish would be recognised in law, but invite fishermen themselves to develop the technology to do that—and incentivise the development by promising firm protection in law for whatever method is proven to work.

In other words, give fishermen the opportunity to show reason WHY their ownership in a particular fishery should be recognised in law, and HOW the ownership may be recognised and protected.

A Party X offering this would be using the power of good law to promote the technological means by which good law could be brought to bear on the problem.

THINK ABOUT THE DEVELOPMENT OF property rights in cattle, and how technology helped: The use of cattle brands was the first simple method enabling cattlemen to define ownership of their stock, which it was the law’s job to protect, allowing them to plan and to grow their herds ‘sustainably’ in the full knowledge that their investment in the herd was protected. The better the legal protection, the longer term the investment and the planning that could be done—hence the reason that cattle rustling was treated so severely in the days before barbed wire.

The invention of barbed wire revolutionised farming, allowing farmers to protect and define both their stock and their land across huge areas, allowing them to plan ahead and to protect both their herd and their land ‘sustainably’ in the full knowledge that their investment in herd and land was protected.

Both inventions enabled the legal technology of property rights to be brought to bear to protect first the resource (by means of identifiable brands) and then the environment (by means of barbed wire). What’s needed now is the same thing to happen with the fisheries.

If every fishermen’s interests in his own fishery and fish stocks are safeguarded, then every incentive exists for them to take the long term view. Why would you bottom trawl or in any other way damage your own highly valuable property?

What’s needed with the fisheries is the maritime equivalent of brands and barbed wire so that fish stocks and fisheries are protected by those who have the most interest in protecting them: the fishermen themselves. What’s needed is technology. Political parties don’t invent technology. They can’t. But what they can do is offer the protection of property rights to those who do.

I suggest the best way to obtain what we want here is to invite the fishermen themselves over, say, a three year period to present methods either technological or otherwise by which their own interests in fish and fisheries may be objectively recognised and protected in law, and then commit to enact that protection. I predict an explosion in fish stocks, the depoliticisation of the fisheries … and a big export market in the technology produced.

[Tomorrow, Part 7: A Kyoto Plan with a difference]

* * * * *

THE SERIES SO FAR:
INTRO: 'What Would 'Party X' Do About the Environment?'
PART ONE:
Un-taxes
PART TWO: 'A Nuisance and a BOR.'
PART THREE:
Making Life Easier for Small Consents
PART FOUR: “Iwi then Kiwi” - A Unique  Privatisation
PART FIVE: A Very Special Carbon Tax
THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'

2 Comments:

Anonymous Daniel Bell said...

Have you heard about the plans to place these turbines at the head of the Kaipara harbour in order to generate electricity from the strong tidal flows in the area? The local charter operators and recreational and commercial fisherman are kicking up a bit of a stink about it because they claim these turbines will cause tremendous damage to not only the harbours fish stocks but the entire west coast of the north island as this harbour is a huge breeding ground for species like Snapper and sharks. If the protesters are right, do they have any type of property rights claim here do you think?

7/29/2011 03:17:00 pm  
Anonymous Anonymous said...

some of those principles are being tried in the Marlborough sounds, and they are working well. The salmon farmers there now have auto feeders that count pellets dropping through the water below the level where the fish swim. Previously it was a hit and miss affair and farms just dumped feed out there, wasting it, and causing seabed pollution from pellets, which would increase algal bloom issues.
Typical of Labour's jackboot approach to any the industry then had a moratorium put on it, so no new farms could be created.
Some fish farmers are then having their farm consents taken off them.
I heard of one aquaculturist who artificially reared stocks of fish in tanks and was so successful that he managed to create a crop worth $1m and was able to replicate the process 3 times in a year. But he had his license taken off him because he was too successful, and so was deemed to have gone from researcher to commercial fisher. His farm was being monitored independently by the Marl council, and he had no issues with pollution, and his product was healthier than the native stocks.
Losing this license cost 4 people their jobs, and he lost $1m in research expenditure. The moratorium has meant he can't even step the farm back up into commercial if he wanted to, simply because the govt aren't allowing more licenses to be issued. go figure! (this fella has strong iwi links too... and was employing previously unemployable types... they of course are back on the govt tit)

This of course all leads to the conclusion that its just too hard, you pull the pin and go somewhere that actually wants your business, like chile or Sth Australia

(and we wonder why their aquaculture earnings have grown from roughly 500m to over 5b)

if only we could feed the jackbooted one to the fishies

7/29/2011 04:09:00 pm  

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