The Global Idea of the Commons - Essay Example

A TRAGEDY OF THE COMMONS (Overfishing) of (affiliation) Business Ethics and Economics Date Submitted: November 18, 2014 Introduction The environment has taken a beating for the past few decades due to the needs of a fast-growing population. The environment is supposed to be for the benefit of all humankind but the way natural resources are being exploited has benefited only a select few in most instances. The global warming phenomenon has adversely affected todays weather patterns leading to droughts, floods, rising sea levels, and the extinction of several species of flora and fauna. It has taken new sense of urgency to do something about the way the environment is being treated especially with many unsustainable practices. The alarm has been sounded and there is an intense on-going and highly contentious debate between advocates of conservation and preservation. The exploitation of natural resources includes forest products, minerals, water sources, and marine resources. Economics plays a big part in the way resources are exploited and used as economics is largely the study of scarcity and how to best distribute income and wealth. In this respect, economics as an academic discipline tries to find the best ways for equitable distribution. No matter how abundant a resource may seem, there is always the feeling that nothing is enough. This is because resources are finite while human wants are unlimited. Economics is a social science like psychology and sociology; it deals primarily with human behaviors (Frey, 1999). Man is by nature a social being, meaning no man is truly independent but is dependent on fellow human beings for survival. Men in prehistoric times up to the present day are always in a state of interdependency and this reality carries with it an implicit understanding that resources are for the common good for present and future generations. This paper examines and discusses a dangerous and impending disaster in one area of the global commons: overfishing. Discussion Many common natural resources were once thought to be inexhaustible because these are renewable. An example is potable drinking water but harmful human activities like the use of chemicals and fertilizers have polluted many water resources and so there is now a growing and serious supply constrains of drinking water. This is the same situation with marine resources and in particular fish stocks. Fish was once very abundant and a fisherman could catch fish near the shores, then as near-shore fishes dwindled, the fisherman goes further out to sea, and as fish had dwindled some more, many fishermen now venture out to the deep blue ocean. This problem is now slowly being recognized with a global campaign to stop illegal, unreported, and unregulated (IUU) fishing. This particular problem illustrates clearly the issue of free-rider concept. Free rider in economics pertains to a person who does not pay for the cost of a good but still benefits from the use of that particular common resource, public good, or service. Examples include an employee who is not a union member and therefore did not pay union dues but still benefits from a collective bargaining agreement or a citizen who is protected by the police in a community but did not pay his correct taxes, in effect benefiting from police protection but at a much lower cost to himself. Free rider situations are a persistent and pervasive problem. The free rider phenomenon is a common problem and is also closely related to another economic concept which is that of a public good. In the context of economics, a public good is a resource, service, or benefit which even if consumed is not reduced by the consumption and this is further defined as non-exclusive. So in this sense a public good if consumed does not reduce its availability for others; examples are street lighting, information, knowledge, and fresh air. Fish stocks in the worlds seas and oceans are a good example of a global commons but it is being depleted fast by illegal, unreported, and unregulated fishing. Although countries today have exclusive economic zones extending several miles out into the ocean as part of territory and includes exclusive fishing rights, the problem is not as simple as it seems. Many fishing fleets in many parts of the world catch fish in an overly-efficient manner such that fish stocks are not given enough time to replenish and repopulate. Since no country owns the oceans exclusively, it is a clear case of a free rider problem as some countries benefit while others engaged in marginal fishing practices are put at a severe disadvantage. Countries with more efficient and modern fish fleets can catch more fish at lesser cost to themselves but at the expense of poor countries. Fish stocks are not within the purview of public goods and therefore a fish catch will be detrimental to other countries who also need cheaper sources of protein from fish. It is not in a way non-exclusionary because it is a zero-sum game; an increased fish catch by one country will reduce the amount of available fish for all the other countries who have fishing fleets. All things considered, IUU fishing is a high-profit undertaking and this in turn encourages overfishing. The reduction in fish stocks increases the price of fish in a bad cycle of overfishing and profit-taking. Many countries are now cognizant of this free rider situation and had taken steps to stop it. Among the measures taken by the countries with a significant economic stake in healthy fish populations are regulating fishing by issuing licenses and by not buying fish species that had been identified as endangered. Regulation by licensing necessitates a trade-off between freedom to fish and the need to avoid environmental degradation of marine resources. A civilized society requires individuals and nations to give up some rights in exchange for mutual protection. A remarkable breakthrough in genetic mapping is the ability to identify fish stocks that come from specific areas of the ocean. This genetic technology even identifies a particular fish catch as coming from a specific area that has been designated as off-limits during certain seasons of the year. For example, salmon caught in the Atlantic during off-season months can be clearly differentiated through genetic mapping from salmon caught in the Pacific during open season. This technique allows for countries like the United Kingdom and the European Union to ban importing salmon if it was caught in the Atlantic in off-season periods to discourage IUU fishing. Fish stock identification method is now increasingly adopted (Cadrin, Kerr, & Mariani, 2013). In the European Union, member countries had adopted the Common Fisheries Policy (CFP) to ban importation of overexploited fish species and avoid free rider problems (CORDIS, 2013). The combined use of regulating fishing through licensing and use of genetic mapping methods avoids the introduction of an externality when overfishing happens because if fish catches are dwindling, the price of fish goes up for everybody although only a few countries had benefited from overfishing but everyone suffers as a result. The abovementioned externality is a negative one but strictly regulating fishing in the worlds oceans will produce a positive externality, this time in renewed sustainability of endangered species and prices go down. Many national populations depend on fish because it is a cheap source of protein and an increased fish supply will avoid a global tragedy of the commons. Further, reducing the IUU fishing of other countries through stiff fines, penalties, and economic sanctions through import bans will help to discourage this maleficent practice that drives fish stocks to extinction. The producer surplus inherent in IUU fishing is removed or reduced for the benefit of all people. Greedy fleet owners will no longer be able to enjoy their enormous producer surplus as IUU fishing encourages a vicious cycle of catching rare or endangered species because of higher prices that in turn make these owners catch more of the same species. A producer surplus in IUU fishing is a corollary to the free rider problem because only these owners will benefit while the rest of the world population suffers from ever-increasing fish prices as supplies are depleted. The producer surplus concept in economics has enormous application in fisheries because if nothing is done to stop IUU fishing practices, there will be mad scramble for the little available fish. This concept is best illustrated in the simplified graph below that shows producer surplus: (Source: Investopedia: Definition of producer surplus. Retrieved from http://www.investopedia.com/terms/p/producer_surplus.asp). Producer surplus as simply defined refers to the additional revenues a seller or producer earns from selling a product or service than is otherwise warranted. In the above illustration, the producer surplus is encompassed by the triangle above the diagonal supply curve of a producer. Most fish catches, especially of tuna or salmon, are sold in auction to the highest bidder. So in a sellers market (fish supplies reduced), the triangular area in the graph will increase markedly. An impending tragedy of the commons is the perverse result of Adam Smiths “invisible hand” economic theory which states an individual person striving hard to improve his own lot will eventually improve the whole society. A fisherman who wants to catch more fish so he can earn more will end up destroying and degrading the fishery stocks on which his very livelihood depends upon. Carried to the extreme, this individual striving results into what the economists at the World Bank had termed as the “Pakistani Paradox” (used mainly for its mnemonic rhyme) in which a poor Pakistani farmer tries to have many sons who could later on help him on the farm. However, the family farm is of limited size only due to scarcity of arable land and this small plot of land gets subdivided into smaller and smaller plots as inheritance in succeeding generations. The end result is making things worse off for everybody as less fertilizer is used to save on costs, there is no inter-cropping to restore soil vitality and no sufficient time allowed for land to fallow. The soil is eventually eroded and it further loses its fertility resulting in lower crop yields. This type of subsistence farming, like overfishing, is a bad example of the “invisible hand.” Conclusion Capitalism is beneficial up to a certain extent beyond which the government has to step in to avoid excesses like overfishing that results in a tragedy of the commons. The common-pool resources of fisheries can endure for extended periods of time if taken cared of in what Nonini had termed as a sense of good stewardship by holding these vital resources needed for survival as merely in-trust for present and future generations (Nonini, 2006). Over-efficiency in harvesting fishery stock results in a global tragedy and does not serve well the economic objective of equity. Governments must cooperate to preserve fisheries and balance freedom with regulations. References Cadrin, S. X., Kerr, L. A., & Mariani, S. (2013). Stock identification methods: Applications in fishery science. London, UK: Academic Press. Community Research and Development Information Service (CORDIS). (2013, January 18). Fish population structure and traceability. European Commission. Retrieved November 17, 2014 from http://cordis.europa.eu/result/rcn/56107_en.html Frey, B. S. (1999). Economics as a science of human behavior: Towards a new social science paradigm. Norwell, MA, USA: Kluwer Academic Publishers. Nonini, D. M. (2006). “The Global Idea of the Commons.” Social Analysis, 50(3), 164-177. Read More