MIA; plus, More on Fishing Rights
I was a lecturer at an Institute for Humane Studies seminar in Annapolis, Md., most of this week. I got back last night, but tomorrow I'm leaving for another IHS seminar, this one a bit closer to home (Pitzer College, about an hour's drive east of here). It's great fun conversing with bright, interested students about free markets, private property, and so on, but also very tiring and time-consuming. Hence the lack of blogging.
Tom Palmer, one of the other lecturers at the seminar, informed me that I may have been mistaken about how Iceland and New Zealand's fishing rights systems actually work. In a previous post, I said, "But the overall TAC [total allowable catch] is actually set on the basis of scientific analyses by some body of experts; and though [Ronald] Bailey doesn’t say where this body came from, I’m betting it’s actually either a government agency or a private agency with a government mandate." Apparently, I would have lost that bet. According to Tom, the TAC is set by the owners of the ITQs -- that is, the fishermen who own the fishing rights. If so, then my objection to calling this system privatization instead of regulation is not nearly as strong. Essentially, this system corporatizes the fishing industry, making all fishermen stockholders in a body that collectively owns the fishing region in question. This is potentially problematic because it creates a kind of government-sanctioned monopoly (every fisher is automatically a part of the collective fishing body), but that problem may not be significant if the collective competes against the fishers of other regions of the world -- e.g., the Icelandic fishing collective competes against fishers from New Zealand, the U.S., Japan, and elsewhere. Whether that's true or not depends on how global the fish market is, and I don't know the answer to that question. But in any case, the fishing-rights systems of Iceland and New Zealand appear to be a good deal more clever, and more market-oriented, than I gave them credit for.
Specifically, the corporatization approach gives the individual ITQ owners an incentive to set the overall catch optimally, because voting to increase the overall catch is not the same as voting to increase one's individual catch at the expense of others. Any decision about the TAC that increases the value of the whole fishery also increases the value of the ITQ, which represents a fixed percentage of the overall catch, and therefore the ITQ owners have an incentive to vote correctly -- an incentive that an independent regulatory body would not have.