I’m in Malta now at a conference on economic advice to fisheries management, and one of the recurring themes is the loss of jobs when the same amount is caught by ever fewer, but bigger vessels. It is one of the major arguments against ITQs: when you make quota freely tradeable they end up in the hands of the firms that are willing to pay more for catch quota than other firms. That is because these firms expect to catch the same amount at lower prices, for example because they have economies of scale. So it is not surprising that these firms are usually bigger, and therefore ITQs tend to concentrate in the hands of a few large-scale firms and vessels, at the expense of small-scale ones. Should we care? Rögnvaldur Hannesson triggered a fair amount of debate stating that the best that governments can do is to set the Total Allowable Catch and let the industry figure out how to catch it, by whom, with what gear, and when. This was not exactly unexpected: Hannesson has written a book called “The Privatization of the Ocean” and I have heard him make similar arguments at other conferences. But I must say I’m undecided.
The main argument in favour of the hands-off approach is efficiency: we catch the same amount at lower costs. Moreover, no economy is set in stone: change happens (Chris Costello made a similar statement), and one of the drivers of that change is that some firms lose out to firms that do stuff better. The Netherlands had a thriving textile industry in towns like Tilburg and Enschede, but all of this has disappeared as most of the industry moved to low-wage countries in Asia. The same happened to our coal industry in the province of Limburg as coal could not compete to other energy sources. We have not protected those industries (we probably could not have done so anyway), but of course we do offer a social safety net to the people who lost their jobs. Farms are another example: they become bigger and bigger all the time, with only zoning and environmental regulations to stop them. Why should fisheries be any different? Moreover, arguments of employment are misleading. “Jobs are costs,” economists like to say: employing many people in a fishery, when those same people could have been productive in other sectors like plumbing, farming, or baking bread, is a waste of human resources.
The argument against the hands-off approach is that many local economies depend on fishing for employment and income. Jobs do have opportunity costs, but when the alternative is that former fishers sit idle on the shore, collecting welfare payments and getting quite frustrated with writing yet another pointless application letter, you can wonder whether the cost savings justify that sort of misery. Jobs are more than a way of earning an income: people derive their self-worth from them, they are people’s way to meet other people, to be not only economically, but also socially active. Closing the coal mines has been disastrous for mining towns in Limburg, and even more so in England (most of the celebrations of Margaret Thatcher’s demise were in former mining towns). As farms become bigger and fewer, villages are losing inhabitants, as well as shops, in an ever more miserable downward spiral. This process can be stopped or slowed by regulating ITQ trade, for example to make sure that quota remain in a particular region, or that some of them are owned by local small-scale fishers.
But then again, where does it stop? Should governments decide what a fisheries sector should look like? But if we do so for fishers, why not for farmers? Aquaculture? Shops? Shoemakers? Should we have protected telegraph operators from the pernicious impact of telephone?