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post-autistic economics
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issue 27
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Fisheries
management: Hijacked by neoliberal economics* © Copyright 2004 M. Ben-Yami This is a story about a fashionable political-economic ideology that
has taken over the management of many fisheries. It happened as a
matter-of-fact offshoot, sort of by-catch, of the neoliberal
or neoclassical paradigm. In the beginning fish were aplenty and
there were no rules upon the face of the deep, and the spirit of free access
moved upon the waters. And the fishermen saw that it was good and fished as
many fishes as they needed to feed their families and their neighbors. But people were multiplying and replenishing the earth, and more and
more fishermen had to catch more and more fish to meet the demand of the
ever-growing humanity. And governments said: let
there be management, so that there would
always be enough fish left in the seas to procreate. And they limited the gear, the vessels’ size and numbers, the duration of fishing seasons, and the
access to some
fishing areas, and they called it input or effort regulation. But, the fishermen kept
fishing and their fleets kept growing, and the governments saw that it was
bad. So the governments made the licenses, and their scientists
thought up the “maximum sustainable yield” (MSY), which was the amount of fish that could be safely extracted, and they made the “total allowable catch” (TAC) for each sort of fish in the sea. But the fishermen kept competing, and
over-capitalizing, and the fish became scarce. And the economists said
unto the governments: let there be property rights. And they spawned
“individual transferable quotas” (ITQs), which were rights to catch the given quota of fish that the
fishermen could buy from each other. And they believed that it is good and said unto
the fishermen: Behold, rights’ privatization is your salvation. And the
governments sent the ITQs upon waters to replenish
the seas and subdue all fisheries. And it was good. This is more or less the gospel, which prevails throughout fisheries
administrations in many countries. It
made some people richer and so they became its devoted believers and
supporters, while the many made poorer, or afraid to become so - its adamant
opponents. And in almost every single case the consequence is continuing
concentration of fishing rights in fewer and fewer hands, often enough in the
hands of major corporate interests, at the expense of small-scale, family,
and skipper-owned fishing operations of one or two small or even medium-sized
fishing vessels. Fisheries management is supposed to look after the health of the
fish resources exploited by fishermen. This requires knowledge of fishery
biology and ecology, population dynamics, and historical data of the fishery
and of environmental and associated stock fluctuations in its area. As
fisheries management can only manage people, it entails negotiations,
legislation, technology, and enforcement. There's a whole catalogue of
management systems and technical and administrative methods that managers can
use to try to achieve their targets. Traditional management
replaced. Old-type management by tribal and community
leaders and local fisherfolk’s organizations based
on traditional knowledge of the resource and traditional justice, is now
almost totally extinct. It has been replaced throughout most of the world by
bureaucratic and technocratic mechanisms heavily influenced by political and
economic considerations that, while interested in fish as marketable
merchandise and a source of profits to the operators, have only little to do
with safeguarding the resource as a source of income to fishing people.
Fisheries management has thus become a power play over benefits from the
resource. Stakeholders are many, starting with fishing people and local
interests in fishing communities, through recreational fishermen,
environmental lobbies and coastal development interests, and ending with
powerful corporations and market forces, whether local, national, or
multinational. The political
attitude of the powers in charge determines the choice of the management
system and how it is applied through licensing that controls fishing
capacity, quotas allocation, or limits set on effort. The system chosen
determines the distribution of the benefits derived from the resource to the
different stakeholders. For example, allocating fishing rights (and hence
benefits) to a large number of small-scale fishermen would call for different
management methods than allocating them to a large company. Neoliberal
economics invaded management of various commons and national resources as an
extension of a dominant paradigm -
though very much at issue - in
the industrialized world. Its gospel is being spread over the world and its
political, financial, and academic institutions by troops of disciplined
economists, rewarded for devotion, and punished for dissent. So, what is this
neoliberal or neoclassical teaching in economics
that has also impinged on fisheries? And on what basis are its devoted adherents
preaching that theirs is the only way society can take to utilize its fish
resources in a feasible and efficient manner? The old “classical”
economic teaching has introduced the belief in the “invisible hand” guiding
rational individual decisions driven by self-interest eventually into an
optimum economy, in which free market forces are taking care of all aspects
of peoples’ life. An implied outcome
of such “free play” is that any financial profit derived from a common,
fully, partly, or quasi-privatized resource, would somehow trickle down and
redistribute itself all over the society. But this is a myth and a fallacious
contention, if not an outright lie. It is common knowledge that, in most of
the world’s countries, a big share of such benefits indeed trickles down, but
to various investments abroad, and to imported luxury products and services.
The “trickle down” theory can approach the real situation only in a few rich
countries, where profits feel secure and investments promise further
accumulation of capital. Criticism. Recently, more and more economists and other social scientists
started casting doubt on the neoclassical gospel,
nicknamed by some “autistic economics”. Awarding the 2002 Nobel Price
in economics to two professors, one of them a psychologist, who refuted the theory that, as a rule, individuals make
rational economic decisions, reflected this growing criticism. Economic
determinism inherent in the neoliberal theory
doesn’t work; the markets’ reaction to prices, the prices’ reaction to the
dynamics of supply and demand, and peoples’ reactions and economical
activities don’t fit that theory’s assumptions. Hence, its weakness in
economic analysis and forecasting. Some economists and
other social scientists argue
that, contrary to its pretense to scientific, objective approach, neoclassical economics is in fact a
social-political narrative and a methodology used by global economic and
political interests to concentrate power in the hands of corporate national and multi-national
institutions. Thus, individual
businessmen and small and medium-scale private enterprises, not to speak of wage earners,
are losing their influence on socio-economic
decision-making to powerful commercial-industrial centres and their collaborators in
governments. This transfer of power is promoted, legislated, and executed through
democratic processes occurring within the existing legal framework with the
help of well financed journalistic and media campaigns and more or less biased scientific publications, with the neoclassical economic narrative serving as a tool for achieving
explicit goals as well as hidden agendas of its promoters. Thus, the “invisible hand” has been
transformed from the sum of
the multitude of individual decisions into the sum of the political and economic decisions of
powerful interests. Profit maximization. Neoclassical economics
are supposed to aim at and produce maximization of social and national benefits, which in fact are dollar equivalent measures of how economists
value goods and services (including non-market goods and services). It
preaches maximization
of profits or rents often attained at the expense of heavy social costs. The big question is how these costs and benefits
are defined and calculated; since social costs are very difficult to estimate, any portrayal of
economics as an absolute, scientific methodology is simply fallacious, and honest economists
admit that they cannot adequately calculate all social benefits and all
social costs. It is obvious that losses incurred through
forfeiture of alternative actions, and due to various social, and other
external costs, many of which cannot be evaluated in terms of dollars and
cents are a part and parcel of any economy. As long as we are not taking into
account all the costs and benefits resulting from production and market
fluctuations, various management steps, defaults to act, social, economic,
and cultural dislocations of people and their ramifications affecting coastal
communities, as well as other "externalities" difficult to express
in monetary terms, we are unable to calculate true net social costs and
benefits. Social benefits. Many people associate the term "social
benefits” with how benefits derived from national resources are distributed
across the society. They ask, for example, how many people make a living from
a certain resource. A “less efficient” small-scale fishery that employs many
more people than an “efficient” big-owner fleet, may feed less monies to the
"national purse", but as a rule is directly and effectively more
beneficial to people and their communities. Only an in-depth analysis can
establish which option would produce truer national benefit values. Thus, it is quite consequential who defines
national and social benefits, and how. For example, calculation of net national
benefits for an industrial shrimp fishery in a non-industrial country must
include a deduction of the costs of all imports, such as expatriate manpower, fuel and lubricants,
vessels, deck and propulsion machinery,
processing and refrigeration equipment, and fishing gear, as well as insurance and maintenance costs incurred
in foreign-currency. In some cases,
the only net benefits from an industrial shrimp fishery in such countries are the revenues from license
fees and the employment of nationals,
while a major share of the proceeds for the shrimp exported is going abroad, along with the product. Policy costs. Therefore, responsible resource managers
along with responsible economists must openly account also for the values
that are non-financial/commercial, and the diverse peripheral socio-economic,
political and cultural costs, as well as the taxpayer's money needed for
dealing with human problems resulting from management decisions. Only then
would the society and its governments be informed of the true costs of
any policy proposition leading to allocating their natural resources into the
hands of a few. Nowadays, such transfers are facilitated by governments’
obsession with privatization as a panacea to all maladies of the economy. The neo-liberal
gospel preaches that practically nothing can work efficiently, if it is not
somebody’s private or corporate property. The massive ideological
privatization practiced in some countries has embraced also such natural
resources, as water, forests, various energy sources, and public transport.
Even economically viable, and efficiently run national resources are often
falling victim to the privatization Moloch. How
wrong this ideology can be has been recently well illustrated by a whole
series of flops of some mammoth privatized and corporate companies, due to
both, mismanagement and corruption, as well as by the rather disappointing
results of the privatization of the British railway system. “Swissair”, “PanAm”, “Enron”, and other recent bankrupt giants have
not been run by governments. One consequence of the domination of
neoclassical economics is the rather obscure struggle between free
enterprise and corporate interests. In the past, the conception
of capitalism and free market used to emphasize
private initiative. Nowadays, however, it isn’t necessarily so. The
neoclassical economics is leading to a regime in which major businesses and
corporations are gradually displacing smaller-scale enterprises and
businessmen, and which is indifferent towards the social conditions of
working people. It is “happy” when supply of labour exceeds demand, because
unemployment depresses wages and improves profits. Sometime ago, after the
demise of the Soviet system, one would think that free enterprise had won.
One is not so sure nowadays. Like the Soviet monopolistic concerns, some of
the giant companies of the "capitalist" world are run by
exploitative bureaucracies supported by ideological economists, who seem to
consider small and family-owned enterprises a noise and a nuisance in their
concept of "economically efficient" world. Invasion.
The invasion of fisheries by the neoclassical economics has been a logical
consequence to its domination of the global, and many national economies.
Like many historical invasions, it was partly invited from inside the
fisheries and given a friendly reception by large-scale interests and their
proxies in the management mechanisms. Once in, it seems to be here to stay,
especially in all those countries where, for various reasons, it is not met
with strong opposition.
What brought this
ideology into the fisheries is its claim that privatization is the most
efficient, if not the only mode of exploiting a resource. This, even if the
resource belongs to the whole nation, as is the case with water, forests and,
for that matter, fish in the sea. Input control. When, following the Second
World War, the spiraling growth of fisheries brought about the need for
management, it was initially based on, so called, “input control”. This
implies regulation of fishing effort through such means as limited access,
fishing time and areas, as well as other regulations that try to follow
biological characteristics of the species involved. In some countries this
management system still works well enough, in others it has been deemed,
rightly or wrongly, inadequate. Fish population dynamics models have been
used to estimate the biomass of fish populations and, consequently, the
fixing of TACs. In some fisheries this led to
highly competitive “gold rush” fishing operations and investment in
excessively strong and fast vessels. The next step was dividing the TAC into quotas that were allocated to vessels, usually,
according to their fishing history. And this was the moment when the
neo-liberal economists stepped in with a new pattern: marketable fishing quotas (ITQ). Property rights. They axiomatically promoted a theory that property rights and maximum benefit and efficiency spelled out
in financial terms are a must for rational exploitation of fish resources.
Since property rights are characterized by (i) security,
or quality of title; (ii) exclusivity; (iii) permanence, and (iv) transferability, their application in fisheries
boils down to ITQs. Thus, mere "fishing
rights" have
become "private property rights”.
But trade in fishing rights
eventually must hit the weaker stakeholder. Initially, the richer vessel owners or their covert sponsors
accumulate quotas by buying off the weakest boat owners. Governments enhance
the process by allocating individual quotas too small to pay a single vessel owner’s way out of the red, on one hand, and by pricing licenses and
quota entitlements above the value of his/her fishing boat and gear, on the other. A
quota gone from a fishing community is gone forever, together with all the
associated jobs, services, and income. If it were not for social opposition, a worldwide adoption of ITQs
would have proceeded faster. Concentration. Since marketable quota systems favour the
financially stronger,
they invariably lead to a gradual displacement of small-scale individual or family-owned
fishing enterprises, and sooner or later to the concentration of fishing
rights in the hands of a few, either specialized fishing companies, or large
holding corporations for whom fishing may be only one branch of a
multifarious business. Such concentration eventually
would occur even where there are legislative attempts at stipulating acquisition of quota by some
maximum values. Hence, there
is a growing concern of "privatization by stealth". It is
incredible that managers introducing this system into
small-scale or mixed fisheries would be unaware that its social, economic,
and political ramifications favour large-scale business at the expense of local fisheries and
processing industries, and small-scale operators, and threaten the survival of the small-scale
fishing sector. ITQs tend to depress artisans and
effectively exclude part-time participants in local fisheries, favour the
owners, while disregarding crewmembers. Hence, selection of ITQ for such fisheries must reflect the political and social attitudes of the respective government. Green
non-governmental organizations (NGOs) have willy-nilly contributed to the
privatization trend. Although some of them, as for example Greenpeace, have
joined protests against the tradable quotas system, there have been NGOs’
with often-exaggerated and sometimes even fallacious alarmist publications as
to the state of fishery resources painting fishermen as the main culprits,
which fuelled the neoclassical economists’ fires. ITQ
advocates have claimed that only management systems based on that or other
forms of resource privatization would maintain fish stocks on sustainable
levels. Their main
argument was: “If fishing interests are allowed to invest in a permanent
share of the TAC, so that they’d be sure of their
relative share in the landings of the respective species from a given area,
they wouldn’t need to apply the “gold-rush” mode of operation, and would be
interested in maintaining the resource in an everlastingly sustainable
condition”. This argument, however, is
irrelevant in the great majority of cases where the “gold-rush” condition is
absent. Notwithstanding, ITQs are a rather peculiar
sort of property rights: fishermen must pay sometimes quite heavily for the
right to catch a certain amount of fish, without knowing whether they’ll be
able to get it and at what operational cost They don’t really control the
resource and don't know whether by observing the rules and sticking to the
quota they won’t be made suckers by others. Hence, the well-intended
potential stewardship over the resources by quota-owners is, in fact, more
often frustrated by high grading, fish dumping, and quota busting. While ITQs indeed mitigated the “gold-rush” fishing, and their
contribution to stock conservation might have happened in a few fisheries, it
has been proved so only in a couple of them. At the same time, many failures
have been reported and documented. Small under siege. The ITQ-system
would be socially and nationally justifiable mainly on high seas, where the
resource is technically not accessible to small and middle-scale operators
based on coastal fishing communities, and where exploitation of the resource
requires large-scale industrial fishing vessels and fleet-logistics. But
small-scale operators, who traditionally exploit inshore and coastal
resources, predominantly consider marketable quotas socially and also
economically wrong. Harvesting methods that are most efficient in financial
terms are often the ones with the worst collateral (including environmental)
impact, while less capital-intensive and technologically and operationally
sophisticated fishing methods normally allow wider and much more equitable
access to benefits from the fishery, with less negative environmental and
social impacts. In
Third World countries, for example, traditional and other coastal fisheries
operate under many stresses, the main one being invasion of larger-scale
fisheries into waters and stocks accessible to and fishable by small scale
fishermen, often with official government support or high-circles’ well-paid
“closing of the eye”. But, in such
areas, large-scale operations are by most criteria less efficient than
small-scale fishing. They consume several times more fuel per each tonne of
marketable fish than the small-boat fishery, their capital investment in gear
and vessels is much higher, and they produce fewer true national benefits.
The same fish stock that can be fully and profitably exploited by 10 trawlers
manned by 100 people, if allocated exclusively to coastal fisherfolk
using nets, pots, and hooks-and-lines, may provide living to many hundreds,
or maybe thousands of them, never mind how low their calculated profits are
going to be. In
many areas, both recreational and small-scale commercial fisheries form the
backbone of coastal communities whose economies revolve around fishing. It
causes money to flow to equipment and bait, food and fuel suppliers,
boatyards, and a variety of commercial and technical services in docks,
harbours and marinas, as well as those sectors of the tourist industry that
are centered on fishing communities.
Subsidies. Some governments, as well as most global, transnational,
and intergovernmental financial institutions are driven by the neoclassical
ideology, especially when it comes to economic relations
with developing nations. Undeniably, some of the conditions of economic
co-operation and assistance imposed by those institutions stem from their
wish to protect their investments from misconduct, corruption, and
mismanagement. But, only too often, under the hypocritical pretext of
securing free market and economic liberalization, their
conditions are simply a
tool of protectionism. And here we
come to fisheries subsidies. The USA, the EU and
some other developed countries, in view of the heavy
overcapitalisation of their fishing fleets, came to the quite
appropriate decision to stop subsidizing construction of fishing vessels.
They want, however, to have their new policies “globalized”
to cover also the developing world. A number of developing countries have had for
many years too large national fleets, and they as well should not subsidize
overcapacity. However, any international agreement involving fishery
subsidies should take into account small-scale fishermen, who have to compete
over their local fish resources against large-scale fishing fleets that are
allowed to fish, or just poach on their native, traditional fishing grounds.
Such fleets are subsidized, almost as a rule, whether directly or in a
roundabout manner, as are the EU payments for
access to fishing grounds of Third World nations. Small-scale fisherfolks operating under such conditions deserve
support both on the part of their own respective governments, as well as of
the international community. Would it be too much to ask WTO,
EU, and individual governments of countries whose
fleets are out to exploit coastal fish stocks of their own or other
countries, as well as the governments who allow such fleets into their
coastal waters, to give them a fighting chance? Joining forces. Fisherfolk in the small and medium scale sectors both,
owners and hired hands faced with dislocation from their traditional
fisheries by management systems based on marketable fishing rights, should
recognize that their main adversaries are the standard bearers of the
neoclassical economics in national and transnational financial institutions
and corporations, and their proxies in fisheries management. It is very
difficult to resist such powerful interests in democratic societies without
joining forces. For this purpose, provincial, national, and regional
fishermen’s associations should organize under common umbrellas. Also
international associations of fishing people should create a joint worldwide
umbrella that without affecting their respective structure and character,
would enable them to board the globalization train in weight and force. *An earlier version of this are article was
published under the same title in SAMUDRA Report
(35), July 2003. ______________________________ |