The Half-Life of Policy Rationales

How New Technology Affects Old Policy Issues

Fred E. Foldvary, Daniel B. Klein

• Publisher: NYU Press
• Year: 2003
• ISBN:
  9781479859023
• Topic: Volkswirtschaftslehre
• Subtopic: Wirtschaftspolitik

The Half-Life of Policy Rationales argues that the appropriateness of policy depends on the state of technology, and that the justifications for many public policies are dissolving as technology advances. As new detection and metering technologies are being developed for highways, parking, and auto emissions, and information becomes more accessible and user-friendly, this volume argues that quality and safety are better handled by the private sector. As for public utilities, new means of producing and delivering electricity, water, postal, and telephone services dissolve the old natural-monopolies rationales of the government.

This volume includes essays on marine resources, lighthouses, highways, parking, auto emissions, consumer product safety, money and banking, medical licensing, electricity, water delivery, postal service, community governance, and endangered species. The editors have mobilized the hands-on knowledge of field experts to develop theories about technology and public policy. The Half-Life of Policy Rationales will be of interest to readers in public policy, technology, property rights, and economics.

Part I

Metering, Excluding, and Charging

1

Technology, Marine Conservation, and Fisheries Management

Michael De Alessi

It was once believed that the vast bounty of the oceans was inexhaustible. Not anymore. Around the world, the oceans’ fisheries are more often than not suffering from decline and mismanagement. The World Wildlife Fund recently declared that “nearly everywhere fisheries have suffered catastrophic declines” and claimed that “without a doubt we have exceeded the limits of the seas” (Associated Press, June 7, 1996). A case in point is the cod stock off the Atlantic coast, once one of the world’s richest fishing grounds. Though cod are an astoundingly fecund fish (an average female produces 1 million eggs), they now are close to commercial extinction.¹

The basic problem is that no one owns the fish. There is no reason to exercise restraint—what is left behind may simply be caught by someone else—and so fishermen try to harvest all that they can. This reduces fish populations and harms the fishery, but because the harmful effects of each fisherman’s actions are spread to all the participants, fishermen do not fully feel the harmful effects of their own actions. Depleting resources and destroying livelihoods may not make sense in the aggregate, but as Garret Hardin (1968) argued, when it is impossible to exert control over a fishery, tragedy may be inevitable.²

On land, the problem of the tragedy of the commons has typically been addressed by the creation of private property rights, either individual or communal. Owners’ rights carry with them the inducement to behave responsibly by creating positive incentives for conservation and steward-ship.³ At sea, however, private ownership has been much more difficult to establish, and rules that fishermen have informally agreed on are often not recognized by the law. Over time, government intervention has become the norm in fishery-resource management.

Apart from the disastrous effects of subsidies for expanding various fishing fleets, government efforts to stem depletion have typically been confined to limiting catches through restrictions on gear, effort, and seasons. But because they have done nothing to address the incentives to overfish, these restrictions have resulted in overcapitalization, inefficient harvesting techniques, dangerous races to harvest fish, and little or no progress in stemming the depletion of fisheries.

Sometimes harvests are successfully restricted, but fishermen are adept at staying ahead of the restrictions. The Alaskan halibut fishery is one of the most telling examples of regulatory failure. Regulations attempted to limit overfishing by reducing the length of the fishing season. With each successive reduction in the season, however, fishermen improved their ability to catch fish by investing in better technology and bigger boats. Before long, a fishery that had once been open for most of the year had seen its season reduced to two days, but without a significant reduction in its actual harvest.

Still, many continue to favor the government regulation of fisheries. The reasons given are myriad and are normally couched in rhetoric about protecting “the common heritage of humankind.” But many pleas for government involvement have something less than altruistic motivation. Dutchman Hugo Grotius, for example, was hardly feeling altruistic when he wrote of “the common heritage” in responding to attempts by the British navy, then stronger than the Dutch, to control access to the high seas (Christy and Scott 1965). Sadly, little has changed since the seventeenth century: opposition to private property rights is generally motivated by the improvement of some specific group or individual’s welfare.

Not surprisingly, technology is often blamed for the rapid decline of many species, as improved methods for locating and harvesting marine resources have allowed more fish to be caught more quickly and effectively. Carl Safina, a noted marine environmentalist, tells us in a 1995 Scientific American article that the worldwide fisheries’ “collapse” began with the explosion of fishing technologies during the 1950s and 1960s:

During that time, fishers adapted various military technologies to hunting on the high seas. Radar allowed boats to navigate in total fog, and sonar made it possible to detect schools of fish deep under the oceans’ opaque blanket. Electronic navigation aids such as LORAN (Long Range Navigation) and satellite positioning systems turned the trackless sea into a grid so that vessels could return to within 50 feet of a chosen location, such as sites where fish gathered and bred. (Safina 1995, 48)

It is certainly true that improvements in fishing technology have enabled vast increases in harvesting capacity, but blaming technology for depletion fails to appreciate the importance of incentives. It is not technology but the institutional arrangements governing a fishery that determine whether or not a fishery will be depleted.

Technological Innovation and the Lesson of the American West

It is difficult to envision a system of private ownership in the marine environment, let alone the technologies that might make such a system feasible. However, the rapidly changing landscape of the American West at the turn of the century shows how a system of private ownership can foster the development of innovative technologies and approaches to resource management. When settlers arrived in the American West, land was plentiful. But as population rapidly grew, the West’s water and land became progressively more scarce and therefore more valuable. Economists Terry Anderson and P. J. Hill (1975) showed that as the rights to land and freshwater resources became more valuable, more effort went into enforcing private property rights, which strengthened the incentives for resource conservation.

Initially, law in the West was simply transferred from the East, but it was not well suited to the frontier American West because it presumed that fencing material would be plentiful. It was not, however, and livestock frequently intermingled. Although defining private property by means of physical barriers was certainly desirable, the raw materials were not available. Government intervention was not an option, and so frontier entrepreneurs figured out new ways to define and enforce property rights.

The first such innovation was to devise a system of branding. Rapid improvements in branding technology, along with the development of cattlemen’s associations which standardized and registered the brands, allowed cattlemen to identify, protect, and monitor a valuable roaming resource. Another important innovation came in the 1870s with the invention of barbed wire. Barbed wire radically changed the ability to define private property. It was inexpensive and effective at marking territory, excluding interlopers, and keeping in livestock.

The crucial element to spur change and improve the management of cattle and land was that private property could be fully enjoyed only if the rights to it could be defined and enforced. As the rewards to the private ownership were realized, owners stepped up their efforts to develop new technologies that would secure their property rights even further. Private ownership encouraged innovation.

Technological Innovation and the Oceans

The engineers who maintained the invisible fences of sound and electricity which now divided the mighty Pacific into manageable portions … [held] at bay the specter of famine which had confronted all earlier ages, but which would never threaten the world again while the great plankton farms harvested their millions of tons of protein, and the whale herds obeyed their new masters. Man had come back to the sea, his ancient home, after aeons of exile; until the oceans froze, he would never be hungry again.

—Arthur C. Clarke, The Deep Range, 1958

Sound will pen fish inside a sea ranch.

—headline in Fish Farming International, 1996

Arthur C. Clarke specialized in imagining the future. Nowadays, to understand technology’s potential to revolutionize fishing and marine conservation, one need only examine the present. The territorial waters of the United States extend over a million square miles of ocean, and so monitoring animals or catching high-seas poachers is nearly impossible. If private property rights in the oceans were allowed to develop in ways similar to those in the frontier American West of old, a host of advanced technologies could be used to define and protect resources in the oceans.

Branding Technologies

Tags and Satellites

Scientists in Florida use transponders (small devices that beam information) and satellites to follow slow-moving manatees (O’Shea 1994). The manatees wear a belt with a platform-transmitter that emits an ultra-high-frequency signal. Using the Global Positioning System, or GPS, and radio telemetry, a satellite passing over a manatee detects the signal and records the identity of the manatee, the water temperature, and the angle at which the transmitter is tipped, allowing researchers to track the manatees and determine their migration paths. Similar electronic tags could be used to alert boaters to manatees in the water. Currently, boating accidents are the greatest threat to manatees, which have difficulty getting out of the way of speed boats. Although many waterways in Florida have speed limits, they are ineffectual. Advances in tagging could make monitoring and enforcement easier and could create a system of private property rights to protect the manatees.

Electronic Tags

Some fish populations can be monitored by less comprehensive—and less expensive—tagging technologies. Tagging of this kind involves inserting small computer chips into the fish, which are identified and recorded when the fish pass a monitor. Because live, tagged fish must pass through a small area, this method has limited applications. It is currently most effective in determining the success of hatchery programs for anadromous fish such as salmon that return to their native streams to spawn.

Salmon are already ranched in the same way that cattle are, except that their owners have no control over what happens to them once they are at sea, and so little work is being done to develop technologies to track them. Ranchers would devise branding technologies to control (i.e., protect) their salmon at sea if their ownership of such fish were allowed and internationally recognized. Ranchers might work out agreements with fishermen and/or fish packers so that owners would be compensated when their fish were caught by other ranchers or fishermen.

PIT Tags

Higher-tech tags have been developed that allow fish to be remotely identified. Such Passive Integrated Transponder tags, or PIT tags, are 9-mm-long electronic devices that send out signals when activated by a scanner (Science 1994). PIT tags can identify fish in rivers or ponds but not at sea (they have a short range of detection). In Maryland in 1995, four men illegally took protected largemouth bass from the Potomac to sell to wholesalers out of state (Mueller 1995). But many of the fish were tagged with these small electronic tags, which allowed police to identify the fish and catch the culprits.

Otolith (Inner-Ear) Markers

Biologists are learning that fish have their own natural tagging system, a bone in the fish’s inner ear called an otolith (Kingsmill 1993). These small bones aid in balance and grow in concentric layers, producing daily rings much like those produced annually on a tree. These rings are influenced by environmental conditions. By altering water temperature, ranchers can induce distinct bone patterns that can be used to identify the fish. Fishery scientists at the Washington State Department of Fish and Wildlife have “branded” salmon otoliths by altering the water temperature and therefore the growth patterns in hatchery salmon (Volk et al. 1994). As yet, this technique has been applied only to hatchery fish. Nonetheless these internal growth patterns could allow different stocks of fish to be easily identified by being “branded” by their owners.

Genetic Markers

Genetic research provides much the same results as otolith research. Through a process known as electrophoresis, also known as genetic fingerprinting, scientists can determine the origins of anadromous fish and, in some cases, even the stream that the fish hatched in (Pacific Fishing 1989). As the sensitivity of this process improves, branding fish by their genetic makeup will become increasingly feasible. Genetic fingerprinting has a long way to go before it is fully reliable, but like otolith technology, it offers great hope for branding fish or mammals.

Fish-Scale Markers

Elemental Research, Inc., a firm in British Columbia, has developed a technology for identifying individual populations of salmon. This technology is known as laser ablation ICP mass spectronomy (Elemental Research 1995). The process works by using trace elements from the rivers, streams, or hatcheries to establish an elemental signature that can then be used to identify exactly where a salmon spawned. Fish scales are tested without harming the fish, and the process can accurately identify even the smallest populations of fish.

Sonar

Military technologies such as the Integrated Undersea Surveillance System (IUSS) are becoming available for environmental monitoring and research. IUSS is an integrated network of fixed and mobile acoustic devices for monitoring the oceans. These devices listen for acoustic waves such as those from submarines, underwater earthquakes, or cetaceans (the group of mammals that includes whales), some of which can be heard even thousands of miles away (Nishimura 1994).

In 1993 scientists at Cornell University used IUSS to track a single blue whale for nearly forty-three days without the use of tags or radio beacons. The songlike sounds of whales are as distinct as human voices, so that individual whales can be identified in almost the same way that voice prints identify people. Dr. Christopher Clark, a Cornell biologist, believes that the system will “rewrite the book on whale distribution and movement” (Broad 1993). IUSS will help scientists determine concentrations and numbers of whales worldwide, and it will be possible to monitor individual whales using technology that identifies their distinctive songs.

Fencing Technologies: Aquaculture

A decade ago, a fish Malthusian might have predicted the end of salmon as a food. Human ingenuity seems to have beaten nature once again.

—Fleming Meeks writing in Forbes, 1990

Aquaculture—the practice of fencing in the oceans with nets, girders, and metal tanks—has experienced rapid growth and technological advancement. In 1994 it was reported that aquaculture generates $28.4 billion in revenues worldwide and is one of the world’s fastest-growing industries (Herring 1994). In 1991, the world aquaculture production was approximately 13 million metric tons, double what it was seven years earlier (FAO 1992, 1993). By 1995 that number had jumped to more than 21 million metric tons (FAO 1997). It is one reason that the worldwide fish catch has remained relatively constant at 100 million tons, even though wild stocks are declining.

Just as they did in the American West, entrepreneurs have been motivated to tinker, experiment, and innovate. It is important to note in the frontier example that private ownership not only encouraged ranchers to think more carefully about cattle protection but also encouraged those with no stake in the cattle business to do the same. As the demand for cattle protection grew, so did the rewards of supplying that demand. Barbed wire was not developed by ranchers but by entrepreneurs looking to develop new markets for their wire products. This same dynamic has fueled much of the innovation and rapid growth of aquaculture.

One advantage of aquaculture is the stability of supply. Aquaculture facilities have fresh fish in holding tanks and can either slow or accelerate their growth as desired. Markets and restaurants can count on the availability of fresh fish of uniform quality and size year round. No wild fishery can ensure supply as aquaculture facilities can.

Salmon Aquaculture

Salmon are one of the most commonly farmed species, and fish farmers have developed remarkable ways to manage them. Through genetic manipulations as well as environmental and dietary control, aquaculturalists increase the fis...