Business and Regulations,Opinion
RALEIGH – The market process is not a theory. It is not an ideology. It is simply the most efficient means human beings have ever come up with for resolving a wide range of conflicts.
Many of these conflicts arise because different people want to do different things with the same resource. In a developed economy based on private property, markets facilitate the resolution of such disputes. No central authority need be given the power to decide what would be the best use of a given parcel of land, for example. No central authority could ever gather all the bits of information needed to make the “right” decision, anyway. Instead, prospective users bid to acquire the property, and the owner takes the best deal.
The thornier conflicts are those regarding resources that are not privately owned – either because of past government expansion or, in the case of air and flowing water, because the assertion and enforcement of private ownership is difficult if not impossible. Government involvement is necessary here, but that involvement need not devolve into central planning.
Consider the current controversy over fishing rights off the North Carolina coast. This is a legitimate area for government action, because a “first come, first catch” rule for fish in public waterways is a classic case of the tragedy of the commons. Without the incentive private ownership brings to conserve a valuable resource, it tends to be over-consumed, to everyone’s long-term detriment.
State Rep. Darrell McCormick, a Yadkin County Republican, has filed a bill to declare three species “game fish” on the grounds that they are of greater economic value to recreational fishermen than to commercial fisherman whose catches are marketed to the public.
Recreational fishermen already account for most of the red drum, spotted sea trout, and striped bass caught in North Carolina waters. McCormick’s bill would bring that share close to 100 percent. His argument is that those who fish for sport derive greater value from the experience than do consumers who eat commercially caught fish. “The dock value of one red drum is about $1.50 a pound,” McCormick told Carolina Journal. “Its value to our state, as a recreational fish, is $300 a pound.”
McCormick and another Republican legislator, Sen. Don East, got into an extended debate about whether recreational or commercial fishermen generate greater economic and social benefits to North Carolina per fish caught. But that’s precisely the kind of question that lawmaking is poorly suited to answer.
A better approach would be for the state to limit its role to setting annual catch amounts – set to allow these species to recover and maintain their numbers in public waters – and then let private firms bid for tradable catch permits under the gap. Those associated with recreational fishing, including those who rent their boats and sell gear, would bid against commercial fishermen. There is no need for the state to attempt to guess at which use is “better.” The state’s job here is simply to help define property rights over resources that are in the commons.
The actual implementation of the idea would, admittedly, be complicated. There would be issues of definition and enforcement. Fortunately, there are many experts who have studied these issues for decades, and learned from the many cases around the globe where fishery markets are already used to manage conflicting claims. The Political Economic Research Center is one such organization. The John Locke Foundation is doing some related work here in North Carolina, as well.
That a fishery market for red drum, spotted sea trout, and striped bass would be a complex one is not an argument against it, however. All economies are complex. Politicians and commentators do a great disservice to the cause of economic education by using mechanistic terms – the economy is “overheating,” the president “drives” the national economy, etc. – when biological terminology would be more appropriate. The best analogy is to an ecosystem, a set of structures and activities that are highly organized and interrelated but not the result of conscious design.
Plants and animals form ecosystems. So do human beings, by making choices that are shaped and informed by their natural inclinations, resources, and environment. We call the result of these ongoing decisions an economy. Government exists to manage some disputes within the economy, such as resource conflicts on non-private property. But it doesn’t exist to manage the economy itself.
Hood is president of the John Locke Foundation.