Public Problem – Private Solution
Common goods are non-exclusive (it is hard to prevent anyone from consuming them – can’t sell tickets) and they are rival (consumption reduces their number). The economic parable, “The Tragedy of the Commons” highlights the policy problems with managing common goods.
From the April 9 edition of The New York Times, comes a report of a public-private solution to the management of commerical fishing stocks off the coast of New England. As with most commercial fisheries, the fish population is declining, due to over-fishing. The Federal Government, through NOAA and regional councils, sets limits on fish catches – hoping to keep fish stocks sustainable. Within those limits, however, fishing boat owners compete to find the fish. Now NOAA is instituting a private ownership system.
In an ownership, or “catch share,” system, individuals, companies, cooperatives, communities or other entities receive the right to take a set percentage of the annual catch of particular fish in particular areas. The system gives fishermen a powerful motive to fish sustainably, because the value of their share rises as fish stocks increase.
The economic concept here is that private ownership will increase the sense of responsibility on the part of group owners, and that they will make decisions to increase the long term value of their ownership investment.
I teach principles of economics courses and a course in the economics of healthcare at Southern Oregon University.
