The Cantillion Effect
The conventional history of economics usually starts with Adam Smith, David Ricardo and J. S. Mill. But there is one who came before, who might deserve to be just as much of a famous name: Richard Cantillion. The Irish economist of French descent (see, there are redeeming features of French economics!) is crucial to the history of economics.
In 1734, as if from a film noir classic, Richard Cantillon was murdered by a disgruntled former employee and his home was set ablaze. His seminal work, Essai sur la Nature du Commerce en General survived the fire and was published in 1755. His work ignited not just Adam Smith’s writings, but intellectual giants of the following centuries from Jean-Baptiste Say to Friedrich Hayek.
Cantillion’s contribution to monetary policy is just as important today. In Essai, Cantillon provided an advanced version of John Locke's quantity theory of money, focusing on relative inflation and the velocity of money. Namely, when you print money, it causes more pounds to chase fewer goods, pushing up the average cost resulting in inflation. His theory has been dubbed ‘The Cantillion effect’, and is a lesson to us all on the effects of inflation ‘financing the financiers’.
Printing press enthusiasts often speak of the virtues of spending as a way to help those at the very bottom of society. From lavish government programmes for the purposes of ‘job creation’ to recklessly inefficient welfare spending, well-intentioned policy in theory often leads to not so well policy in practice. These outcomes can even be contrary to the intended effects of alleviating the status of the poor. Examples are plentiful: rent control, tariffs, planning restrictions, minimum wage laws and zero hour contracts that all hurt the poor under the pretence of helping them.
Monetarists such as Noble Prize-winning economist Milton Friedman have long argued about the importance of curbing inflation but more generally, government inflation has greater ‘unseen’ effects which are ignored.
While Friedman argued that money is ‘neutral’ (meaning an increase in money supply won’t actually change the amount of resources in the economy in the long run), in the short run, inflation as a policy tool has far-reaching socioeconomic effects. It favours time-responsive actors such as investors rather than wage earners who will feel the effects of the increased money supply in the end. It would impose "forced savings" and lower real incomes on those whose income was not changed due to monetary inflation, possibly leading to unemployment.
Cantillion wrote:
“The river, which runs and winds about in its bed, will not flow with double the speed when the amount of water is doubled.”
Inflation is not simply an average rise in prices. Prices do not rise proportionally or simultaneously. This results in arbitrary benefit to some who have not created any economic value and detriment to others who have not destroyed anything of economic value by destroying savings for example. This is the Cantillion effect.
In response to the change in relative prices, more resources are allocated to long-term capital goods such as shares since they are spent by the most time-sensitive actors such as investors e.g. by buying stocks and profiting when prices are low. The sudden increased demand for stocks in the financial market bids up asset prices, this may even happen before the rise in the money supply is taken into account.
This results in deadweight loss (due to market distortions, rather than say, real price signals) due to new investments that may not be as well suited to the economy. This may result in large losses and possible bankruptcies by the owners of these capital goods. To the extent that these adjustments are widespread, they pose a threat to capital markets and the banking system.
The result of the adjustment to the increase in supply may quickly result in this river turning swiftly to one of mud. Why does this effect matter? This regressive tax is often attempted to be overcome with further progressive taxation and this phenomenon has been largely ignored by groups and political parties on the Left.
Cantillion’s work has very real implications, the Cantillion effect of inflation is one of many of his myriad of theoretical contributions. Ranging from basic methodology to complex macroeconomic models that include the circular-flow model and the price-specie flow mechanism. Cantillion is, unfortunately, one of the more underrated economists of our time. He deserves to be put in classroom economic history textbooks, just like Smith, Ricardo and Mill.
It is not just students who are naive, politicians are often blind to the true consequences of their magic money tree promises. Ironically it is those that aim to help the common man who advocate for disastrous spending policies that hurt us all. Politically this may seem like a monetary sleight of hand, ensuring the flexibility of the labour market and gaining voters, but in practice, inflation is a regressive tax, often under the pretence of egalitarian stability which exacerbates the inequalities it attempts to mitigate.
Even Richelieu did something useful
Cardinal Richelieu is remembered for making France into a centralized state by building up the power of the crown and weakening that of the nobles. He used brutal methods to do so, building up a network of spies and informers, having the rivals and opponents of his power executed, and banning political discussion in public bodies. His reputation was forever cast by Alexandre Dumas in “The Three Musketeers,” who portrayed him as a ruthless, power-hungry and cynical ruler. He will be remembered for his famous observation, “If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him.” And he did have quite a few people hanged.
He deserves to be remembered, however, as the inventor of the table knife on March 13th, 1637. He finally tired of the appalling table manners of his guests, who would stab at chunks of meat with daggers, and even worse, pick their teeth with the sharp points afterwards. He ordered his staff to grind down the points of his house knives, so they had rounded ends instead of points. Because he was famous as well as feared, the practice caught on, and French households copied the idea in order to be thought fashionable and well-mannered. The subsequent King, Louis XIV, banned pointed knives altogether, partly to prevent violence, particularly against himself, and partly to foster the idea of civilized and gracious manners. Thus began the modern table knife.
Richelieu is regarded with some respect in modern France. An elegant kind of lace bears his name, as does a Paris Metro station, and four warships have been named after him. It would have been five, but the aircraft carrier’s name was changed from the Cardinal Richelieu to the Charles de Gaulle. All of this honours his role in changing France into a modern centralized state, while his invention of the table knife is less well known.
It was, however, symbolic. As recent ASI lecturer, Steven Pinker, showed in “The Better Angels of Our Nature,” violence has steadily declined over the centuries. The sharp daggers once used to wreak random and casual violence, have evolved into delicate instruments that enable us to display exquisite table manners. Swords have been turned, not into ploughshares, but into practical and useful items. Despite those who constantly moan that the world is heading for hell in a hand-basket, it is becoming better by almost every conceivable measure. Deaths in infancy, deaths in childbirth, deaths from disease and starvation, all are declining, as is the daily violence that people inflicted upon each other. Even Cardinal Richelieu contributed to that improvement and did at least one thing that was useful.
They're not really understanding octopus farming, are they?
Actually, they might understand the details of octopus farming but they’re not grasping the larger point at all. We’re told that octopi are complex, possibly sentient, beings and that farming them has certain problems. Some stemming from that sentience, some from the desired nature of their diet - other fishy things. Those technical problems may indeed be problems. But that larger point they are still missing:
But the case for octopus farming is weak, according to Jacquet and her co-authors. The main markets for the animals – the US, Europe, Japan and China – are areas where people are already well-fed. Octopuses are delicacies and do not deserve to be the focus of intensive farming.
That’s to entirely miss how product development works. Everything always does start out as a luxury - it’s that capitalist desire to profit from making more of it that drives down prices as competition enters. Mobile phones used to cost what a used car did - a good one - and air time was per minute the hourly average wage. Now they’re cheap enough that real poor people out there in the undeveloped countries have them. Leading to that famed economic growth lifting so many out of that poverty. Ford’s democratisation of the automobile came decades after the rich man’s toys.
But yes, it gets worse:
Indeed, the case in favor of octopus farming is weak. The main markets for farmed octopus—upscale outlets in Japan, South Korea, northern Mediterranean countries, the United States, China, and Australia—are largely food secure. (Food security is defined as when all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life.) As consumers become increasingly concerned about animal welfare and sustainability, the case against octopus farming should only become stronger. If society decides we cannot farm octopus, it will mean relatively few people can continue to eat them. But it does not mean that food security will be undermined; it will mean only that affluent consumers will pay more for increasingly scarce, wild octopus.
Right now, the farming of octopus is constrained by the technology—it has been difficult to reliably keep animals alive through the early stages in their lives. But with further investments, research, and testing, the technology may well become available to farm octopus at an industrial scale. It is our hope that if such an option does become practical, society will recognize the serious welfare and environmental problems associated with such projects and octopus farming will be discouraged or prevented. Better still would be for governments, private companies, and academic institutions to stop investing in octopus farming now and to instead focus their efforts on achieving a truly sustainable and compassionate future for food production.
It’s not, and it shouldn’t be, society which decides such things. That is and would be the tyranny of the majority. We, the consumers, get to decide these matters on an individual basis. As with any other moral point in fact. There are those who are vegetarian, ovolactarian or not such, vegan, piscatarian, near entirely carnivorous and the most of us, omnivorous. Those who are any of these on moral grounds get to make their own choices about that sort of thing. That’s what being a liberal, living in a liberal society, means. We get to apply our ethical insights to our lives.
It’s an illiberal society that determines such behaviour for people.
That is, if an individual decides she doesn’t want to eat farmed octopus that’s just great, that’s freedom for ya’. Even that prodnoses tell us we shouldn’t eat farmed octopus is just fine - to attempt to persuade others of your ethical vision is indeed part of that liberty. But to impose a ban on even trying to farm octopusses is the imposition of one moral view upon all who may not share it.
Actually, to demand the ban is to insist that all don’t, for why ban if you think that no one will want the production anyway? To insist that the process cannot start is to insist that at least some will consume the output. Which is being illiberal, to impose ones’ own view on everyone else.
That is, as ever, the liberal polity is the free market one, where each can and does choose to consume according to their own measures and moral visions.
Venezuela Campaign: Chavista Anti-Semitism
Anti-Semitism has formed a key part of Chavismo, Hugo Chávez’s political ideology, and is now maintained by Chávez’s successor Nicholas Maduro. From the early days of his presidency, Chávez targeted Venezuela’s small Jewish community with abuse and sought to push them out of Venezuela. This was despite the absence of any anti-Semitic tradition in Venezuelan culture, which was always welcoming towards its Jewish population. When Chávez came to power in 1999, 30,000 Jews lived in Venezuela. Now only an estimated 5,000 remain after two decades of persecution.
Chávez propagated classic tropes of anti-Semitism, including the notion that Jews controlled world finance and had “taken possession of all the wealth of the world.” Also prominent was the argument that Jews were dangerous fifth columnists, seeking to disrupt Venezuela and the Bolivarian revolution. “Don’t let yourselves be poisoned by those wandering Jews,” he urged Venezuelans in one notable address. State owned media outlets promoted The Protocols of the Elders of Zion, an infamous anti-Semitics hoax. Chávez went beyond demagoguery, going to far as to both incite and directly order violence against Venezuela’s Jews. In March 2009, police officers were caught vandalising Venezuela’s largest synagogue, daubing “we don’t want Jews here!” on the walls and destroying holy books. Chávez also sought to impose bureaucratic restrictions on Venezuela’s Jews. In 2012, the interior ministry required extra permits for the importation of Matzo, the unleavened bread essential to the Passover festival. When the Jewish community sought to make representations about this or other discrimination, they were directed to the foreign ministry, to indicate that the regime viewed them as aliens.
Anti-Semitism was also a tool with which to tarnish political opponents. Chávez extensively deployed anti-Semitism in his 2012 election campaign against opposition candidate Henrique Capriles. Although a devout Catholic, Capriles had Jewish ancestry, so cartoons in the Chavista press featured him wearing a Star of David and pink shorts, the latter a homophobic reference to the fact that he was unmarried. Chavista propaganda accused him of: belonging to an international Zionist cabal which controlled the media, Hollywood, and global finance; disloyalty to Venezuela and its people; belonging to a group of exploiters responsible for the misery of others; being an “illegitimate” Catholic; and fronting a Zionist conspiracy to take over Venezuela.
Anti-Semitic activity intensified after Maduro took over from Chávez. Over 4,000 anti-Semitic incidents occurred in Venezuela during 2013 according to Venezuela's main Jewish organization, CAIV. Maduro and his regime continue to invoke anti-Semitic tropes to this day, including conspiracies of opposition leader Juan Guaidó as a US and ‘Zionist’ puppet. In a February 13th interview with al-Mayadeen, a Hezbollah-affiliated Lebanese media outlet, Maduro stated that Guaidó’s inner circle was full of CIA agents serving “American and Zionist” interests.
Why are the Chavistas so anti-Semitic? Firstly, the regime likes to blame alien conspiracies for the dire state of the economy as well as other regime failures, and Jews neatly fit this requirement. Secondly, Chávez himself was strongly influenced by anti-Semitic ideas, partially through his friendship with the Argentinian fascist intellectual Norberto Ceresole. “Ceresole was like the parrot on Chávez’s shoulder,” said Sammy Eppel, the head of the Human Rights Commission of the Venezuelan Bna’i Brith. “He wanted to bring the far left and the far right together, and he persuaded Chávez that he was the man to do that.” The first chapter of Ceresole’s book extolling this model was titled “The Jewish Problem,” and anti-Semitism became the glue that bound together the Chavista government approach in which an all-powerful leader directs the people, unrestrained by tiresome limitations such as an independent judiciary.
Finally, the Chavista regime allied itself with countries and groups strongly opposed to the USA and western foreign policy, such as Iran, Syria, Hezbollah, Hamas, Russia and Libya, and most of these promote anti-Semitism to various degrees. Chávez established a particularly strong political and commercial relationship with Iran, forming at least $20 billion worth of joint ventures with Iran's Mahmoud Ahmadinejad, including a bank and an airline used by Hezbollah. The relationship with Hezbollah is still strong, as revealed by a recent New York Times expose of secret files compiled by Venezuelan intelligence agents which reveal how one of Maduro’s closest confidants, industry Minister and former Vice-President Tareck El Aissami helped Hezbollah establish a drug-smuggling network across Latin America.
The Chavista regime espoused anti-Semitism and wielded it as a political weapon. The regime lies to the Venezuelan people and disguises its own failings under the cover of international conspiracies. Chavez and Maduro’s actions have been reprehensible, and one hopes that successor regimes will draw a line under this ugly period in Venezuelan history.
More information on the Venezuela Campaign can be found on their website.
The Barons' ultimatum
One of the defining moments in English history occurred on May 12th, 1215, when the Barons presented King John with an ultimatum demanding that he recognize their established rights as Englishmen. The king had no alternative but to agree, and 34 days later, in a ceremony at the Thames water-meadow called Runnymede, he signed the document that set out the rights of Englishmen and his commitment to uphold them. It came to be known as Magna Carta, the Great Charter.
It proclaimed that church rights would be protected, that the barons would not be imprisoned illegally, or denied swift justice, and it restricted the monarch’s right to demand feudal payments. It has a chequered history, annulled by the pope, reissued with modifications, incorporated into a peace treaty between a subsequent king and barons, and reissued again in return for agreement to new taxes. The Jurist Sir Edward Coke used it in the early 17th Century to argue against the Divine Right of Kings claimed by the Stuarts. Since then it has been regarded as one of the cornerstones of English law.
Its reputation is largely symbolic, since it was more concerned with the rights of those with rank, rather than with those of ordinary people, but it had a profound influence on the “Glorious Revolution” of 1688, and on the Constitution of the United States. The late Lord Denning described it as "the greatest constitutional document of all times – the foundation of the freedom of the individual against the arbitrary authority of the despot." Notions such as habeas corpus and Parliamentary rights can be traced to its influence. It limited the powers of rulers, and brought them under the law. Its words still resonate.
“No freeman shall be taken, or imprisoned, or outlawed, or exiled, or in any way harmed, nor will we go upon him nor will we send upon him, except by the legal judgement of his peers or by the law of the land. To none will we sell, to none deny or delay, right or justice.”
The extension of its principles to protect the rights of ordinary people has been conveyed by subsequent Parliamentary Acts and legal judgements. William Pitt, later Earl of Chatham, expressed it in 1763.
“The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail, its roof may shake; the wind may blow through it; the storms may enter, the rain may enter, - but the King of England cannot enter; all his forces dare not cross the threshold of the ruined tenement.”
Isn't the world full of surprises - we agree with Owen Jones
Presumably it had to happen at sometime, Owen Jones stumbling onto a good idea:
Denver’s move is just the latest outbreak of common sense on drugs – how depressing, then, that Britain remains so backward on the issue. That is mostly the fault, I’m sorry to say, of the Labour party. You’d expect the Tories to take a punitive, snub-the-evidence approach (even though, before assuming the Tory leadership, David Cameron accepted that drugs policy was a failure). But where is the leadership from Labour? The so-called war on drugs is a catastrophic failure, and it hurts many vulnerable people Labour was founded to represent. Drugs should be treated as a public health issue, not a part of the criminal system.
Actually, it’s largely the free market right, the libertarians and classical liberals, who support that decriminalisation. We are obviously at the extreme end and have been for some decades, arguing for full legalisation of course. But Portugal’s decriminalisation, mentioned by Jones, has received full throated approval from the Cato Institute over in the US.
There being two drivers of this - one being the harm reduction, just the greater sense of learning the lessons of Prohibition and so on. But also that basic idea of freedom and liberty. In the absence of third party harm consenting adults should be left to get on with life as consenting adults wish. Yes, this includes the liberty to ingest to choice even when others disapprove of said choice. You know, as with the deployment of gonads and any other choice on how to spend our all too brief time upon this Earth.
There is no hope of the Conservatives showing any leadership on this. Labour’s refusal to commit to decriminalisation is weak: if Britain committed to a sensible, humane approach, it would represent a devastating blow to this most catastrophic of global policies. For the sake of common sense and basic humanity, Labour should say enough is enough – and publicly declare the death rites for the “war on drugs” once and for all.
If it turns out to be Labour that brings in sensible policy then we don’t mind. Won’t be the first time we’ve advocated good policy that they have instituted - that London Congestion Charge started with Alan Walters here on this classical liberal, free market, right long before Red Ken brought it in. Good policy is good policy and so why not bring it in whoever claims the credit for it?
David Cameron as Prime Minister
It was just 9 years ago, on May 11th, 2010, that David Cameron accepted Queen Elizabeth's invitation to form a government and became Prime Minister. In doing so, he became, at age 43, the youngest one since Lord Liverpool in 1812. His Conservative Party had not won a majority, but it emerged from the election as the largest party, and was able to negotiate a coalition, Britain's first since 1945, with the Liberal Democrats. Their leader, Nick Clegg, became Deputy Prime Minister.
In assessing his record, future historians might reach a more favourable verdict on his tenure than contemporary commentators. He will probably be praised for his leadership in legalizing same sex marriages, putting it through with the support of Labour and Lib Dem MPs, even though a majority of Conservative MPs voted against it.
He might well be praised for steering the UK through the turbulence that followed in the wake of the Financial Crisis, reducing both deficit and debt as a proportion of GDP, and restoring stability.
His referenda will undoubtedly feature in any assessment. He agreed to hold one in 2014 on Scottish independence, giving voters a straight "yes or no" choice, without a third option for enhanced devolution. He backed the Better Together campaign, but kept a low profile, wisely reckoning that an English public-school-educated figure would not resonate well with Scottish voters. The convincing rejection of Scottish independence vindicated his stance.
He had agreed to a referendum on changing the voting system as a condition of the coalition agreement, but campaigned personally against changing to an Alternative Vote system. Again, the result favoured the status quo by a comfortable margin.
Another referendum, called in 2013, asked the Falkland Islanders if they wished to remain an Overseas Territory of the UK. This was to counter Argentina's assertions of sovereignty. On a turnout of 91.94%, 99.8% opted for the status quo, with only 3 people voting for change.
His final referendum, the 2016 one on EU membership, went against him. Some commentators suggested he had only agreed to it to ward off a UKIP challenge, expecting to lead another coalition government that would prevent it happening. When his party won an overall majority in 2015, he had to follow through with his commitment and hold it.
In retrospect, he might be remembered for the one thing he did not want to happen, the UK's withdrawal from the EU, and the biggest constitutional change in half a century. If the UK prospers on the world stage after regaining its sovereignty, he might be remembered more kindly as the Prime Minister who made that possible.
It worries us that we even half agree with Paul Mason
We tend to regard Paul Mason as being akin to Polly Toynbee, a reliable indicator of exactly what not to do in any particular circumstance. If either tell us that our glasses are on the end of our nose then that’s the one place we know absolutely that they aren’t. It’s therefore somewhat discomfiting to find that we at least half agree with Mason here:
When they finally noticed the discontent raging in places like this, people with power assumed it could be put right using money. Tony Blair and Gordon Brown did it through welfare payments. Even now, as she flails around over Brexit, Theresa May wants to do it through a billion-pound bribe to former mining towns. I propose putting it right by giving them power. What’s missing is the power to take decisions about the most important things in their lives: whether a local hospital should close; how often the bins should be emptied; whether a school should be under the control of the local authority or a faceless corporation; where the infrastructure should go that might – just might- attract investment in something other than vape shops and slave-driving sports-goods empires.
What form of constitutional change is best suited to delivering power to English towns such as Wigan? In this part of England – which has seen power drain towards London, wealth flow upwards into the hands of asset holders and technological change driven mainly from abroad – we are going to need something close to regime change to flatten the socio-economic divide between north and south.
That might be a bit more colourful than the language we would normally use but yes, devolution of power to those who actually do things, have skin in the game being played, makes sense to us. So much so that we’ve been suggesting it for many decades now. Some powers do indeed have to be national and concentrated - we’d prefer that Berwick not be able to declare war unilaterally again. Or be left out of a peace treaty. But to us the test is what absolutely must be done nationally and in that concentrated manner? Everything else should be done at whatever lower level makes sense. So, yes, the devolution of economic power, why not?
The first building block has to be a national industrial strategy.
Ah, Mason’s normal service is resumed. That’s absolutely what there shouldn’t be. For having national strategies is what got us here in the first place. Devolution of economic power should be to those who do indeed have skin in the game - to those who are participating in the economy. Rather than a bureaucracy directing and strategising the national economy we want, consistent with a rule of law and the keeping of the public peace, as much of a laissez faire regime as possible. Precisely because this does devolve economic power down to that level where it is useful and righteous - to the market participants who are that economy.
Mason’s just suggesting a change in who tells us all what to do. Perhaps, if we’re kind about it, a change in what it is that we’re told to do. We insist that the solution is that we get to do as we wish. That actually being what an economy is, voluntary interaction so why don’t we return to that voluntary form of it?
Panic in the streets
On May 10th, 1837, an extraordinary panic began with New York banks, and sparked a recession that lasted several years. It was in many ways a classic example of a self-sustaining feedback loop, in which depositors, fearing for the safety of their deposits, rushed to withdraw their deposits, and by their actions weakened the banks and made deposits unsafe.
The chain of events that triggered it started with the Bank of England response to a fall in its monetary reserves. It decided to edge interest rates up from 3 percent to 5 percent to attract specie and curb lending. US banks had to follow suit or risk losing out to the higher rate of the Bank of England. When New York banks did so, and cut back on lending, it led to some businesses defaulting and started a wave of bankruptcies. The cotton industry of the South was particularly hard hit, but the effect rippled to most of the US.
On May 10, 1837, banks in New York City announced they would no longer redeem commercial paper in gold and silver at full face value. It caused panic and hysteria as people rushed to withdraw deposits. Banks collapsed, businesses failed, prices fell, and there was mass unemployment, maybe as high as 25 percent in some places. The recession lasted about seven years.
Psychology played a part, as it did in the 2008 Financial Crisis. I vividly remember walking past the Northern Rock branch in Cambridge watching the queues stretching round the block as people withdrew their deposits as quickly as they could. When Lehman's went down it triggered a financial earthquake. Fortunately, some had learned the lesson of the 1929 crash, and responded by loosening credit rather than tightening it. Thus there was no ten-year Great Depression repeated.
It does indicate the somewhat precarious nature of modern financial structures. Some have responded by urging an end to fractional reserve banking, or even a return to the gold standard. Others, including ourselves, have urged that the system be more open to competition and easier for new banks to enter. Yet others have more modestly urged requirements for banks to have greater reserves to cushion against future shocks, but few have confidence in the current system's ability to cope with future shocks. There will be shocks, though, because people grow complacent in prosperous times and less careful about the risks they undertake. It takes the next shock to remind them and to moderate their behaviour.
Those who take these shocks as proof that the whole financial system should be replaced seem to overlook the benefits it has brought in terms of unparalleled advances in living standards over centuries. There have been few major international crises, and world finance has survived then, recovered, and learned their lessons. The point is that the future cannot be controlled because it is unpredictable. What can be controlled to some degree is our ability to learn from events and to adapt to the challenges they present.
George Monbiot might be right but remarkably unobservant
George Monbiot tells us that the fishing industry isn’t working - in which he’s right. We wouldn’t go so far as to recommend his solution, that all just stop eating fish, but we agree that sorting out the structure and incentives of the business is not just a good idea but a necessity.
This means that the first duty of a journalist is to cover neglected issues. So I want to direct you to the 70% of the planet that was sidelined even in the sparse coverage of the new report: the seas. Here, life is collapsing even faster than on land. The main cause, the UN biodiversity report makes clear, is not plastic. It is not pollution, not climate breakdown, not even the acidification of the ocean. It is fishing. Because commercial fishing is the most important factor, this is the one we talk about least. The BBC’s recent Blue Planet Live series, carefully avoiding any collision with powerful interests, epitomised this reticence. There was not a word about the fossil fuel or plastics industries – and only a fleeting reference to the fishing industry, which is protected by a combination of brute power and bucolic fantasy.
This is not in fact something that has been ignored. Far from it in fact. We know the theory behind what is wrong here. It’s a real and actual example of Garret Hardin’s Tragedy of the Commons. We also know what the solution is, we either have to regulate access to the resource or we have to privatise it, make it property.
For if we have that unlimited access - as, say, George Monbiot fishing in Cardigan Bay from his kayak - and we’ve 7 billion people doing it then we’re going to exhaust that resource.
We can go further too. We’ve tried that regulation bit and as the abomination of the Common Fisheries Policy shows that doesn’t in fact work. Do recall Hardin’s point that which solution we use, socialism or capitalism, is not a prejudicial or political decision, it’s one based upon the details of the matter under discussion. Dependent upon those details one philosophic approach will work and the other won’t.
It’s entirely true that many inshore fisheries are accessed by groups small enough to use Elinor Ostrom’s communal self-regulation. But the major fisheries simply are not.
We’ve even tried that capitalist method of assigning ownership of the fish stocks to known and named individuals. It works too. One of those details which makes it work is that a stock well above sustainable levels is more profitable. A profit maximising owner thus runs the fishery at well above merely sustainable levels of stock. But that owner must be able to exclude others to avoid that Commons Tragedy.
We’ve no problem, of course we don’t, with people identifying problems which need to be solved. It’s even true that at times, as here with fisheries, we’ll agree that it is a problem that does need to be solved. What does irk is people complaining that no one is paying attention - when for a couple of decades now it’s been known and obvious that there is a solution. It’s been tested - notably in New Zealand and Alaskan waters - and it works. When fishermen own fish stocks as farmers own fields and cattle then our commons problem over fish will be solved.
So, assign ownership of fish stocks and solve the problem. Far from being ignored the problem is solved - of only those shouting about the issue would listen then implement.