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Feb. 26, 2006 - Freedomain Radio - Stefan Molyneux
19:14
115 The Empty Seas: So long, and thanks for all the fish!

How the government destroyed one of the greatest natural resources in the world.

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So long and thanks for all the fish!
Lessons learned from empty seas by Stefan Molyneux, host of Free Domain Radio at www.freedomainradio.com One of the sad paradoxes of the environmental movement is the degree to which it tends to ignore or obscure state destruction of natural resources.
One chilling example of this was the fairly recent obliteration of the cod stocks off the coast of Newfoundland, Canada.
Now, these cod stocks were among one of the great natural resources of mankind.
When John Cabot first arrived near the shores of Newfoundland 500 years ago, he reported that the cod stocks were so thick that he felt he could actually walk ashore from his ship, and his sailors could simply scoop the fish up in buckets.
For generations, tens of thousands of fishermen made their living harvesting this immense natural resources.
Free of government intervention, they managed to maintain this resource in a manner that sustained itself for centuries.
Now, all this began to change in the late 1960s.
Larger and larger foreign fishing vessels began to ply the waters off Newfoundland.
These new factory-freezer trawlers could not only catch up to 200 tons of fish in a single hour, twice the take of a typical 16th century ship for an entire season, but could be recrewed and supplied by ocean-going tenders and had on-board processing plants with automated filleting machines to boot.
By the early 1970s, hundreds of these massive vessels were plying international waters, effectively strip-mining the sea of fish.
Russia had over 400.
Starting in the late 1960s, the cod catch peaked off Newfoundland at 810,000 tons.
As the amount of fish available began to decline, the international fishing vessels moved off to other waters, leaving the Newfoundland fishermen with a still-healthy resource base.
So all was not lost.
In 1977, following the United Nations Law of the Sea Convention, Canada extended its territorial waters from 12 to 200 miles offshore.
Effectively kicking foreign fishing vessels away from the cod stocks, Atlantic Canadian fishermen were overjoyed.
Sadly, also in 1977, the Government of Canada, through the Department of Fisheries and Oceans, DFO, took over the management of the fisheries, and quickly and decisively went to work.
After getting rid of the foreign fishing fleets, the government then proceeded to subsidize the building of a deep-sea trawler fleet of its very own, and further subsidize the expansion of fish processing plants on shore.
As the new fleet was being constructed, the processing plants lay empty, and so the DFO set up joint ventures with the very same foreign vessels that were supposed to have been kicked outside the 200-mile limit.
To ensure continued domestic employment, these foreign vessels were allowed to further pillage the cod stocks in return for transferring part of their catch to the idle processing plants in Newfoundland.
Now, because so many people had become dependent on government subsidies and programs for their income, a death spiral for the cod industry began.
Many fishermen's wives, sons and daughters began working in the state-subsidized fish processing plants and, as the cod stocks began to diminish, families as a whole began to rely more and more on the income of those working in the plants.
However, the processing plants could only continue to receive their subsidies if fish kept coming in from offshore.
Thus, there were strong incentives to fish even more as the cod stocks began to decline.
As family income declined, fishermen began to directly lobby their local and federal governments for increased subsidies.
The federal government defined the Total Allowable Catch, TAC, and, starting in 1981, the Personal Registration System was instituted by the DFO.
There was also the Lit Entry Licensing System, which granted fishermen licenses to harvest different species, such as crab and lobster, which were generally better paying.
As an unofficial way of controlling numbers, new fishermen were generally classified as part-time, which meant that they had to go through a fairly lengthy but unofficial apprenticeship program before getting their full-time licenses.
Sadly, however, part-time fishermen were only allowed to catch... Things went rapidly downhill from there.
Governments began hurling money at the fishing communities.
Subsidies were handed out for boats.
Seasonal unemployment insurance.
Welfare schemes.
Alternative employment schemes.
One even envisioned that chilly Newfoundland would somehow become the cucumber-growing capital of the world through a system of state-subsidized greenhouses.
And all such regular instant gratification political and economic idiocies.
For instance, in a response to the downturn in the fisheries market in the early 1980s, the federal government created a cow corporation, Fishery Products International, designed to sell more fish and increase the market.
Makes sense, right?
If a resource is running out, the best thing to do is to try and sell more of it.
The total allowable catch, the TAC, was set by the Department of Fisheries and Oceans, supposedly on the advice of its own scientists.
However, intense political pressure was brought to bear on these scientists to produce the, quote, correct, i.e.
politically advantageous, numbers.
No politician wanted to face the wrath of the fishermen by telling them that they were not allowed to catch as much as they wanted or felt they needed to survive.
At first, the scientific methods just proved faulty.
But even after those faults were corrected, politicians simply increased the TAC over and above the recommended levels for the sake of political expediency.
After such excessive quotas remained in place throughout the 1980s, the DFO scientists began recommending drastic cuts over 50% to the total allowable catch in 1989.
The scientific miscalculations were almost incomprehensible.
The DFO scientists based their estimations of cod stocks on the volume of commercial catches, without taking into account massively increased technological efficiencies in fish finding.
Thus, catches remained relatively high even while cod stocks were in precipitous decline.
Also, I mean, fishermen were very aware that the more fish they reported catching, the less their total allowable catch would be, and so underreporting was commonplace.
Finally, fishermen not allowed to catch cod, but allowed to catch other fish, simply dragged their nets along the bottom of the sea and threw away the cod they caught, called bycatch, thus not exactly lowering the incidence of cod destruction.
This was all well-known throughout the 1980s, and everyone who tried to raise the red flag and warn about the coming environmental catastrophe was either ignored or repressed.
The government-subsidized Kirby Commission studied, quote, all the aspects of the Newfoundland industry in 1983, with the notable and regrettable exception of the fish themselves.
If you wanted a sociological analysis of fishing communities, you were in luck.
If you wanted to know whether there would be, say, fish in five years, well... In 1988, the scientific models were updated and a new stock survey revealed that most fish stocks were on the edge of collapse.
DFO experts recommended that the total allowable catch had to be cut by more than 50% for the fish to have a remote chance of survival.
Politicians merely laughed, and after a massive internal turf war, agreed to cut the TAC by ten percent.
As the fishermen continued to overfish, more data poured in confirming that more than sixty percent of the adult cod had been captured now for several years in a row.
Nearly six hundred million dollars of state subsidies flooded into Newfoundland as the economy teetered on the brink of collapse.
As is so often the case, as the end drew near, as endless fleets of state-subsidized fishing vessels plowed back and forth over the emptying seas, local fishermen began to realize the Faustian nature of their bargain with the state.
Talk began to turn from how to best milk state programs towards how the cod might be saved from the disaster every fisherman knew was coming.
They began to descend upon government offices with demands that the total allowable catch be lowered.
They talked to the media.
They protested, marched, wrote petitions.
And as their desperation grew, they began to understand the moral reality of turning power.
Over to the government.
The government had no interest in their long-term futures.
Politicians just look to the next election.
They don't care about cards.
They care about votes!
The people of Newfoundland had taken the tax money, given up control over their own lives, their own communities, and their own resources, and now the time had come to pay the bill.
In a final, mad panic, the inshore fishermen dug into their own emptying pockets and commissioned their own study on the failing codstocks called the Alverson Commission, in the mad hope that their government might respond in a rational manner.
No such luck, of course.
The politicians just smiled, passed the report to their handlers, and went right back to talking about their deep and abiding love to the people of Newfoundland.
The end came as swiftly as one would expect.
After the 1992 fish surveys were released, just over 1% of the 1960s cod stocks remained.
On July 2, 1992, the then Canadian Minister of Fisheries and Oceans announced a moratorium on northern cod fishing.
It was, of course, presented as a short-term solution which has lasted, well, up to the present.
Economically, a complete catastrophe.
19,000 fishermen and plant workers lost their jobs.
20,000 other jobs were lost or harmed.
These jobs weren't exactly evenly distributed geographically.
hundreds of communities, some of them hundreds of years old, were effectively wiped off the map.
Well, why bother with this sordid and disastrous tale of state destruction of the environment?
Well, because it outlines a significant issue, which is often obscured in green criticisms of the free market.
Where property rights are challenging to define and enforce, individuals, it is believed, have an incentive to overuse resources.
This tendency, often called the problem of the commons, goes something like this.
A group of sheep-owning farmers own land in a ring around a common area.
Now, they each benefit individually from letting their sheep graze on the common land, since that frees up some of their own farmland for other uses.
However, if they all let their sheep graze on the commons, they all suffer, since the land will be stripped bare, and so they will end up watching their sheep starve, since their own land has all been turned over to other uses.
In many circles, this is considered an incontrovertible coup de grace for the absolute right of private property, and the free market in general, insofar as it, quote, proves that individual self-interest, rationally pursued, can result in economic and environmental catastrophe.
Due to this problem of the commons, it is argued, the property rights of the individual must be curtailed for the sake of the greater good.
Thus, regulation and government ownership must be instituted to control the excesses of individual self-interest for the sake of long-term stability, blah blah blah.
However, if the problem of the commons is a valid criticism of the problem of overuse of hard-to-allocate resources like air quality and fish stocks, Then is government regulation really a viable solution to this problem?
Well, judging from the above example, it would seem not.
But what lessons can be gleaned from the unbelievable destruction of the greatest fish stocks in the world?
Well, one of the most interesting aspects of using the state to solve the problem of the commons is that the state itself is subject to the problem of the commons.
Since the state is an entity wherein property is owned in common, the problem of selfish exploitation leading to general destruction applies as surely to state property as it does to the common land ringed by greedy and short-sighted farmers.
Just as farmers can destroy the commons while pursuing their individual self-interest, so can politicians, bureaucrats, lobbyists, and assorted other state toadies and courtiers destroy the economy as a whole in pursuit of their own selfish economic and political goals.
So the problem of the commons argues that, due to, quote, common ownership, long-term prosperity is sacrificed for the sake of short-term advantage.
Because no one defends and maintains property that can be utilized by all, that property is then pillaged into oblivion.
And the state is supposed to solve this problem?
How?
That is exactly how the state operates.
Let's look at some examples of how the state pillages the future for the sake of greed in the here and now.
Deficit financing, inflationary monetary expansions, government bonds which future generations must pay out, spending the money taken in through social security which future generations must pay for, Offensive, quote, defense spending, which future citizens will pay for through increased risk of attacks on America.
Massive educational failures which have immensely deleterious effects on future productivity and happiness.
The granting of special powers, rights, and benefits to lobbyists such as unions, public sector employees, and large corporations.
Which result in higher prices and deficits.
I mean, the cost to the US economy for union laws alone is calculated at 50 trillion dollars over the past 50 years.
The failure to adequately maintain public infrastructure, such as roads, schools, bridges, the water supply, and so on, which passes enormous liabilities on to the next generation.
Massive spending on the war on drugs, which increases crime in the future.
The enormous pollution of public lands and other fixed assets, which saves money in the short run, while ruining value in the long run, and heaven knows how much more.
From the above examples, it is easy to see that the problem of the commons applies to the state to a far greater degree than any other social agency or individual.
If we recall our group of greedy farmers, we can easily see that they have a strong interest in avoiding or solving the problem of the commons, since it is they themselves who will suffer from the despoiling of public lands.
However, in the case of the state, those who prey upon and despoil the public purse will never themselves face the direct consequences of their pillaging.
Thus, their desire to prevent, solve, or even alleviate the problem is simply non-existent.
Furthermore, even if the farmers do end up destroying the public lands, they can at least get together and voluntarily work to find a better solution to the problem.
Once the government takes over a problem, however, control passes completely from the private sphere to the public sphere of law, enforcement, corruption, and politics.
Once firmly planted in the realm of the state, not only is the problem of public ownership made incalculably worse, But it cannot ever be resolved, since the predation of the public purse is now defended by all the armed might of the state military.
Consequences evaporate, competition is eliminated, and a mad, free-for-all grab-fest simply escalates until the public purse is drained dry and the state collapses.
This is what happened in the Soviet Union in the 1980s as it became clear that communism was unsustainable.
Kremlin insiders simply stole from the Treasury until the state went bankrupt.
Thus the idea of turning to the state to solve the problem of the commons is akin to the old medical joke about the operation being a complete success with the minor exception that the patient died.
If the problem of the commons is a significant issue in the private sector, and I don't think it is, I think it's actually just a lack of property rights that causes the problem, then turning it over to the government makes it staggeringly worse, turning it from a mildly challenging problem of economic allocation into a suicidal expansion of state power and violence.
And of course, if the problem of the commons is not a significant issue, then surely we don't need the state to solve it at all!
Either way, there is no compelling evidence or arguments to be made for the value, morality, or even efficacy of turning problems of public ownership over to the armed might of the state.
Both logically and ethically, it's the equivalent of treating a mild headache with a guillotine.
Well, thanks so much for listening.
As always, I look forward to your feedback.
You can email me at freedomain at freedomainradio.com and have a look on the web at this fine, fine show at freedomainradio.com.
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