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Steve Tonello

Professor Kaisen

Overfishing Crisis

In today’s world, the important question, when thinking about over-fishing, is “how

much is too much?”. There are so many food markets in today’s world that play a part in billions

of people’s lives, but the food market is a vast market that needs to be looked at, and in

particular, the fishing market needs to be examined. Just to show how much fishermen are relied

upon in today’s world, a quote from the Netflix special Cod Is Dead struck my interest. Scott

Lang, former mayor of New Bedford, stated that “The people of New Bedford literally have the

ocean running through their veins. If you throw a rock into the New Bedford harbor, that ripple

is felt around the world.” (Rotten, 2018). These two sentences are so important because they

show the effect of fishermen, in this case New Bedford fishermen, throughout everyone’s daily

lives.

To see the bigger picture, it is important to break down the fishing market as a whole. In

a market, there is always a buyer and a seller, and in this market, the fishermen are the sellers.

Their job is to catch and supply the fish to the other side of the market, the consumers. This job

can be extremely stressful at times because they may be forced to make decisions on the margin.

The consumers are crucial to this market because they can change their quantity demanded,

based on the price of the fish. When one puts these two sides of the market together, we get the

fishing market, which has the power to feed billions of people across the world, but as we’ll see

also has the potential to destroy thousands of fisheries throughout the world.

Like all markets, supply and demand dictates the market price. The equilibrium point is

where supply intersects demand on a graph and is where the supply and demand equal each other
for a good. When working, fishermen must always control the amount of fish they catch in order

to prevent the costs of overfishing. By doing this, not only do they have the power to pace

themselves and combat against overfishing, but they can also dictate how much fish is being

supplied to consumers. A shortage is an important factor that can have great power over the price

in the fishing market as well. According by Hubbard (2018), a shortage is defined as, “a situation

in which the quantity demanded is greater than the quantity supplied.”. Shortages can occur if

fishermen severely overfish, and it would greatly affect both the consumer and supplier both for

the worse. By result of overfishing, fish would become scarcer, and if there’s a high demand for

the fish, prices would shoot up and buyers would pay more as a result. Buyers would lose some

of their spending power as a result, and other markets could potentially be affected thanks to this

loss in spending power. This is just one example of how overfishing creates negative

externalities for other people and markets.

The law of supply is a very important concept that ties into the fishing market and the

overfishing crisis. The law of supply is defined as an economic principle that states when the

price of a good rises, firms have the incentive to produce more of that good and when the price

drops, they have less incentive to produce the good (Hubbard, 2018). I believe that the law of

supply can be seen as some form of justification for the result of overfishing. According to the

law, fishermen would be stupid to not produce more fish when its price increases. In economics

and in life, people are drawn towards monetary incentives (Hubbard, 2018). In this case,

fishermen are obviously more inclined to fish in order to maximize their monetary incentive.

This is why they fish more when the market price is favorable and fish less when it’s not.

Fishermen also have to worry about opportunity costs and transaction costs when deciding when

is the best time for them to fish. They have to monitor the market price of fish, while deciding
whether their marginal benefit outweighs their marginal costs of spending hours at a time to fish.

While I am not giving justification for overfishing, I am providing the law of supply and how it

can be a source of this overfishing problem.

When talking about the fishing market, it is important to keep in mind another important

concept, marginal analysis. Marginal analysis is defined as “analysis that involves comparing

marginal benefits and marginal costs” (Hubbard, 2018). With that being said, in the fishing

market, the marginal benefit would obviously be the extra money that would be made if one

caught more fish. In theory, one could fish all they want in order to maximize their revenue. But

with marginal analysis, it is important to not forget about the marginal cost. With everything in

life, there is a cost to it. In the example above, the fishermen would have to consider the

strenuous effects of overfishing and what it can do to the business and world as a whole. For

example, as stated previously, overfishing can lead to the destruction of fisheries, and possible

shortages of fish. With the possible event of a fish shortage, producers wouldn’t have enough

fish to produce and their business would be in crisis. Opportunity costs are also to be considered

here, because the fishermen could be using their time to do other things as well. If one fishes too

much, there will be costs that would hurt massively in the long run. That is why fishermen must

only continue to fish if the marginal benefit is equal to or less than the marginal cost.

It is important to point out that fish are a common resource. A common resource is

rivalrous and nonexcludable (Hubbard, 2018). They are rivalrous because if a fisherman catches

a fish, another person cannot catch that same fish. They are nonexcludable because no one is

excluded from being able to catch a fish. A market failure can exist in the fishing market because

of the tragedy of the commons. The tragedy of the commons is defined as “the tendency for a

common resource to be overused” (Hubbard, 2018). This can be seen in the fishing market
because when fishermen go out to fish, they are only interested in catching the most fish in order

to make a profit. It is hard to blame them, since their livelihood depends on it, but overfishing

does create a negative externality in the market.

One concept that is very much applicable to this discussion of overfishing is Coase’s

Theorem. This theorem, by definition, states that when there is a complete competitive market

with little or no transaction costs and well-defined property rights, private bargaining may be a

potential solution to the negative externality (Hubbard, 2018). In this case, the negative

externality would be overfishing, which affects many fisheries and could create a shortage in

fish. The question is, are transaction costs low enough to beget an allocation of catch shares

amongst fishermen and will this method be productively efficient? One flaw with the private

bargaining amongst fisherman is that the fishing industry is wildly complex and competitive.

There are thousands of fishermen whose lives depend on catching millions of fish, with a goal of

making a profit, and obviously it would be difficult to clearly define property rights of fish

amongst them. There are millions of fish across all seas, therefore, it would be impossible to

clearly define ownership rights or restrictions on fishing, which has led us to the problem of

overfishing.

In order to correct the negative externality of overfishing in the market, the Environment

Defense Fund has proposed the idea of “catch shares”. On their website, catch shares are defined

as a promising solution to revive fisheries and fishing communities (Environmental Defense

Fund, 2019). Catch shares are broken down into 7 steps, and it is necessary to know how they

work. Step 1 requires scientists to determine the health of fishery and specifically, how many

fish can be caught sustainably. Step 2 requires fishery managers to set an overall limit to the

amount of fish that can be caught so that there are enough fish left in the water to remain healthy
in their population. Step 3 requires a scientifically determined catch limit to be divided among

fishermen. Step 4 says that each fisherman is allocated a percentage of the total, known as a

share or quota. Step 5 explains that fishing captains can fish whenever they want in order to

fulfill their share or quota. Step 6 says that fishermen, since they’re fishing much more carefully,

will actually catch less discard fish, known as bycatch. Lastly, step 7 explains that as the

fisheries recover, the overall catch limit will increase with time and that fishermen can catch

more over time (Environment Defense Fund, 2019). This government intervention is necessary

in order to prevent shortages of fish and overfishing. With catch shares being put into play,

fisheries are able to recover from the damage of overfishing in the short term, and they will also

benefit from this government action in the long run as well.

While on the discussion of catch shares and private bargaining, I believe that when

combined, catch shares and private bargaining can bring out many positives and potential

solutions to overfishing. First, with catch shares being a possible solution to overfishing, set forth

by the Environmental Defense Fund, I believe that fisherman can come together in order to stop

the overfishing problem. There would be some transaction costs such as legal fees and the

process could be time-consuming at times, but the catch shares do create a realistic and pausable

solution to overfishing. Through private bargaining, along with supervision of the Environmental

Defense Fund, fishermen can ethically and logically fish without creating a negative externality

to others. Also, fisherman can still fish whenever in order to fulfill their quota according to step 5

(Environment Defense Fund, 2019). The producers will have their shares spread amongst each

other to the point which they’re working productively efficient and at the same time they’re

restoring nearby fisheries and alleviating the negative externality of overfishing.

 While overfishing has become an ongoing crisis across the United States and the rest of

the world, I believe that catch shares have the potential to be a possible solution to overfishing.

Overfishing is a negative externality that needs to be fixed and through some private bargaining

and with the help of the Environmental Defense Fund, I believe that catch shares will surely

make progress to this problem. Catch shares pose benefits in both the short term and long term

which also makes it more appealing. `

 Bibliography Page

Rotten. Cod is Dead. Directed by David Mettler. Netflix. 2018.

Environmental Defense Fund. "How Catch Shares Work." Accessed May 16, 2019.

https://www.edf.org/oceans/how-catch-shares-work-promising-solution.

Measuring the Effects of Catch Shares "See for Yourself How Catch Share Programs Affect Fish

Stocks, Fishing Businesses, and Local Communities.". Accessed May 16, 2019.

https://www.catchshareindicators.org/home/.

TheEconomist. 2008. “A rising tide.”. TheEconomist. September 18, 2008

https://www.economist.com/science-and-technology/2008/09/18/a-rising-tide

TheEconomist. 2012. “How to stop the fishermen fishing.” TheEconomist. February 25, 2012.

Leschine-Hoar, Clare. 2016. “Study: Program to Protect Is Saving Fishermen’s Lives Too.”.

NPR. February 16, 2016.

Hubbard, R. Glenn., and O’Brien, Anthony Patrick. 2018. Microeconomics. New York: Pearson.

https://lccn.loc.gov/2017050534

WWF. "Fishing Problems: Poor Fisheries Management." Accessed May 16, 2019.

https://wwf.panda.org/our_work/oceans/problems/fisheries_management/.