Exploring the Commons

14. "I had long been puzzled by the behavior of the whaling industry.... [W]hales, which could provide a permanent resource if harvested prudently, were overexploited and driven toward extinction. This mysteriously "self-destructive" behavior of the industry was explained to me by a Japanese economist. Like most conservationists, I had assumed the industry's goals would be to maximize the sustainable annual yield of whales. In fact the industry has been trying to maximize the present value of the whale resource. If various species of whales are driven to extinction... the capital can be turned to the rape of another (in the minds of economists) array of available resources. Such behavior [is] perfectly rational in the dominant economic paradigm...." (From Erlich, Paul. "Environmental Disruption: Implications for the Social Sciences." Social Science Quarterly, March 1981, p 10.) From what you have learned in these readings, do you think Erlich (or the unnamed Japanese economist) understands the usual view of economists about why whales are threatened with extinction? Explain. (Hint: Does the whaling industry have goals or do individual whalers have goals?)

15. Suppose that in Wayzata Sea there are two areas that can produce fish for commercial fishermen, the North Shore and the South Shore. The table below shows how the tons of fish caught change as more boats enter each the fishing area.

Number of Boats Catch on North Shore Average Catch on North Shore Additional Catch on North Shore Catch on South Shore Average Catch on South Shore Additional Catch on South Shore

1 60 60 60 90 90 90

2 120 160 80 70

3 180 210

4 240 260

5 300 305

(Hint: To correctly answer the questions below, it is very useful to complete the Average and Additional columns in the table.)

a) We will call our fishermen Primus, Secundus, Tertius, Quartus, et Quintus. Suppose our fishermen operate independently of each other. On which shore should the first, Primus, go? Secondus launches next. Where will he go? Where will Tertius go? Quartus? Quintus?

b) Suppose instead that Primus owns the sea and wants to maximize the tonnage caught by the five boats. How will he allocate them? By how much will the size of the catch increase?

c) In making their decisions in part a, the fishermen looked at the numbers in the columns. To get the largest possible catch in part b, Primus looked at the numbers in the columns.

d) What economic concept is illustrated in this problem?