The third element is the continuous threat 

 of entry. If the excess profits observed in one 

 time period continue, or if they are expected 

 to continue, entry will take place. Expecta- 

 tions and the competitive illusion play a I'ole 

 in all industries but the great flexibility in 

 the capital instruments employed in fisheries 

 tend to make the interaction between market 

 conditions, expectations, and capacity par- 

 ticularly close (Pontecorvo and Vartdal, 1967). 



Supply fluctuations, excess capacity, the 

 rapidity of responsiveness to changes in the 

 market, and the influence of expectations all 

 contribute to short I'un instability in fisheries. 

 Control of capacity, improvements in fore- 

 casting supply in order to reduce uncertainty, 

 plus recognition that capacity sufficient to 

 capture some average level of catch less than 

 the maximum sustainable yield may be ap- 

 propriate, are all elements in a management 

 program geared to meeting the conditions im- 

 posed by the short run dynamics of fisheries. 



Long Run Equilibrium 



If short run economic objectives are defin- 

 able in the terms indicated above it is ap- 

 propriate to inquire next about the long run 

 equilibrium conditions. Economic analysis of 

 fisheries has accepted as given the biological 

 yield function for the species in question, as 

 well as the usual assumptions of static equi- 

 librium analysis of full employment and factor 

 mobility. In these circumstances the condition 

 of Pareto optimality is roughly fulfilled if the 

 policy recommendations (essentially creation 

 of a set of regulations aimed at maximizing 

 the rent of the resource and in all probability 

 requiring barriers to entry) required to ration- 

 alize the fishery are met. Within the frame- 

 work of economic analysis (maximization of 

 Gross National Product) this is a necessary 

 and sufficient condition for making the maxi- 

 mization of the net economic yield the ap- 

 propriate goal of fisheries management. Any 

 alternative is less satisfactory in that it will 

 result in a lower level of material well-being 



(GNP).22 



-■^ A ci-ucial assumption is that the opportunity 

 cost for labor is positive. Most of the attacks on the 

 concept of economic regulation of fisheries assert the 

 contrary. Perhaps the needed empirical investigation 

 of this point could start with a classification such as 

 suggested in Approaches to Fisheries Management. 



Attacks on this goal have come from two 

 sources, biologists and fisheries administra- 

 tors, and also from within the economics pro- 

 fession. The position of the former group rests 

 in large part, in my opinion, on a funda- 

 mental misconception concerning the mean- 

 ing of economic optimization. Economics is 

 not sufficient to explain (or optimize), par- 

 ticularly in the short run, the entire set of 

 variables involved in a fishery. The economist 

 accounts for the social problems by his as- 

 sumption of full employment and factor mo- 

 bility. He does not normally account for po- 

 litical factors except indirectly in his under- 

 lying assumption of human rationality which 

 tends to force the political preferences into 

 the same ordering as the economic. 



A bioeconomic position dominates thinking 

 about fisheries management simply because 

 there is no body of social or political theory 

 sufficiently powerful (relative to welfare maxi- 

 mization in economics or population dy- 

 namics in biology) to force a modification of 

 either the biological or economic position. 

 In these circumstances, which appear unlike- 

 ly to change in the foreseeable future, political 

 and social considerations can only be con- 

 sidered on an ad hoc basis. More specifically, 

 it is normally true that the biological optimum 

 and economic optimum are consistent with 

 each other in that both will protect the stock. 

 The economic goal is more general and there- 

 fore preferable in that in addition to protect- 

 ing the stock it also provides the maximum 

 economic benefits to society. Any deviation 

 from the economic maximum involves there- 

 fore a cost, a cost measurable in terms of 

 output foregone. Nothing in this argument 

 suggests that ad hoc reasons are not sufficient 

 grounds (given the weakness in the two under- 

 lying assumptions in certain circumstances) 

 to make an alternative objective (political, 

 military, social, etc.) either the primary or a 

 subsidiaiy goal of fishery management. 



In this circumstance the economist's primary 

 concern would be to calculate the cost of the 

 alternative. The latter calculation presupposes 

 that the alternative can be specified, a con- 

 dition that is seldom met. What tends to 

 emerge as the management goals in fisheries 

 under the long run equilibrium condition that 

 dominates today's thinking is an unspecified 



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