direction of change. There are several reasons 

 for realizing, however, that one may not choose 

 to move to the point of maximum rent. This 

 reservation is strongest in short-run analysis, 

 but several parameters in a bioeconomic model 

 can be expected to shift in the long run. 



Before proposing that a fishery should be 

 managed at the point of maximum net economic 

 yield, one must first show that the present value 

 of the fishery at maximum sustainable net 

 economic yield is greater than the value of the 

 status quo by more than the transactions costs 

 of moving to the new point. This was brought 

 out dramatically by Wantrup (FAO 1962) and 

 also in a comment by Crutchfield to the effect 

 that not reducing the existing level of fishing 

 effort could conceivably be a country's cheapest 

 unemployment or welfare policy in cases where 

 the excess number of fishermen truly had no 

 viable alternative to fishing.^ 



However, even if the maximum sustainable 

 net economic yield point is greater in value than 

 status quo by all relevant costs of change, this 

 does not preclude the possibility that some 

 other point, intermediate to those two, might 

 be more desirable. In summary, the proof of 

 superiority of a theoretical optimum over a 

 status quo position leads to an argument for 

 direction of change in effort, but does not show 

 the magnitude of change until the costs of such 

 a change are themselves considered. 



PROBLEMS POSED BY 

 REDISTRIBUTION OF INCOME 



Such a recommendation as moving to the 

 point of maximum net economic yield is roughly 

 akin to the statement that a readjustment is 

 recommended whenever the dollar value to 

 potential gainers is greater than the dollar 

 value to potential losers. This is the famous 

 Kaldor-Hicks criterion for an improvement in 

 social welfare. The criticisms of this criterion 

 are now well-known (Rothenberg, 1961) but of 

 them all, the most commonly cited is the 

 inability to judge among different income dis- 

 tributions. To say that one state is better than 



■■' The comment was made in August 1969, durins 

 discussions after a panel presentation given at Oregon 

 State University. 



another state, when even one individual is worse 

 off in the former state, is to make those inter- 

 personal utility comparisons which the eco- 

 nomics profession has largely disavowed. 



To confess that economists have no straight- 

 forward technique for judging among alternative 

 income distributions does not alter the fact that 

 judgments can and will be made. It does mean 

 that economists should try to describe the 

 effects of alternative management decisions 

 upon the distribution of income. In addition to 

 this, economists can realize that the general 

 interpretation of equity seems to frequently 

 preclude drastic changes in the distribution of 

 income. Management schemes in bioeconomic 

 models should include systems which compen- 

 sate losers whenever possible. It may be wise to 

 attach grandfather clauses, unemployment I'elief 

 funds, and the like to licensing or other limited 

 entry proposals. The costs of preserving stability 

 and the existing distribution of income should 

 not be overlooked, creating a parallel to the 

 awesome headaches of our contemporary farm 

 program. 



AN OPERATIONAL PROPOSAL — 

 THE USE OF TARGET VARIABLES 



Academics who would wish to have a voice 

 in public policy cannot devote themselves to 

 being solely naysayers. Decisions must and will 

 be made. While there are many reservations 

 which must be made about bioeconomic models, 

 there is also something intrinsically appealing 

 about them. How can one use the information 

 concerning net economic yield and still consider 

 other objectives? 



One possible technique is to simply array a 

 group of options for the authority who has 

 received society's mandate. However, it is likely 

 that the fishery management body itself will be 

 somewhat removed from direct interaction with 

 the society. Hence, they will probably need to 

 infer relative values from another source. Our 

 experience with many operating agencies has 

 tended to show that "the wheel that squeaks 

 gets the grease." Thus, the use of operating 

 agency discretion may not reflect the values of 

 the underlying society. 



A second technique is that proposed in most 

 bioeconomic models. Namely, net economic 



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