costs, including a minimum necessary profit to the 

 vessel owner) from the fishery.' More fisii can be 

 taken by pushing fishing effort beyond that point, 

 but since costs will then increase steadily while 

 revenues will increase at a declining rate, the 

 additional fish will not be worth what it costs to 

 produce them. In other words, from an economic 

 point of view, the proper output is that at which 

 the additional cost of the last units produced is 

 just offset by their additional value. 



Furthermore, because the high seas fishery is a 

 common property resource, in the sense that no 

 fisherman has exclusive access to it so that he can 

 keep other fishermen from sharing in its exploita- 

 tion, any situation in which profits are earned, i.e., 

 total revenues exceed total costs, will induce 

 additional fishermen to enter the fishery or en- 

 courage additional fishing effort on the part of 

 those already in the industry. This will take place 

 until total revenues and total costs are equal. 

 Additional effort will then impose losses on some 

 fishermen who will eventually be forced out of the 

 fishery. 



Under these circumstances, no individual fish- 

 ing unit "can reap the benefit of 'investment' in 

 future supplies," and "has no incentive to restrict 

 fishing effort in the current period to that which 

 will maximize either physical or economic yield 

 over time." Any attempt to "conserve" by one 

 fisherman or group of fishermen simply increases 

 the take of others. "The more competitive the 

 industry involved, the more destructive the race to 

 catch fish before others can take them."* The 



See, for example, Scott, The Economic Theory of a 

 Common Property Resource: The Fishery, 62 J. Pol. 

 Econ. 124 (1954); Crutchfield, Management of the North 

 Pacific Fisheries: Economic Objectives and Issues, 43 

 Wash. L. Rev. 283 (1967); Crutchfield, The Fisheries: 

 Problems in Resource Management (1965); Crutchfield 

 and Zellner, Economic Aspects of the Pacific Halibut 

 Fishery, Fishery Industrial Research, Vol. I, No. 1, pp. 

 14-15 (1962); Christy and Scott, Common Wealth in 

 Ocean Fisheries (1965); Scott, The Fishery: The Objec- 

 tives of Sole Ownership, 66 J. Pol. Econ. 116 (1955); 

 Turvey, Optimization and Sub-optimization in Fishery 

 Regulation, 54 Amer. Econ. Rev. 64 (1964); and The 

 Economics of Fisheries, (Turvey and Wiseman eds., FAO, 

 1957). 



*A Note on Economic Aspects of Fishery Manage- 

 ment, (herein-after cited as Economic Aspects of Fishery 

 Management). FAO Fisheries Circular No. 27, at 3 

 (1966). The Circular was produced by the Fishery 

 Economics and Development Branch of tiie Department 

 of Fisheries, FAO, based on a report prepared by 

 Professor Crutchfield of a meeting of biologists and 

 economists held in Rome, Sept. 27-28, 1965. Of course, 

 the fishery conventions seek to limit fishing effort so that 

 physical yield over time wUl be maximized. 



result often is an industry that is overcapitalized, 

 i.e. with excess, unused capacity in fishing gear 

 and men, relative to what is required to catch the 

 maximum sustainable yield. Total costs incurred 

 by all those exploiting a fishery may then actually 

 exceed their total revenues and total production 

 may even be less than could be obtained with a 

 lesser investment of effort. It is not only possible 

 but normal for such excess capacity to develop 

 quickly and to persist over long periods of time, 

 because of the traditional immobility of labor in 

 the fisheries and the related ability to maintain 

 capital equipment at little or no real cost. It is no 

 accident that the most valuable fish are often 

 harvested by fishermen with the lowest incomes. 



A number of unpleasant corollaries follow from 

 this analysis. Starting from an equillibrium point 

 at or beyond maximum sustainable yield, if 

 market demand for the end product increases, the 

 final result will be a higher price, higher real costs 

 and a lower catch. Similarly, technological im- 

 provements in fishing, processing, or marketing 

 which lower costs of production, will eventually 

 reduce output and raise prices to consumers. 



The biological concept of maximum sustainable 

 yield has also been criticized from another point of 

 view.' The concept assumes that there is an 

 inherent public interest in maintaining the fish 

 population at a relatively fixed level over time. 

 Accordingly, the biologist seeks a management 

 plan which will maximize the ultimate recovery 

 from the population. This is the essential meaning 

 of maximum sustainable yield. But if the objective 

 is to maximize net economic return, it may be 

 sensible to exploit the fish population at a rate 

 which exceeds the maximum sustainable yield for 

 some time because the social benefits of such 

 excess production during a "critical" period may 

 exceed the social costs of a lower ultimate 

 recovery.^ 



The maximization of net economic return also 

 requires that a given output be produced at the 

 lowest possible cost, i.e., with the least amount of 



This point of view is presented by Victor Lewis 

 Arnold, Common Property Natural Resources: Notes on 

 Structural and Behavioral Variables Within Alternative 

 Frameworks (1968) (Unpublished paper). 



^The "optimum sustainable yield" objective of the 

 Geneva Convention on Fishing and the Conservation of 

 the Living Resources of the High Seas is not intended to 

 adopt these social and economic considerations as criteria 

 for fishery management. 



VIII-47 



