"sean neill" <[EMAIL PROTECTED]> wrote: >The flaws of the market have been known for decades and were fluently >expressed in Hardin's 1950s paper 'The Tragedy of the Commons'.
I agree wholeheartedly. Treating a resource as common is sensible only when the total take of that resource is (and continues to be) well below its recovery rate (e.g. when the total wood removed from a forest each year is much less than the amount of wood the forest grows during the year). We are taking significantly above that amount now for most of the resources still treated as common. I believe that the tragedy of the commons is the real cause of many of the most serious problems boaters, the UK, and even humanity are facing. >Hardin's point was that where there was a 'Common' - a good which all >benefited >from but no-one owned - without some regulation for the common good, the >market would ensure that the resource was destroyed. I haven't read Hardin since my university days, but IIRC his book leads to at least two conclusions. One certainly is that without regulation the common will evenaully be destroyed, and there are too many examples of this having happened. But the second is that regulation effective enough to prevent this is unlikely ever to occur, given the vested interests involved. Because of the latter,IMHO the rational approach is to end the over-consumed commons, by creating ownership of the resources that are now common. The owner of each previously-common resource will now have a financial interest in its conservation at its optimally productive level (to ensure the continuation of the owner's long-term revenue stream from it, and to maximise the net revenue from that stream). Consumption of the resource would no longer be a free good (that you can have simply by taking it), but be allowed only if you make a volume-based payment to the owner. > Examples are fisheries policy and climate change, where attempts are now > belatedly >being made to ensure that the market does not destroy the food and >survival of all. Excellent examples. Take fisheries. Under the current regulation-of-the-commons approach, the principle method that is always used by the regulators (including especially the EU) is quotas. However, imposition of meaningful quotas is always heavily opposed by those taking the resource (e.g. the fishing industry, and the fishing countries), which typically results in quotas being set that reduce in size over the years at a rate slightly behind that of the decline of the stock of the resource. That's why the fisheries have been over-exploited in such a disastrous way. Also, there seems to be much illegal (i.e. unreported) fishing. But without significant revenue to the regulator (because it doesn't sell unites of the resource to the takers), it can't afford the enforcement necessary to prevent this. Similarly, no-one charges for emission into the atmosphere, or for having an extra child (who will consume a lot more resources), so those activities continue to grow effectively unfettered and global warming, threats of extinctions, etc. get worse and worse. If (e.g.) carbon-emission charges (as are now being only very ineffectively discussed and implemented) were imposed by an atmosphere owner (e.g. a global trust), and emission without purchase of an appropriate-capacity emission permit at an auction-derived price were treated by the courts as theft, then I believe the carbon emission problem would soon be solved. Of course, we *would* pay rather more (actually, a lot more) for energy, but that is going to have to happen anyway if we are to survive, I think. Unless we substantially reduce our population, that is. >Two current spectacular failures in national transport >policy are air travel (where the market ensures fares do not reflect >their environmental cost) and rail travel (where the market ensures that >fares are pitched so high that car travel is a cheaper choice despite >its environmental costs). In the first case, the problem is the absence of appropriate exhaust emission charges, which allows airlines to operate at unreasonably low cost levels and thus charge ridiculously low fares. In the second case, the problem is not the rail fares. It is the absence of the equivalent charges for car travel, i.e. road pricing. In other words, the roads are still disastrously being treated as a common. If road charges were set at a level high enough to reduce demand to a level where the roads were uncongested (i.e., roughly, for them to operate at maximum efficiency), rail travel at current fares would be very competitive. Of course, that would mean that we would not be able to afford to travel nearly as much in total as we now do. Again, I think that is a requirement for solving the problem (unless population reduces), but somehow no politician seems to have mentioned that yet. Yet it is quite feasible - think of telecommuting. >The difference is that the demand for holiday >travel is 'elastic' (people will travel more if they can afford it) but >the demand for travel to work is 'inelastic' (people have to get to >work). Travel to work is not inelastic. It is just that the commuter takes longer to respond to travel pricing changes. What we are now seeing is only the result current transport pricing policy which has encouraged people to take jobs that require longish commutes. If the cost of travel experienced by the commuter were more rational (i.e. at the market clearing levels, which are significantly higher than is being paid today), then the commuter would demand higher wages. But those wages might well be uneconomic for his employer. So the employer would tend to relocate to a smaller centre, rather than stay in (e.g.) London (or reduce his workforce through e.g. using more technology). Many smaller cities would be very pleased about such relocation, and some have substantial vacant housing stock that could handle the new residents and help save the SE England green belt. But (surprise!) the decision on the control of commuter rail fares and road pricing is set by a government based in (you guessed it) London, supported by those who do not want to see London house prices go down.. >The issue for the waterways is whether they are seen as a 'Common', i.e. >whether all benefit from access to them and their history, or whether >the destruction of a system, which could have benefited all, by the >market should be accepted, in the way which has occurred for fisheries, >climate and transport. That's a faulty description. It is not the market that would destroy the system. It is the failure to let the market work (by retaining the common) that is destroying the system. We are now trying to consume the waterway resource at an unsustainable level. If everyone pays the market price for what he consumes, then in almost all cases the resource is conserved, and wasteful behaviour is discouraged. If no-one does, or does so at a below-market price (as in a common, and as on the waterways) the resource tends to be destroyed. I am sure that the commons approach has to go, if the resources we value are to continue to exist. Again, unless we reduce the human population. > Specifically, I do not feel that Adrian, as a >Canadian, should be speaking for the interests of market forces in the >UK waterways, at a time when the Spanish owners of BAA appear to be >subordinating the UK national interest in favour of their own >market-driven cashflow. I don't see what my nationality has to do with it. However, Canada's fisheries regulation has also been a disaster (the Pacific halibut is a clear example of this). OTOH, I think it is a good thing that BAA is trying to act as a rational owner. I think it is a bad thing that the UK government regulates BAA's prices (e.g. landing charges to airlines), as this is keeping those charges much too low, resulting in much too much (environmentally-damaging) air travel, and resulting the ongoing cancerous growth of Heath Row. I think ever-increasing air travel, and even air travel at current levels, is not in the long term interest of anyone (individual, national, or global), except perhaps some politicians of course. >The history of whaling shows that, where a >resource grows slower than market interest rates, the market favours >destroying the resource and investing the profits elsewhere. No, it doesn't. It shows that if taking a resource is free of charge, then it pays the taker to continue to take until the last unit is taken and the resource is destroyed, as the taker has no financial interest in the long term existence of the resource. If he has to pay the market-clearing price for each unit of the resource he takes, he will stop taking well before the resource runs out. The Japanese are not paying per whale. The IWC is not receiving revenue per whale. Ergo, whales are in trouble. >BAA and BW executives will probably move on once they have taken their profits >and >destroyed the resource. Bad examples. Neither BAA (airport capacity) nor BW (waterway capacity) is destroying its resource. In fact, it appears that there are more boats on the waterways now than at any time in history. However, if BW is prevented from optimising its profit from them, and is not given other financial resources to make up the gap between the potential revenue from boating and the cost of maintaining and operating the network properly, then the resource will indeed be destroyed. The recent Welsh breach shows how. But I'm encouraged. Although I've disagreed with a number of Sean's points, his posting is one of the few that has ever raised what I am sure are the real issues and the theoretical background concerning (e.g.) moorings, navigation charges, fuel prices (not to mention life, the universe, and everything). Now if only we can have a productive discussion as a result. i.e. *not* one that is based on the idea boating should be kept cheap through subsidies. How about that for a New Year's Resolution? Adrian Adrian Stott 07956-299966
