what was the main objective and motivation behind gordon 1954 what was
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What was the main objective and motivation behind Gordon 1954? What was the author
trying to prove/ disprove/ show and why?
Explain economic rents and describe what type of market structure (pure competition vs.
monopoly) would provide the highest rents. Draw a diagram and identify the optimal harvest
level, cost, and rent or profit made under this harvest level.
Explain how the effort will be allocated in a simple two fishery ground model (**hint** think of
marginal productivity). Show why this environment will never reach a steady state (**hint**
how will fisherman shift their effort between the two grounds?). Draw a diagram if
necessary.
What is the functional form we assume for the production function (aka the landings'
function) and why do we use this functional form? Is it realistic?
Which more optimal, sole ownership or open access? Why?
Do you think Gordon is implying that we only give one fisherman the right to fish? Explain. If
not, what do you think are policy implications of the findings?/n | CHICAGO JOURNALS
The Economic Theory of a Common-Property Resource: The Fishery
Author(s): H. Scott Gordon
Source: The Journal of Political Economy, Vol. 62, No. 2 (Apr., 1954), pp. 124-142
Published by: The University of Chicago Press
Stable URL: http://www.jstor.org/stable/1825571
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Journal of Political Economy.
STOR
http://www.jstor.org THE ECONOMIC THEORY OF A COMMON-
PROPERTY RESOURCE: THE FISHERY¹
H. SCOTT GORDON
Carleton College, Ottawa, Ontario
I. INTRODUCTION
T
HE chief aim of this paper is to ex-
amine the economic theory of nat-
ural resource utilization as it per-
tains to the fishing industry. It will
appear, I hope, that most of the prob-
lems associated with the words "con-
servation" or "depletion" or "overex-
ploitation" in the fishery are, in reality,
manifestations of the fact that the natu-
ral resources of the sea yield no economic
rent. Fishery resources are unusual in the
fact of their common-property nature;
but they are not unique, and similar
problems are encountered in other cases
of common-property resource industries,
such as petroleum production, hunting
and trapping, etc. Although the theory
presented in the following pages is worked
out in terms of the fishing industry, it is,
I believe, applicable generally to all cases
where natural resources are owned in
common and exploited under conditions
of individualistic competition.
II. BIOLOGICAL FACTORS
AND THEORIES
The great bulk of the research that has
been done on the primary production
phase of the fishing industry has so far
been in the field of biology. Owing to the
¹ I want to express my indebtedness to the
Canadian Department of Fisheries for assistance
and co-operation in making this study; also to Pro-
fessor M. C. Urquhart, of Queen's University,
Kingston, Ontario, for mathematical assistance
with the last section of the paper and to the Econo-
mists' Summer Study Group at Queen's for afford-
ing opportunity for research and discussion.
lack of theoretical economic research,²
biologists have been forced to extend the
scope of their own thought into the eco-
nomic sphere and in some cases have
penetrated quite deeply, despite the lack
of the analytical tools of economic the-
ory.³ Many others, who have paid no
specific attention to the economic as-
pects of the problem have nevertheless
recognized that the ultimate question is
not the ecology of life in the sea as such,
but man's use of these resources for his
own (economic) purposes. Dr. Martin D.
Burkenroad, for example, began a recent
article on fishery management with a
section on "Fishery Management as Po-
litical Economy," saying that "the Man-
agement of fisheries is intended for the
benefit of man, not fish; therefore effect
of management upon fishstocks cannot
be regarded as beneficial per se.”4 The
2 The single exception that I know is G. M.
Gerhardsen, "Production Economics in Fisheries,"
Revista de economía (Lisbon), March, 1952.
3 Especially remarkable efforts in this sense are
Robert A. Nesbit, "Fishery Management" (“U.S.
Fish and Wildlife Service, Special Scientific Re-
ports," No. 18 [Chicago, 1943]) (mimeographed),
and Harden F. Taylor, Survey of Marine Fisheries of
North Carolina (Chapel Hill, 1951); also R. J. H.
Beverton, "Some Observations on the Principles of
Fishery Regulation," Journal du conseil permanent
international pour l'exploration de la mer (Copen-
hagen), Vol. XIX, No. 1 (May, 1953); and M. D.
Burkenroad, "Some Principles of Marine Fishery
Biology," Publications of the Institute of Marine Sci-
ence (University of Texas), Vol. II, No. 1 (Septem-
ber, 1951).
4 "Theory and Practice of Marine Fishery Man-
agement," Journal du conseil permanent international
pour l'exploration de la mer, Vol. XVIII, No. 3
(January, 1953).
124 THEORY OF A COMMON-PROPERTY RESOURCE
great Russian marine biology theorist,
T. I. Baranoff, referred to his work as
"bionomics" or "bio-economics," al-
though he made little explicit reference
to economic factors.5 In the same way,
A. G. Huntsman, reporting in 1944 on
the work of the Fisheries Research
Board of Canada, defined the problem of
fisheries depletion in economic terms:
"Where the take in proportion to the
effort fails to yield a satisfactory living to
the fisherman";6 and a later paper by the
same author contains, as an incidental
statement, the essence of the economic
optimum solution without, apparently,
any recognition of its significance.7 Upon
the occasion of its fiftieth anniversary in
1952, the International Council for the
Exploration of the Sea published a Rap-
port Jubilaire, consisting of a series of
papers summarizing progress in various
fields of fisheries research. The paper by
Michael Graham on "Overfishing and
Optimum Fishing," by its emphatic
recognition of the economic criterion,
would lead one to think that the eco-
nomic aspects of the question had been
extensively examined during the last
half-century. But such is not the case.
Virtually no specific research into the
economics of fishery resource utilization
has been undertaken. The present state
5 Two of Baranoff's most important papers-
"On the Question of the Biological Basis of Fisher-
ies" (1918) and "On the Question of the Dynamics
of the Fishing Industry" (1925)-have been trans-
lated by W. E. Ricker, now of the Fisheries Re-
search Board of Canada (Nanaimo, B.C.), and issued
in mimeographed form.
6 "Fishery Depletion," Science, XCIX (1944),
534.
125
of knowledge is that a great deal is known
about the biology of the various com-
mercial species but little about the eco-
nomic characteristics of the fishing in-
dustry.
The most vivid thread that runs
through the biological literature is the
effort to determine the effect of fishing on
the stock of fish in the sea. This discus-
sion has had a very distinct practical
orientation, being part of the effort to
design regulative policies of a “conserva-
tion" nature. To the layman the problem
appears to be dominated by a few facts
of overriding importance. The first of
these is the prodigious reproductive po-
tential of most fish species. The adult
female cod, for example, lays millions of
eggs at each spawn. The egg that hatches
and ultimately reaches maturity is the
great exception rather than the rule. The
various herrings (Clupeidae) are the
most plentiful of the commercial species,
accounting for close to half the world's
total catch, as well as providing food for
many other sea species. Yet herring are
among the smallest spawners, laying a
mere hundred thousand eggs a season,
which, themselves, are eaten in large
quantity by other species. Even in in-
closed waters the survival and reproduc-
tive powers of fish appear to be very
great. In 1939 the Fisheries Research
Board of Canada deliberately tried to
kill all the fish in one small lake by poi-
soning the water. Two years later more
than ninety thousand fish were found in
the lake, including only about six hun-
dred old enough to have escaped the
poisoning.
7"The highest take is not necessarily the best.
The take should be increased only as long as the
extra cost is offset by the added revenue from sales"
(A. G. Huntsman, "Research on Use and Increase
of Fish Stocks," Proceedings of the United Nations
Scientific Conference on the Conservation and Utiliza-
tion of Resources [Lake Success, 1949]).
The picture one gets of life in the sea
is one of constant predation of one spe-
cies on another, each species living on a
narrow margin of food supply. It re-
minds the economist of the Malthusian
law of population; for, unlike man, the 126
fish has no power to alter the conditions
of his environment and consequently
cannot progress. In fact, Malthus and
his law are frequently mentioned in the
biological literature. One's first reaction
is to declare that environmental factors
are so much more important than com-
mercial fishing that man has no effect on
the population of the sea at all. One of
the continuing investigations made by
fisheries biologists is the determination
of the age distribution of catches. This is
possible because fish continue to grow in
size with age, and seasonal changes are
reflected in certain hard parts of their
bodies in much the same manner as one
finds growth-rings in a tree. The study of
these age distributions shows that com-
mercial catches are heavily affected by
good and bad brood years. A good brood
year, one favorable to the hatching of
eggs and the survival of fry, has its effect
on future catches, and one can discern
the dominating importance of that brood
year in the commercial catches of suc-
ceeding years. Large broods, however,
do not appear to depend on large num-
bers of adult spawners, and this lends
support to the belief that the fish popu-
lation is entirely unaffected by the ac-
tivity of man.
8
H. SCOTT GORDON
There is, however, important evidence
to the contrary. World Wars I and II,
during which fishing was sharply cur-
tailed in European waters, were followed
by indications of a significant growth in
8 One example of a very general phenomenon:
1904 was such a successful brood year for Norwegian
herrings that the 1904 year class continued to out-
weigh all others in importance in the catch from 1907
through to 1919. The 1904 class was some thirty
times as numerous as other year classes during the
period (Johan Hjort, "Fluctuations in the Great
Fisheries of Northern Europe," Rapports et procès-
verbaux, Conseil permanent international pour l'ex-
ploration de la mer, Vol. XX [1914]; see also E. S.
Russell, The Overfishing Problem [Cambridge, 1942],
p. 57).
fish populations. Fish-marking experi-
ments, of which there have been a great
number, indicate that fishing is a major
cause of fish mortality in developed
fisheries. The introduction of restrictive
laws has often been followed by an in-
crease in fish populations, although the
evidence on this point is capable of
other interpretations which will be noted
later.
General opinion among fisheries biolo-
gists appears to have had something of a
cyclical pattern. During the latter part
of the last century, the Scottish fisheries
biologist, W. C. MacIntosh, and the
great Darwinian, T. H. Huxley, argued
strongly against all restrictive measures
on the basis of the inexhaustible nature
of the fishery resources of the sea. As
Huxley put it in 1883: “The cod fishery,
the herring fishery, the pilchard fishery,
the mackerel fishery, and probably all
the great sea fisheries, are inexhaustible:
that is to say that nothing we do seri-
ously affects the number of fish. And any
attempt to regulate these fisheries seems
consequently, from the nature of the
case, to be useless."¹⁰ As a matter of fact,
there was at this time relatively little re-
striction of fishing in European waters.
Following the Royal Commission of
1866, England had repealed a host of
restrictive laws. The development of
steam-powered trawling in the 1880's,
which enormously increased man's pred-
atory capacity, and the marked improve-
ment of the trawl method in 1923 turned
the pendulum, and throughout the inter-
war years discussion centered on the
problem of "overfishing" and "deple-
tion." This was accompanied by a con-
siderable growth of restrictive regula-
⁹ See his Resources of the Sea published in 1899.
10 Quoted in M. Graham, The Fish Gate (London,
1943), p. 111; see also T. H. Huxley, "The Herring,"
Nature (London), 1881. THEORY OF A COMMON-PROPERTY RESOURCE
tions." Only recently has the pendulum
begun to reverse again, and there has
lately been expressed in biological quar-
ters a high degree of skepticism concern-
ing the efficacy of restrictive measures,
and the Huxleyian faith in the inex-
haustibility of the sea has once again
begun to find advocates. In 1951 Dr.
Harden F. Taylor summarized the over-
all position of world fisheries in the fol-
lowing words:
Such statistics of world fisheries as are avail-
able suggest that while particular species have
fluctuated in abundance, the yield of the sea fish-
eries as a whole or of any considerable region has
not only been sustained, but has generally in-
creased with increasing human populations, and
there is as yet no sign that they will not con-
tinue to do so. No single species so far as we
know has ever become extinct, and no regional
fishery in the world has ever been exhausted.¹2
In formulating governmental policy,
biologists appear to have had a hard
struggle (not always successful) to avoid
oversimplification of the problem. One of
the crudest arguments to have had some
support is known as the "propagation
theory," associated with the name of the
English biologist, E. W. L. Holt. 13 Holt
advanced the proposition that legal size
limits should be established at a level
that would permit every individual of
the species in question to spawn at least
This suggestion was effectively de-
molished by the age-distribution studies
whose results have been noted above.
Moreover, some fisheries, such as the
"sardine" fishery of the Canadian At-
lantic Coast, are specifically for imma-
ture fish. The history of this particular
fishery shows no evidence whatever that
once.
11 See H. Scott Gordon, "The Trawler Question
in the United Kingdom and Canada," Dalhousie
Review, summer, 1951.
127
the landings have been in any degree re-
duced by the practice of taking very
large quantities of fish of prespawning
age year after year.
12 Taylor, op. cit., p. 314 (Dr. Taylor's italics).
13 See E. W. L. Holt, "An Examination of the
Grimsby Trawl Fishery," Journal of the Marine
Biological Association (Plymouth), 1895.
The state of uncertainty in biological
quarters around the turn of the century
is perhaps indicated by the fact that
Holt's propagation theory was advanced
concurrently with its diametric opposite:
"the thinning theory" of the Danish
biologist, C. G. J. Petersen.¹4 The latter
argued that the fish may be too plentiful
for the available food and that thinning
out the young by fishing would enable
the remainder to grow more rapidly.
Petersen supported his theory with the
results of transplanting experiments
which showed that the fish transplanted
to a new habitat frequently grew much
more rapidly than before. But this is
equivalent to arguing that the reason
why rabbits multiplied so rapidly when
introduced to Australia is because there
were no rabbits already there with which
they had to compete for food. Such an
explanation would neglect all the other
elements of importance in a natural ecol-
ogy. In point of fact, in so far as food
alone is concerned, thinning a cod popu-
lation, say by half, would not double the
food supply of the remaining individuals;
for there are other species, perhaps not
commercially valuable, that use the same
food as the cod.
Dr. Burkenroad's comment, quoted
earlier, that the purpose of practical
policy is the benefit of man, not fish, was
not gratuitous, for the argument has at
times been advanced that commercial
fishing should crop the resource in such a
way as to leave the stocks of fish in the
sea completely unchanged. Baranoff was
largely responsible for destroying this
14 See C. G. J. Petersen, "What Is verfish-
ing?" Journal of the Marine Biological Association
(Plymouth), 1900-1903.