By Thomas Calabro | United States
Perhaps the Scallop War is not the worst “war” we’ve seen, especially compared to our history of violent conflicts in the past decades. It is still, however, an intriguing conflict based on poor economic policies. The failed negotiations may increase tensions between the UK and France. But after looking at this so-called “war” between the two European allies, I saw the opportunity to discuss the best approach that promotes liberty and eases tensions, while protecting the stock of scallops.
What is the Scallop War?
The Scallop War is the hostile dispute over the fishing rights of scallops in the English Channel, specifically the Baie de Seine area off of Normandy. Both countries border the English Channel, but the UK has a longer scallop season than the French do. The fear of depletion from the British has pushed French boats to ward off their British counterparts by throwing “smoke bombs and rocks” at them.
This situation is not new. It has occurred before both historically as well as academically. The issue at hand is another example of the Tragedy of the Commons. Basically, this arises when parties consume common resources, those that are non-excludable and rival, at an unsustainable rate.
The increase in scarcity means that both parties cannot have all they desire. These common resources are goods that are not privately owned, and therefore non-excludable, but are also rival, in that consuming one unit of a good means everyone else has one unit less to use. In this case, the nations catch scallops in international water for economic gain. So, both parties have an incentive to catch as many as possible while they last.
Alex Tabarrok, a professor of economics at George Mason University, explains the Tragedy of the Commons while also outlining three main approaches to combat the issue. The approaches include Commanding and Controlling the actions of the perpetrators, using Cultural Norms to assure better practices of gathering resources, as well as simply Creating Property Rights on these Common Resources to incentivize good behavior.
Command and Control
France understood the issue at hand but went about it in the wrong way. They are legislating their own fleets from dredging those waters in the summer months. They intend to restrict fishing for scallops from May 15th to September 30th. But, this only puts France at a disadvantage, as British fishermen in vessels can still dredge for scallops. The attempt to control the collection of common resources only incentivizes people to find other ways to continue the harmful practice.
The second approach relies on slowly ushering in the cultural norm of exercising the preferred practice. The agreement that the two countries approved put this practice to the test. Basically, British fishermen were supposed to willingly give up their advantage in the scallop market and hold their fleets to the same policies as the French.
However, the deal fell apart a few days later when British fleets desired compensation for damages. This deal, though, was destined for failure from the start, as it relied heavily on the good faith of Britain to respect and follow France’s closure period. Even though the UK and France are close allies, it is tough to expect such cooperation without efficient incentives.
The third approach, on the other hand, is the most powerful policy. Creating property rights on the scallops themselves incentivizes the practice of restraint. Prof. Tabarrok mentions that New Zealand is an excellent example, having implemented property rights on fish with the use of Individual Transferable Quotas (ITQ). Citizens can purchase the right to a certain amount of a common resource, such as scallops, that will sustain the population without hindering profits. Fishermen, therefore, have an incentive to increase profits by reducing the cost of collecting resources, rather than increasing the supply of that good.
By giving citizens private ownership over the scallops, therefore making it excludable, the State essentially changes the way people use the goods in question. It replaces the short-term concept of collecting as much as possible now with the idea of collecting a small amount now and leaving more to catch later in the long run.
This economic lesson does not resolve the issue of reparations, although one could argue that British fishermen deserve reimbursements for damages to their own private property. That may be the only issue between the two countries if they seek this path of establishing property rights on scallops. Perhaps if States understand the effectiveness of incentives over controls, we could develop more policies that promote the ideas of property rights, free markets, and free people.
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