“Free Enterprise” and the Failure of American ITQ Management

Abstract

Open access to fishing has always been politically useful to policy makers as a strategy of imperialism. The Faustian bargain between the US government and its fishermen has been that in return for free access, fishermen would put up with government-imposed inefficiencies to blunt the impact of excessive fishing pressure on fish stocks. These inefficiencies increase the cost of fishing. Too many boats make it impossible for fishermen to operate economically, or for management to move beyond allocation battles. In the bio-economic models developed during the 1960s, fisheries did not pay economic rent, nor did they cover their administrative costs. Fishers freely entered the fisheries, accepting the risks of competition and the challenge of controlling operating costs; efforts to cap entry into most American fisheries were delayed until the early 1990s. This legacy has created a system with artificially high administrative costs that will not be recovered under individual transferable quota (ITQ) schemes. Lack of fish has led to successive rounds of subsidies, which offer short-term fixes but do not address the overcapacity problems or the tension among the competing goals within fisheries management. These issues will be examined in the context of the West Coast halibut fishery, which has moved to an ITQ system at the same time as the stocks are declining. This chapter argues that the imposition of ITQs will be ineffectual in overcoming the legacy of decades of free enterprise, over-capitalization, and the historical reluctance of American government to make fisheries pay the costs of their administration.