This article addresses the fact Tuna fishing over the last couple of years has reached a point where it is being massively over produced. This is a prime example of a market failure. A market failure is just when a certain product is either over produced or under produced, which in this case it’s over produced. This situation with the tuna is referred to as tragedy of the commons. Tragedy of the commons is when private firms try and exploit common goods, which leads to an overproduction of the good. A common good is a good that is rival, which means that once one person uses it, it diminishes the value for others. Because fish is a common good that anybody can fish for, there is no regulation of the amount they are fished. This is the major problem, because without any limitations or regulations, what is to stop firms from trying to keep producing. Because companies are “profit maximizing machines,” they won’t stop unless they are made to stop. Not only is there that problem, but because the fishing is most likely happening in free waters, it becomes an international affair.
The graph above shows the current problem. This is what is currently happening, where the firms are paying less and society has to pay more for the loss of fish. This market failure is why this problem must be fixed. The major problem is the fact that it is near impossible to enforce regulations, because most fishing occurs in international water. So for example, if a boat from China is fishing in international waters off the coast of Japan, and the boat breaks Japan’s fishing limits, Japan can’t do anything about it, because it was international waters. Unless there is an international agreement, no limits can be set and enforced. That is why there is so much overfishing, without any solutions, boats and their companies will just keep trying to maximize profits by maximizing their catch. The article states that there is “an enormous amount of illegal fishing.” Because it’s in international waters though, there is nothing anybody can do. The United States blames European fishing companies for the decrease of the fish population. Europe has a great amount of ships in the waters, with France sailing the most, with 771 ships. Not only is the amount of ships in the water an important factor, but the place where the ships are fishing is effecting this fishing decline. Most companies are starting to fish near hatcheries, where the fish are born. This is because during birth season, there are more fish to be found there. Fishing here messes up the natural cycle of fish, and decreases the population drastically by not allowing fish to get old enough to reproduce.
One solution that governments try to take is setting a quota. A quota works by just reducing the amount of a good that a country may import. This will limit the amount of fish that a boat can catch, so it makes sense that the fish population would return to normal. So if there is a quota in place, why is over fishing a problem? The reason the fish population continues to decrease is because the quota is usually set too high in countries. Governments also want to maximize profits, so they set their quota high, therefore they can strengthen their economy. So right now the quota is pretty much useless if it won’t ever be reached. In my opinion, the best solution is to lower the quota. This way it would actually limit the fish intake. If countries won’t import anymore fish, then the boats won’t catch as many, because without buyers, the fish would be useless to the companies.
In this graph you can see, if the quota was set lower then it would force the Marginal Private Cost back, and thus reduce the negative externality. If they did set a new quota, a quota that is actually under the amount of fish produced, then it will limit the amount of fish that can be produced. This would help bring the natural cycle back to balance and the fish population would start to increase toward the normal amount again.
So in conclusion, I would say that to fix this problem, there needs to be an international agreement on a new quota that will actually limit the fish intake.
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