History proves that any central government, operating from the top down, does not solve the problem of the free rider. But it offers only solutions that are worse than the problem it wants to solve. The government offers measures of social engineering and social planning that are destined to fail miserably.
The proposed Catch Shares program, as presently designed, will fail miserably.
The first reason the central government has traditionally failed in its experiments at social engineering and most certainly will fail in the future is that it does not accept the doctrine of subsidiarity: Problems have to be solved WHERE they arise. A higher level of social organization has to have patience and faith that the problem will be solved where it arises.
There are other fundamental reasons why the currently proposed solutions of the free rider problem in the fisheries, if implemented, will cause only havoc. These solutions have been designed from the top down. And they will be imposed from outside of the community of fishermen.
To solve the problem of overfishing, the National Oceanic and Atmospheric Administration (NOAA), an arm of the federal government, is enclosing the last commons, the oceans that belong not to the government but to the community as a whole, and enclosing them by instituting a system of Catch Shares, small monopolies, that are beyond the financial means of small independent fishermen and thus basically exclude them from fishing. Catch Shares will admittedly concentrate the ownership of those shares into a few hands – even absentee, ‘’Wall Street,’’ hands.
Thus the wealth created by the fishermen will no longer be distributed among the members of the local community, but will be shipped to other communities. Profits will definitely go wherever the owners of the shares reside. And, when absentee owners extract a larger share of the profits than customary, the local community will automatically have that much less. But even in the best of all worlds, the fewer fishermen left will definitely catch less fish (otherwise the proposed system of Catch Shares will have no justification at all). Hence, the local community will be impoverished by that amount.
A complementary reason why we have wasted 300 years of thought and action trying to solve the problem of the free rider is that we have lost track of a most fundamental truth. Contrary to the common wisdom of believers in the problem of the free rider, the community is not defenseless against the free rider.
The community has a set of measured defenses that spring into action as soon as the problem of the free rider is definitely identified.
Much time might elapse before the community identifies the problem. But that time is well spent, because the target is unmistakably identified. No energy is wasted thereafter. No shot is scattered.
The defenses of the community, typically, are shame, isolation, and ostracism.
What seems to be even less well understood by social scientists today is that the community, rather than being defenseless, evolves rules for the PREVENTION of the problem of the free rider.
Those are community rules that are developed from the bottom up. We will take a look at these rules on the next occasion.
Carmine Gorga, PhD, is president of Polis-tics Inc. His latest book is titled The Economic Process: An Instantaneous Non-Newtonian Picture.