Fishy Economics? Not at All: How Shark Finning Suffers from the Tragedy of the Commons

Sharks, which are largely fished for their shark fins, as shown in the picture above, are overfished because of an economic problem known as the tragedy of the commons. (Brake 2011)

If a researcher asked an environmentalist why so many sharks are fished, he or she would probably respond, “For their shark fins, of course.” If the researcher asked an economist the same question, he or she would probably get a completely different answer. This answer, of course, would use economics to analyze the ecological problem.

Such a high, unsustainable number of sharks are fished because of an economic problem known as the tragedy of the commons. In economics, goods can be broadly classified in four categories: public goods, private goods, common resources, and natural monopolies. Sharks are a common resource, which means that sharks are goods that are non-excludable and rival. What does that mean? Shark fishing is non-excludable in that people cannot be stopped from fishing as many sharks as they want. For instance, a person could, in theory, obtain a boat and go out to fish as many sharks as they wanted. Shark fishing can be characterized as rival because there are only a finite number of sharks that exist, and a shark that one fishing boat catches is one less fish available for the other fishing boats to catch. This leads to an economic problem known as the tragedy of the commons, where overfishing occurs because fishing boats have a unilateral incentive to fish more than is sustainable and good for society.

As David Boaz of the CATO Institute, an independent, nonpartisan think tank, explains, “When people don’t own things, they have no incentive to maintain the long-term value. That’s why passenger pigeons went extinct, but chickens did not; why the buffalo was nearly exterminated but not the cow” (Boaz 2007). Unlike cows and chickens, buffalo and passenger pigeons were not owned by individuals, so people had no incentive to maintain their long-term value. Rather, they were exploited for their short-term economic value and subsequently went extinct. 

Does this sound familiar? Today, sharks are being exploited for their short-term economic value and could be extinct in the future. The tragedy of the commons has proven to be true with regard to sharks, as illustrated by the rampant overfishing of sharks that has occurred and continues to occur.

 

This graphic from the Pew Charitable Trusts, an independent, non-partisan research and public policy organization, shows the various regions and countries that export shark fins to Hong Kong, the global center of shark fin commerce. According to the corresponding report, “83 countries or territories supplied more than 10.3 million kilograms (22.7 million pounds) of shark fin products to Hong Kong in 2011,” an assertion based on statistics from Hong Kong’s Census and Statistics Department. (Benn & Brittin 2012)

Works Cited

Benn, J. & Brittin, R. (2012). “Sharks on a Collision Course.” The Pew Charitable Trusts: Environmental Initiatives. The Pew Charitable Trusts. (Date Accessed: February 17, 2013) http://www.pewenvironment.org/news-room/other-resources/sharks-on-a-collision-course-85899403508

Boaz, D. (2007). “Sharks and the Tragedy of the Commons.” CATO at Liberty. CATO Institute. (Date Accessed: February 16, 2013) http://www.cato.org/blog/sharks-tragedy-commons

Brake, L. (2011). “Malaysian state plans to make shark finning illegal.” Earth Times. Earth Times. (Date Accessed: February 20, 2013) http://www.earthtimes.org/conservation/malaysian-state-plans-shark-finning-illegal/821/