In open-access settings, high quality resources are lucrative; yet keeping out potential entrants may be extremely costly. This combination—valuable resources in the presence of high exclusion costs—has played a pivotal role in creating the “race to fish” and a consequent destruction of many of the world’s fisheries. Yet private interests have protected some fisheries and other open-access resources that are not shielded by formal, government-enforced property rights. There is thus growing interest in the conditions under which private, or informal, protection of such resources is possible. Recent research by Daniel Kaffine (2009) has uncovered an unlikely venue for understanding such private solutions—surfing in California.
Areas along the coast known as “surf breaks” are locations where waves are particularly conducive to high quality surfing. California law defines the coast as open access up to the high-tide mark. This makes surf breaks a classic, open-access resource, subject to overexploitation due to excessive entry by individuals seeking to enjoy the resource. Yet Kaffine finds that long-time regular surfers, known as “locals” (or surf gangs), routinely enforce informal property rights to the surf breaks, a practice known as localism. Their creation and enforcement of informal property rights dramatically reduces congestion from “nonlocals,” thereby preserving the quality of the surf breaks.
The finite number of waves per hour at potential surfing locations implies that surf breaks are congestible resources whose value can be degraded by too many people trying to surf, but both localism and etiquette have emerged to deal with congestion. Etiquette helps users decide who gets to ride which wave at a site, thus reducing collisions and enhancing the experience for all users. Localism, enforced by unpleasant verbal assaults, and sometimes physical hostility, serves as a method for rationing who gets to surf where.
The starting point for localism is long-term investment in surfing at a particular location. Such investment creates benefits. Many locations, for example, have hidden hazards such as underwater rocks or dangerous currents, and local knowledge can reduce the harms caused by them. In addition, knowledge of how to read the water at a particular location can lead to better surfing. The value of such investments can be sharply reduced or wiped out by congestion; hence locals are willing to devote resources to prevent excessive entry by nonlocals.
Overall, Kaffine finds that at higher quality surf breaks, locals engage in more attempts to restrict entry by nonlocals, resulting in more secure property rights at such locations. The possibility that the private creation of property rights would be more likely to emerge for more valuable resources was first suggested by Harold Demsetz (1967). But Kaffine’s work goes further, for he shows that while Demsetz’s proposition is confirmed in the case of surf breaks, it is not the only possible outcome. In particular, Kaffine demonstrates that a rise in the value of a resource can actually lead to so much entry by nonlocals seeking to capture its value that local efforts to protect it are overwhelmed. The result is excessive congestion and a diminution, even destruction, of the value of the resource. For example, although locals are generally successful in defining and enforcing informal property rights at higher quality surf breaks, there are exceptions—such as when a break is close to a major metropolitan area—where locals are unable to prevent congestive entry by nonlocals.
Kaffine’s work offers us several insights. First, even when there are no formal property rights, it is possible for users of a resource to implement and enforce informal rights that protect the resource from overuse. Second, while local users generally will undertake greater efforts to define and enforce rights to more valuable resources, there is no guarantee that their efforts will be successful. If nonlocals value the resource enough or have sufficiently low costs of entry, they can readily overcome attempts to prevent congestive (and destructive) entry. It is easy to imagine that such factors played a role in the near-extinction of the High Plains bison, for example, and have played a role more recently in the degradation of many ocean fisheries.
This brings us to the final point. In the case of California surf breaks, because state law declares the coastline to be an open-access resource, private, informal action by surfers is necessary to protect surfing resources from excessive entry and congestion. Despite the overall success of these private actions, this is a high cost endeavor—one that has not always been successful. Indeed, the real lesson of the California surf gangs is remarkably similar to the lessons we are learning about ocean fisheries and other potential open access resources: Sometimes common-pool resources are destroyed not because of private action, but despite it. It is a lesson that will become increasingly important in the years ahead.
Demsetz, Harold. 1967. Toward a Theory of Property Rights. American Economic Review 57 (3): 347–57.
Kaffine, Daniel T. 2009. Quality and the Commons: The Surf Gangs of California. Journal of Law and Economics 52 (4): 727–43.