While much of the seafood industry in Louisiana has recovered, NPR reports that the oyster business is still plagued by the BP oil spill. However, the threat is not exactly from the oil itself, but rather, from the response to the oil:
"The oil came in and the oil left, disappeared [or] whatever," [oysterman Mitch Jurisich] says. "And the mortality to the oysters [was] very minimal in most areas."
But the stress didn't stop when the oil moved away. That's because the state of Louisiana built berms to keep the oil from reaching fragile wetlands. And two of the berms cut right through Jurisich's oyster beds.
He estimates that about 20 percent of his oysters have been buried or smothered by drifting sediment.
"We fought the oil. We won the battle in a way," Jurisich says. "And now we're fighting man's decision to stop the oil. They have destroyed more oyster crops than I think the oil would have ever."
Jurisich is concerned he won't be compensated for his losses due to the sand berms, which some say have questionable effectiveness and environmental impact.
Paul Schwennesen recently appeared on Fox Business to discuss food safety. Paul offers more comments on the issue below.
We all want safe food. Question is, how do we get it? “There oughta be a law,” seems to be the generally conceived approach, as evidenced by recent passage of the now-famous food safety bill. A tidy and altogether comforting solution: simply slay the beast of dangerous food with the bludgeon of enlightened bureaucracy. But for the food advocates who support this kind of top-down solution, beware. The kind of government meddling that created cheap-at-any-cost is now about to do the same for “safe” food.
But isn’t food safety a pressing concern, a public health problem we can’t afford to fool around with? The problem is, the problem isn’t. Emotional rants that “thousands die every year!” do not help us grapple with the scope or magnitude of this alleged threat. Let’s try some perspective: according to the Centers for Disease Control, the estimated number of deaths caused by food borne illness numbers around five thousand a year. Sounds pretty bad, eh? Time to call in the Salmonella SWAT team? Before you do, consider that the same number of people die by intentionally strangling themselves each year. Or that the same number of people die from Alzheimer’s in California alone each year. Or that four times that number die each year accidentally falling off of things. Moreover, 70% of food borne illnesses result from poor food handling procedures during preparation. Unless you’re also on a crusade to flatten everything or cure Alzheimer’s, I’d think twice about ceding greater authority of our food system to centralized management.
True to form, Congress has blithely offered its professional problem-solving services to rid us of the menace of deadly food. And, true to form, it’s about to embark on another unarmed expedition into the tortuous territory of unintended consequences.
More regulations always have the effect of reducing the number of operators in that sector. It can be dramatic (as in the case of the payday loan industry), or it can be insidious (as in the case of the livestock industry). The food industry is no exception; it’s impossible to envision a wave of enthusiastic newcomers clamoring at the gates to enter the food business now that the FDA has been granted the most sweeping extension of powers in seventy years. Granted, some of the bad actors need to be pushed out of the industry (as in the Peanut Corp. of America, which apparently intentionally distributed salmonella-laced product). Call me a Pollyanna, but I don’t think the bad actors generally represent the food industry. The people who do represent a large part of the industry are the small, local, independent operators who have been squeaking by for decades. This kind of regulatory barrage is exactly the sort of thing to make them call it quits. BSE (mad cow) regulations pushed our predecessor to hang up his hat. The increasing silliness over E-coli testing pushed his predecessor over the brink years ago. Warranted or not, an increasingly difficult regulatory environment will always winnow out the small players, leaving the field more sparse than before.
Of course the demand for food hasn’t gone down, so how does the system accommodate a hungry public? Well, that’s where Cargill, Tyson, Monsanto and the rest of the Big Food set come in. They’re not evil (despite bumper-sticker claims to the contrary) they’re just picking up the slack left when the small guys get pushed out by Big Government. I know, I know, it’s easier to blame their success on high-priced lobbying and a cozy relationship with regulators. But consider this: government regulators can only be manipulated by the lobbying and cozying when their hands are firmly on the wheel of that particular industry.
The unintended consequence in this legislative bid to create safer food is to push more and more production into fewer and fewer hands. As we all know, the more top-heavy a thing gets, the more prone it is to toppling (pick your metaphor: pyramids, the Eiffel tower, icebergs, Michael Dukakis...). As Tom Philpott writes, “the real systematic risk of the food system [is] the exponential expansion of hazard that comes from concentrating huge amounts of production in relatively small spaces.”
So, is there any solution? If we agree that even one death from food borne illness is too many (and it is), then how can we aim to squeeze out that lingering menace without artificially exacerbating the very problem we are trying to solve? How can we do to Lysteria what we did to malaria?
I may be waxing heretical, but might I suggest de-regulation? Contrary to myth, markets are in fact very good at giving us what we want, even if those things are intangibles like clean air or safe food.
Let me give you an example: As a producer of livestock and owner of a small (very small, according to the USDA) packing house, I know about the raft of bureaucratic “protections” between you and the beef I produce. There is little or no incentive for me to create a remarkably safer production system because my processes are effectively in the hands of our state inspector. The incentive among producers is to win the race toward the bottom, where you can most cheaply and easily meet the minimum standard. Imagine for a moment what the food world would look like if we made food safety a competitive advantage. What if I could demonstrate (through third-party quality assurance, a sophisticated testing regime, or something completely unthought-of of) that my beef was quantitatively safer than my competition? I suspect that the maligned self-interest of “money-grubbing capitalists” would be instantly harnessed toward the greater public good. I, for one, would probably behave considerably differently if I were continually striving for the next-higher grade on a “Good Housekeeping Seal of Approval” instead of aiming simply for the “Inspected -- Passed” stamp.
We didn’t regulate malaria out of existence; we simply ensured that millions of empowered individual actors had the information to combat it (that, and some choice applications of DDT). Allowing food processors to compete for customers by marketing their very best possible food handling practices would have a similar effect.
Regulations are good for imposing minimums, but not at creating excellence. Since our food safety “problem” is clearly in the vanishing margins, excellence is what is needed. This can only really be attained when incentives are structured to push our producers (and consumers) to go the extra step to make food as safe as it can possibly be.
Many food advocates rightly criticize government meddling in the food sector in the late 1940s for attempting to create cheap food at tremendous ecological and sociological expense. Let us not condone the same mistake under the aegis of “safe food.”
Paul Schwennesen is a southern Arizona rancher and a PERC Enviropreneur alum. He can be reached at AgrarianLiberty.com. For more from the Schwennesens on this topic, see here, here, and here.
That's the central question Holly Fretwell and Shawn Regan pose at Forbes.com, and it's an important one. Congress is currently proposing to permanently extend the Land and Water Conservation Fund, which would set aside nearly a billion dollars each year to acquire more public land. But, as Holly and Shawn suggest, there is reason to believe it won't amount to much conservation:
Federal land management has largely resulted in poor stewardship of America's most treasured natural areas. Maintenance, in particular, has been dismal. The Forest Service estimates a backlog of $5 billion in deferred maintenance projects and the National Park Service has a backlog of more than $10 billion. The outcome is overflowing sewer systems, failing roads and ruined cultural resources.
But that hasn't stopped these agencies from acquiring even more land. Since 1960 the government has taken over more than 50 million acres--an area the size of Utah.
To an increasingly conservation-minded public, putting more land in government ownership might seem sensible. But, in reality, more federal land does not necessarily mean more conservation. The LWCF only provides funds for land acquisition, not for the care and maintenance of existing lands. And given the current management needs of the 650 million acres already owned by the government, spending millions acquiring new land is irresponsible.
Advances in efficiency might presage greater energy consumption?!
Yep. Here's how it works:
Common sense tells us that increasing energy efficiency reduces energy use. But this is not so. William Stanley Jevons first identified this paradox in his 1865 book, The Coal Question. Jevons observed that England’s consumption of coal soared after James Watt introduced his coal-fired steam engine, which represented a vast improvement on Thomas Newcomen’s inefficient design.
Jevons pointed out that efficiency gains reduce the cost of energy, allowing the steam engine to penetrate other industries, i.e., textiles. This lead to an increase in the total energy consumed. Jevons wrote, "It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth."
The increase in the use of household appliances bears this out. As appliances become ever more energy efficient, we use more of them. Survey data for 1980 and 2001 shows increases in microwave ovens from 14 percent to 86 percent, dishwashers from 37 percent to 53 percent, and central air conditioning from 27 percent to 55 percent.
Even though energy efficiency has improved in almost every aspect of our society, overall energy consumption continues to grow. Improvements in energy efficiency are good for the economy and for people’s lives, but it doesn’t mean we’ll use less energy overall. We’ll use more, especially in the developing world. In their 2005 book, The Bottomless Well, Peter Huber and Mark Mills wrote, "Efficiency fails to curb demand because it lets more people do more, and do it faster—and more/more/faster invariably swamps all the efficiency gains."
For over two decades, Defenders of Wildlife has paid outmore than $1.4 million to livestock owners that have had livestock killed by wolves. With wolf numbers on the rise, Defendersrecently announcedthey were ending their compensation program, but it appears--at least for the Mexican gray wolf in Arizona and New Mexico--another nonprofit organizationwill take over the payment program.
Defenders of Wildlife on Friday wrapped up its long-standing program of compensating ranchers for livestock killed by endangered Mexican gray wolves, as the payment program is shifted to another nonprofit organization.
Since the U.S. Fish and Wildlife Service started reintroducing gray wolves to a recovery area in southeast Arizona and southwest New Mexico in 1998, Defenders has paid ranchers in the two states $127,545 for the loss of livestock.
Now Fish and Wildlife is in the process of setting up a board of stakeholders, including both ranchers and conservationists, that will decide how to disburse funds managed by the Washington, D.C.-based National Fish and Wildlife Foundation. The program has been dubbed the Mexican Wolf Interdiction Trust Fund.
Defenders will make a one-time contribution to seed the fund with enough to cover wolf compensation for several more years.
Ocean overfishing provides a classic illustration of the tragedy of commons. Because no one owns the fish in the sea, there are no incentives for fishermen to constrain their catch. Leaving fish for the future means they are available to others to catch. Government managers have tried to regulate the problem away, but the result has been a wasteful race for fish. A better approach emerged in the 1990s with the introduction of individual transferable quotas (also called catch shares). By receiving predetermined shares of the total allowable catch each season, fishermen are no longer compelled to race for the fish. The economics of a fishery improves dramatically and the fishery becomes more sustainable.
Unfortunately, because catch shares eliminate the problem of too many boats chasing too few fish, some congressional lawmakers with short time horizons are mounting a campaign against them in the name of jobs. To wit, when considering catch shares in a fishery the "Saving Fishing Jobs Act of 2011" defines fishermen as all permit holders, whether they have a record of catch or not, and requires 2/3 of them to approve a new catch share program. Non-fishing permit holders are likely to oppose a catch share program because their initial allocation is little, if any, share of the fish.
Ironically, such a ploy only serves to lock a fishery into a lower paying seasonal jobs instead off higher paying year-round jobs. Is it better to have 10 seasonal paying jobs earning poverty level wages of $7,000 a year under a race for fish or five year round fishing jobs earning $50,000 without the race? These tradeoffs should be weighed when lawmakers tout that they are saving jobs.
The political campaign at the national level now being mounted against catch shares illustrates another important lesson: When it comes to relying on higher levels of government to define property rights the costs of establishing those rights should be considered. Granted, given its monopoly on legitimized coercion, government can overcome the problem of enforcement, but there are information and rent-seeking costs to consider. These costs are likely to be much higher at the national level than relying on lower levels of governance or private collective action (see Fred McChesney's work on "Government as Definer of Property Rights").
In short, the change that catch shares create in the nature of fishing jobs--from a larger, part-time, more seasonal workforce to a smaller, full-time, higher paid work force--is both economically and ecologically superior in the long run.
With the battle over the debt heating up in Congress, the EPA has once again become the target of budget cutters in Washington. A plan by House Republicans to reduce funding for the agency has been called an "environmental disaster" and a "declaration of war" on environmental protections. But the question no one is asking is what effect the EPA's budget has on measured environmental quality. Do increased EPA budgets result in direct improvements in environment quality, or does it simply increase the size and scope of the agency? Could budget cutting reduce bureaucracy without reducing environmental quality?
Consider the figure above, which shows that since 1980, the EPA’s budget (adjusted for inflation) has remained relatively flat, yet air quality continually improved. Ambient concentrations of nitrogen dioxide have declined by 51%, sulfur dioxide by 76%, carbon monoxide by 80%, and lead by 93% (data here). Moreover, as Joel Schwartz described in PERC Reports, fine particulate levels have declined by 42% and peak ozone levels have fallen 30% as well. Such data suggest that increasing the EPA's budget, as the Obama administration has proposed, will only increase bureaucracy, not air quality.
Since the EPA sets national air quality standards, the agency decides when its own job is finished. Despite such improvements, the EPA has never declared the air safe and continues to push for more funding, more workers, and more regulations. If lawmakers are looking for an agency in which to cut spending without causing harm to the environment, the EPA is a great place to start.
Over the past few decades, a dichotomy has emerged in American agriculture. On one hand, large agribusinesses and their highly efficient processing and distribution systems bring affordable food to every corner of the country. On the other, small-scale farmers provide healthy, local food to an increasing number of consumers who value it. Our ranch in northeast Oregon lies somewhere in the middle.
The Carman family ranch is the same type of midsized farm that the USDA recently called "the disappearing middle." The high transaction costs of selling directly to consumers make it difficult for producers like us to sell everything we produce to niche markets. At the same time, we can't begin to compete with the efficiencies enjoyed by large corporate farms. Add to the mix a dependence on an increasingly volatile commodity market, and it's no surprise that 150,000 midsized farmers have recently hung up their hats.
Despite these odds, my husband and I are beating the statistics. For nearly 10 years, we’ve been selling high-quality, grass-fed beef (free of hormones and antibiotics) to a growing number of Oregon families, restaurants, and businesses. In the process, we’ve found a way to combine profitability with sustainability. The key to our recent success has come from looking beyond the typical business plan of a small-scale farmer.
For several years, theCarman Ranchdivided its sales channels between conventional commodity sales and direct marketing of grass-fed beef to individual consumers. Following the lead of small farmers, we made personal connections with our customers. Their support allowed us to develop production practices that not only made a positive impact on the landscape but also yielded exceptional beef. But in order to continue these practices, we needed a premium price for our product. We couldn’t accomplish this by selling a few steaks at a time, so we looked beyond home kitchens and found customers who cooked in much larger venues.
Some economic histories are valuable because they provide insights into events and places previously not fully explored, while others contribute through a well-formulated test of economic propositions. In Commerce by a Frozen Sea, Ann M. Carlos and Frank D. Lewis have given us a marvelous melding of the two. The authors have written a carefully researched and well-organized discussion of the early fur trade in the very northern reaches of North America as well as a fascinating use of basic economic theory. The book extends our understanding of the overall extent of the trade and the interaction between the European traders -- primarily the French and British -- and indigenous tribes. Europe wanted furs, primarily beaver, and the resident tribal groups valued the commodities available from the more economically-developed countries.
When Adam Smith published his Wealth of Nations in 1776, he devoted a bit more than a page to the Hudson Bay Company, which was over a hundred years old at that point, having been created by royal charter in 1670. Smith places his discussion of the Company in his section discussing the costs and benefits of joint stock companies, and thinks the Hudson Bay Company probably had a reasonable level of profits, despite some of the principal-agent problems inherent in such organization.
Smith could have made the Company and its relations with the Native Americans in the region around Hudson Bay a prime example of one of his basic assumptions about human nature, “the propensity to truck, barter, and exchange one thing for another.” He also argued that the division of labor is limited by the extent of the market and he would have found in the activities of the Hudson Bay company a surprisingly robust case study of entrepreneurial efforts to further extend the market and hence the division of labor.
Commerce by a Frozen Sea is, at its core, an account of the gains from trade when two very different cultures with very different resources and productive abilities come into contact. And that contact itself was not exogenous, but driven by farsighted individuals who were able to organize trade across thousands of miles in the most difficult of circumstances. The Hudson Bay was frozen for most of the year, so the outposts or “factories” along the edges of the Bay depended upon the yearly vessel that would bring rations for the Europeans stationed at the factory as well as trade goods. These goods were often ordered specifically by the Indians the year before. The ship would then load the furs that had accumulated at the trading post for the return trip to Europe.
Carlos and Lewis provide useful insights into several issues surrounding eighteenth-century fur trading. First, the Indians were careful traders and industrious harvesters of furs and were very sensitive to price fluctuations, both of the goods they were selling and the commodities (needles, guns, axes, textiles) that they wanted to receive. There is no evidence that the natives were an indolent lot, trading to a point of satiation, and then ignoring more opportunities for exchange. Instead the trade was between two relatively equal groups and the Indians were careful shoppers who knew what they wanted and what the relative prices were at French as compared to British trading posts.
Second, alcohol played little role in the trading patterns. Some natives traded for alcohol, but their overall consumption was quite modest and the Hudson Bay Company did not try to use alcohol as a lubricant for trade. In fact, The Company acted as a firm that cared a great deal about long-term relations and thought that the use of alcohol during trading created suspicion and made future trades less likely.
Third, there was little violence in the trading relations. The Hudson Bay outposts were far apart and had only 20 to 30 men at them. Hence, if the Native Americans would have wanted to overwhelm a post and plunder the store of tradable commodities they easily could have done so. They, like the European traders, however, saw the gains from a long-term relationship and did not want to jeopardize the possibility of future trades.
Fourth, the English clearly understood gains from specialization, and believed that the Native Americans could harvest beaver and other furs much more cheaply than European trappers. Hence, the trading posts were just that, a place where two cultures could interact to provide substantial gains for both groups.
Finally, there was a general understanding of the problem of over-exploitation of an open access resource, and where the British has a monopoly on trade they were careful to discourage over-trapping. In regions where there was an interface with French traders, and when a single tribe did not have complete control of an area, over-exploitation did occur. Also, some of the cultural norms of the tribes that allowed harvesting for survival meant that it was difficult to establish and enforce well-defined property rights to fur-bearing animals, particularly beaver.
Carlos and Lewis also provide interesting insights into long-term growth issues. They call the eighteenth century “the golden age” for the tribes in northern regions. Their per capita income compared favorably to working class British. That was because they controlled a valuable resource, primarily beaver pelts that were valued in Europe for hats. Once that resource was exploited and most of the gains from trade had been realized, there was little basis for ongoing economic growth, hence over the long-run the tribal communities did not experience the increases in per capita income that occurred in Western Europe and the parts of North American with permanent European settlers.
This is a delightful book to read. It is fascinating in terms of its insights into the trading culture of a particular place and time and it also provides useful correctives to many misconceptions about various aspects of that trading.
Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.
The goal of PERC’s programs is to fully realize the vision of establishing “PERC University,” where scholars, students, policy makers, and others convene to expand the applications of free market environmentalism.
PERC's fellowships share a common goal of exposing new scholars, students, journalists, and policy makers to free market environmentalism, as well as enable scholars already familiar with FME to explore new applications.