untitled

alternative ways of earning income. So the costs and benefits of resource use are

measured relative to other forms of economic investment.

Note that the level of effort that maximizes profits (Fig. 19.14) is below the level

of effort that maximizes sustainable harvest (Clark 1976, 1990). This offers yet another

argument against maximizing the sustainable yield: it is less profitable than a lower

rate of harvesting. That is probably a good thing for conservation: it implies that a

monopolistic resource user ought to choose a relatively safe exploitation effort in order

to serve its own selfish needs. For this to occur, however, the resource user needs

control over decisions regarding resource use. In other words, they need to own the

property rights to the resource. There would be little point in sustaining the resource

unless these property rights continue long into the future.

A problem arises when access to the resource industry is unregulated, a situation

known as open access. This is common in many game-cropping and small-scale fisheries

operations around the globe. Incoming resource users may not necessarily care

about depressing the profit margin, so long as they still find resource exploitation

more profitable than other ways of economic investment. The threshold at which

exploitation becomes unattractive in this case would be around 50–60 units of effort,

rather than the optimal 25 or so units of effort. We will term this the economic equi-

librium. Higher effort implies a lower resource abundance than that which optimizes

profit. Thus, open access (at least in game cropping and fisheries) can logically lead

to depressed harvest levels, depressed profits, and depressed resource abundance (Clark

1976, 1990). Everybody loses.

So far, however, we have not discussed how prices figure into the precarious

balance. Before we jump into the special circumstances that influence renewable

natural resources, we need a brief reminder about the so-called law of supply and

demand. In economic parlance, both supply and demand are assumed to respond to

the price of commodities. When the price of a commodity is high, entrepreneurs are

encouraged to produce more of it, whereas there is much less incentive when prices

are low (Fig. 19.15). On the other hand, high prices discourage consumer demand,

whereas low prices encourage it (Fig. 19.15). These contrasting responses on the part

of consumers and producers lead to an intersection between supply and demand curves.

In a free, open competitive market system, pricing should adjust over time until the

WILDLIFE HARVESTING 349

40

30

20

10

0

0 20 40 60 80 100

Effort

Harvest or profit

Profit

Harvest

Fig. 19.14Profit and
equilibrium harvest
under constant
environmental
conditions as a function
of effort.