FISH TALES ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○C LASSROOM LESSONS IABOUTNTRODUCTION ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ E CONOMICS AND THE ENVIRONMENT FISH TALES By Donald R. Wentworth and Kathryn Ratté PERC—The Center for Free Market Environmentalism Bozeman, Montana Copyright © 2002 by PERC. “Fishing the World’s Oceans: The Problem / A Solution,” is reprinted with permission. This curriculum is available on PERC’s Web site: www.perc.org. Distribution of this paper beyond classroom use requires permission from PERC. ○○○ PERC—the Center for Free Market Environmentalism— is a nationally recognized institute located in Bozeman, Montana. The organization’s primary goal is to provide market solutions to environmental problems. PERC pioneered the approach known as free market environ- mentalism and conducts research in the areas of water, forestry, public lands, and endangered species, among others. Free market environmentalism is based on several tenets: Private property rights encourage stewardship of resources; government subsidies often degrade the environment; market incentives encourage individuals to protect environmental quality; and polluters should be liable for the harm they cause others. ○○○○○ PERC —T HE CENTER FOR FREE MARKET ENVIRONMENTALISM— 502 SOUTH 19TH AVENUE, SUITE 211 BOZEMAN, MONTANA 59718-6827 PHONE: 406-587-9591 FAX: 406-586-7555 www.perc.org [email protected] CONTENTS ○○○○○○○○○ INTRODUCTION AND BACKGROUND ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ 1 LESSON 1 “All the Fish in the Sea” ○ ○ ○ ○○○○○○○○○○○○○○○○○○ 9 LESSON 2 PREPARATION Solving Economic Mysteries ○○○○○○○○○○○○○○○○○○○ 23 MYSTERY 1 Do You Always Hurt the One You Love? ○○○○○○○○○○○ 27 MYSTERY 2 If We’re So Smart . ? ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○○○○○○○○○○○○ 35 MYSTERY 3 Old MacDonald Had a (Fish?!) Farm ○○○○○○○○○○○○ 45 ○○○○○○ MYSTERY 4 Rules or Rights? ○○○○○○○○○○○○○○○○○○○○ 55 MYSTERY 5 “Water Is for Fightin’” ○ ○ ○○○○○○○○○○○○○○○○○○○○ 63 MYSTERY 6 They Can’t Run and They Can’t Hide ○○○○○○○○○○○○○ 73 MYSTERY 7 Strange But True Fish Stories ○○○○○○○○○○○○○○○○○ 81 APPENDIX “Fishing the World’s Oceans” ○○○○○○○○○○○○○○○○○ 91 ACKNOWLEDGMENTS ○○○○○○○○○ The authors appreciate the support of the M. J. Murdock Charitable Trust of Vancouver, Washington, in the preparation of this curriculum, Fish Tales. The content is largely based on work conducted by PERC research- ers, especially PERC Senior Associate Donald R. Leal. We also appreciate the assistance of Jane S. Shaw, who edited the manuscript, Dianna Rienhart, who was in charge of production, and Mandy-Scott Bachelier, who designed the publication and artwork. FISH TALES ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ FISHI NTRODUCTION TALESAND BACKGROUND ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○CLASSROOM LESSONS ABOUT ECONOMICS AND ENVIRONMENTAL PROTECTION Once people truly grasp the fundamentals of scarcity, choice, and cost, and understand the crucial role of incentives in shaping behavior, these become embedded in their thinking. They. analyze issues (including environmental issues) in a different way. — Marc A. Johnson, Economics Teacher Smoky Hill High School, Cherry Creek School District, Colorado The current state of fisheries Much disagreement exists about the causes of along the Pacific coast, espe- the salmon decline. Over time, various “vil- cially the northwestern United States lains” have been identified, from the system of and southern Canada, is troubling. Many dams on major rivers, to poor water quality fish populations are dwindling in number. Sev- blamed on logging and farming practices, to eral, including chinook in the Central Valley of overfishing by commercial and tribal fishers. California and the upper Columbia and Snake While any and all of these factors may have River basins, have been listed as endangered by contributed to the problem, economists under- the U.S. government. stand that they are not fundamental causes. The fundamental causes are found in the incentives This booklet consists of two lessons (and an created by the “rules of the game”—the laws, appendix) designed to help high school teachers customs, and norms that form the framework in address this key environmental controversy. The which decisions are made. Economic reasoning second lesson has multiple parts and can be used helps students, and the rest of us, understand over a period of days or weeks. The activities how the rules affect individuals’ decisions. More begin by examining the decline in specific importantly, it helps us turn attention from salmon, shellfish, and halibut fisheries that finger-pointing to finding solutions. affect Northwest communities. Then they lead students to a broader focus using examples of Through the use of economic reasoning, these fisheries deterioration—and recovery—world- Fish Tales lessons help students analyze the wide. The lessons are formatted to be useful in a problem of deteriorating fisheries. While these variety of disciplines, regardless of whether the lessons offer no simple answers for saving the teacher’s emphasis is on understanding environ- halibut or bringing back the salmon, they do lay a mental problems, teaching economics, or debat- foundation upon which to begin building solu- ing contemporary issues. tions that work for people and for fish. ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ 1 FISH TALES ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ I NTRODUCTION AND BACKGROUND ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ HOW TO USE THESE LESSONS The Appendix provides an opportunity to “play” with the economic principles in a more light- Fish Tales uses economic reasoning to provide a hearted context. It can be a vehicle for teachers to framework for students to solve mysteries sur- informally assess what their students have rounding fisheries decline. The deductive reason- learned. ing process relies upon four major principles in economics: ECONOMIC STANDARDS FOUR MAJOR PRINCIPLES IN ECONOMICS Each of the following standards from the Volun- Choice: Scarcity forces people to choose. tary National Content Standards in Economics developed by the National Council on Economic Incentives: Incentives are the rewards or Education (www.economicsamerica.org) and the punishments that influence how people Foundation for Teaching Economics choose to use resources. (www.fte.org) is addressed in one or more of the lessons: Property Rights: Property rights provide important incentives; people tend to take Standard 1: Productive resources are limited. better care of things they own and value. Therefore, people cannot have all the goods and services they want. As a result, they must Voluntary Trade: Individuals trade only choose some things and give up others. when both expect to be better off as a (Lessons 1 & 2) result of the exchange. Standard 3: Different methods can be used to Students use these four principles to solve seven allocate goods and services. People acting mysteries in Lesson 2. Environmental problems individually or collectively through govern- usually result from choices made by individuals ment must choose which methods to use to and groups in light of the incentives they face. allocate different kinds of goods and services. Because economics can predict how people tend (Lessons 1 & 2) to respond when choosing how to use scarce resources, the principles help explain the human Standard 4: People respond predictably to behavior exhibited in each mystery situation. positive and negative incentives. (Lessons 1 & 2) Lesson 1 (and the section in this teacher back- ground chapter, “Economic Reasoning: A Brief Standard 5: Voluntary exchange occurs only Primer”) introduce the mental tools of economic when all participating parties expect to gain. analysis. While Lesson 1 and the primer are This is true for trade among individuals or essential for students new to economic reason- organizations within a nation, and usually ing, they are also useful as a review to help among individuals or organizations in differ- economics students transfer their knowledge ent nations. (Lesson 2) into the environmental context. ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ 2 FISH TALES ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ I NTRODUCTION AND BACKGROUND ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Standard 7: Markets exist when buyers and ABOUT THE LESSONS sellers interact. This interaction determines market prices and thereby allocates scarce LESSON 1: goods and services. (Lesson 2) “All the Fish in the Sea” introduces students to Standard 10: Institutions evolve in market economic reasoning and to “the tragedy of the economies to help individuals and groups commons,” a concept economists find useful in accomplish their goals. A different kind of explaining overuse of resources. Use or abuse of institution, clearly defined and enforced a resource, such as a fishery, that is owned by property rights, is essential to a market everyone (“in common”) is a tragedy in the economy. (Lessons 1 & 2) literary sense. Like the beloved Romeo and Juliet in Shakespeare’s play, environmental commons are precious. People value environmental ameni- NAAEE GUIDELINES ties highly, and they value the equal and open access they have to resources like fisheries. In addition to meeting the Voluntary National Unfortunately, that open access creates incentives Content Standards in Economics, the lessons that inevitably result in