What can the Tiger King teach us about economics?
If there is one thing that people have been talking about as much as the Coronavirus in recent weeks, it has been the Netflix documentary ‘Tiger King: Murder, Mayhem and Madness’. This show tells the bizarre tale of eccentric Oklahoma zoo owner Joseph Maldonado-Passage – aka ‘Joe Exotic’ – and his bitter rivalry with animal rights activist Carole Baskin. That’s the short version. The very short version.
Exotic ran the Greater Wynnewood Exotic Animal Park which housed a vast number of exotic animals, many of them tigers, hence the names. Baskin owns Big Cat Rescue, a non-profit animal sanctuary, and campaigns, among other things, to end the private trade and ownership of exotic cats.
The documentary shows plenty of behavior from exotic animal owners which will make you gasp. These animals have every right to be treated humanely. But that does not necessitate the banning of the private trade and ownership of exotic cats. Indeed, economics suggests that such private ownership – property rights – can be in the animal’s best interests.
There are more tigers in captivity in America than there are left in the wild. But that is only partly a function of the demand of Americans to own them. It is also partly a function of the collapse in the numbers of tigers in the wild. As recently as 100 years ago, as many as 100,000 wild tigers roamed across Asia. Today, there are about 3,900 tigers left in the wild. This population decline has been driven by a number of factors including poaching for the illegal wildlife trade and overhunting of prey species by locals.
Tigers aren’t the only species to experience such collapses. The world’s ocean fisheries are in decline. Since 1950, nearly 30% of all fisheries have collapsed, and some scientists project that in forty years, all of the planet’s fisheries could disappear.
The problem facing both species is known in economics as a ‘tragedy of the commons’. The solution is private ‘property rights’.
I didn’t see a tiger
Poachers and hunters make their money by killing tigers. Fishermen make theirs from catching fish, which leads quite quickly to death for the fish. In each situation there is only money to be made from the death of the animals.
In fact, the situation is even worse than that. If the hunt or fishing trip doesn’t take place, the tigers or fish could continue growing, they might reproduce, leaving offspring that will also contribute to a larger future yield or, at the very least, allow the continuation of hunting or fishing.
But, while it might benefit hunters or fishermen in general to leave some of the tigers or fish alive and reproducing, it doesn’t benefit them to so as individuals. And it is as individuals that we make decisions.
Each individual hunter or fisherman knows that if they don’t kill the tiger or fish now, the future benefits from growth and reproduction will likely be enjoyed by someone else who happens to hunt or catch the extra tigers or fish later on. Both hunters and fishers respond quite rationally to this incentive. They “race to hunt/fish,” killing the tiger or fish often before they have the chance to reproduce. This leads to declining numbers of tigers and fish and, eventually, the hunters and fishers themselves are out of business.
This is known in economics as a ‘tragedy of the commons’. It occurs where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action.
Here, kitty kitty
To restate, the problem is that there is only money to be made in the killing of the animals. The solution is to make it possible for people to make money from leaving the tigers or fish alive. To achieve this, we have ‘property rights’. These enable fish farmers or the likes of Joe Exotic to reap the rewards from the keeping the fish or tigers alive and letting them – or even encouraging them – to reproduce.
One way that this has been done for fisheries is, first, to determine a ‘total allowable catch’ (TAC) based on biological and other scientific criteria. Then , shares of this TAC, known as ‘individual transferable quotas’ (ITQs) are allocated to fishers. These ITQs can be used, sold, or leased to others. They give fishers enforceable, transferable ‘property rights’.
Economists Roger LeRoy Miller, Daniel K. Benjamin, and Douglass C. North explain how these have worked for fisheries:
A conventional measure of collapse for a fishery is a decline in catch to a level that is less than 10 percent of the maximum recorded catch for that fishery. By this criterion, an average of more than fifty fisheries have reached collapse each year since 1950, in a worldwide pattern that seems to be pointing toward the demise of all fisheries. But in fisheries, when a catch share system is implemented, the process of collapse halts – completely. Moreover, in many if the ITQ fisheries, recovery of fish stocks begins soon after implementation, even as fishermen continue to profitably catch fish.
It is now estimated that had ITQs been implemented in all fisheries beginning in 1970, the incidence of collapse would have been cut by two-thirds. Moreover, instead of watching fisheries collapse today, we would be seeing them get healthier, even as they were supporting harvesters and nourishing consumers. Most importantly, it appears that the power of ITQs to prevent and even reverse fishery collapse applies to species and ecosystems throughout the world.
Adam Smith famously wrote that “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”. Fisheries and exotic cat zoos illustrate that perfectly. We could trust to people’s appreciation of the ‘common good’ not to hunt or fish species to extinction, but experience shows that would be a vain hope. We are better off trusting to the self-interest of fishers with ITQs or private zoo owners with their exotic cats.
To achieve desired outcomes, we are better off aligning private incentives with social ends than trusting in people’s altruism. This often disappoints or shocks people. Don’t economists simply have a gloomy view of human nature? Perhaps. But public policy should deal with people as they are, not as we wish they were.
Anyone with information about Don Lewis’ disappearance is asked to call the Hillsborough County Sheriff’s Office at 813-247-8200.
John Phelan is an economist at the Center of the American Experiment.