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On the Contributions of Colin Clark to Fisheries Economics

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Gordon Munro discusses the contributions of Colin Clark

Image courtesy of interviewee. September 3, 2024

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The transcript covers an interview discussing the contributions of Colin Clark, a mathematician who significantly influenced fisheries economics. The speaker expresses gratitude towards Clark and describes him as a pivotal figure in the field, particularly in integrating mathematics with the management of natural resources.

Clark began his career in pure mathematics but shifted his focus to fisheries economics due to his interest in natural resources. His dynamic analytical approach contrasted sharply with the traditional static methods prevalent in the field at the time. Despite initial resistance from economists, Clark, along with the speaker, laid the groundwork for a seminal article in 1975 that later expanded into a major book on mathematical bioeconomics, emphasizing the importance of viewing natural resources as capital.

Two key ideas from their work are highlighted: 1) All natural resources should be seen as capital assets that can yield returns, necessitating dynamic investment analysis; 2) The critical connection between biological and economic models in managing fisheries resources, leading to the development of bioeconomics.

The speaker discusses the importance of interdisciplinary collaboration and the challenges of resource management, particularly in cases where fishermen face restrictions and must adjust to changing resource availability. The conversation also touches upon real-world implications, including past failures in fisheries management, such as the collapse of the northern cod, where the misapplication of biological models led to dire consequences. The interview wraps up on a hopeful note, showcasing successful management practices that prioritize the sustainability of multiple fish species within an ecosystem.

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Here are five key points from the video regarding the contributions and legacy of mathematician Colin Clark in the field of fisheries economics:

1. **Interdisciplinary Contributions**: Colin Clark transitioned from a pure mathematician to a key figure in fisheries economics, collaborating with economists to apply mathematical theories to the sustainable management of natural resources, particularly fisheries. His work highlighted the importance of interdisciplinary research, bridging the gap between mathematics and economics.

2. **Dynamic vs. Static Analysis**: Clark criticized the static analysis predominating fisheries economics of his time, which failed to account for the dynamic nature of resource management. He advocated for a dynamic analysis that considers time and investment strategies, resulting in more effective management decisions for renewable resources.

3. **Natural Resources as Capital Assets**: One of Clark's significant contributions was the idea that natural resources should be viewed as capital assets. This perspective emphasizes the need to manage these resources effectively to yield long-term returns to society, changing how economists and policymakers view fisheries management.

4. **Collaboration with Biologists**: Clark highlighted the necessity of linking biological models with economic models in fisheries management. His work demonstrated that understanding the biology of fish populations is critical for developing accurate economic models, advocating for an integrated approach to resource management that incorporates both economic and biological insights.

5. **Investment Programs for Resource Recovery**: Clark's research underscored the importance of developing investment programs for rebuilding overexploited fish stocks. He noted that effective management requires recognizing the time it takes to restore resources and implementing investment strategies that account for various biological and economic factors involved in fisheries.

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The video you discusses the life and contributions of Colin Clark, a mathematician whose work significantly impacted fisheries economics and the intersection of economics and biology. Below is a summarized analysis with similar themes drawn from articles that might discuss topics such as resource management, bioeconomics, interdisciplinary research, and the importance of fisheries sustainability.

### Similar Articles:

1. **The Economics of Fisheries Management**:
- This article could outline the principles of fisheries economics, emphasizing the importance of sustainable practices, investment theories, and the role of dynamic analysis in managing fish resources effectively.

2. **Bioeconomic Models in Environmental Management**:
- This piece might focus on the incorporation of biological factors into economic models, showcasing how interdisciplinary collaboration between biologists and economists can lead to better resource management strategies.

3. **Sustainable Resource Management: Bridging Economics and Ecology**:
- An exploration of methods to align economic growth with ecological sustainability, discussing cases where economic frameworks have been effectively integrated with ecological principles for better outcomes in resource management.

4. **The Role of Mathematical Modeling in Resource Economics**:
- This article could delve into how mathematicians contribute to understanding resource dynamics, including fisheries, by developing models that predict outcomes based on various investment and management strategies.

5. **Dynamic Optimization in Renewable Resource Economics**:
- A detailed analysis of dynamic optimization techniques in managing renewable resources, stressing the importance of considering temporal factors in investment and stock management.

6. **Interdisciplinarity in Environmental Economics**:
- An examination of how different academic disciplines can come together to tackle complex environmental issues, including the role of economists, mathematicians, and ecologists in resource management.

7. **Case Studies in Fisheries: Lessons Learned from Historical Overfishing**:
- This article might survey historical cases of overfishing, illustrating how misjudgments in economics and biology led to severe consequences, and what modern approaches can be taken to avoid such pitfalls.

8. **Capital Assets in Natural Resource Management**:
- An exploration of how natural resources should be viewed as capital assets, discussing investment strategies and management practices that ensure the long-term availability and sustainability of these resources.

These articles would share themes with the given video, providing a broader convideo on the importance of interdisciplinary approaches in managing economic resources and the critical need for integrating scientific understanding with economic principles in resource management, particularly in fisheries.

X-TIMESTAMP-MAP:LOCAL=00:00:00.000,MPEGTS=900000

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Colin Clark, who passed away just a few months ago,

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was a mathematician from the University

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of British Columbia in Canada.

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Uh, who in the words of Martin Smith, former editor

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of a major journal in Fisher's economics,

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Marine Resource Economics, at a fundamental

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and enduring impact upon fisheries, economics,

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and recognition of his contribution

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to fisheries, economics in other fields.

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He was elected as a fellow of the Royal Society in 1997.

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It was very prominent. So how did all, all this come about?

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So, Colin, began his career as a pure mathematician

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and prospered as such, he was, he was promoted.

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But after a decade, beginning in the 1970s, he became bored

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with pure mathematics

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and having a long lifetime interest in natural resources.

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He decided on one sabbatical

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that he would up try applying his mathematical skills,

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studying the management of natural resources,

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and turned to fisheries and whales in particular,

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because they were an endangered species.

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And so doing, he came up with results beginning in the early

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seventies that appeared to run counter

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to the standard fisheries economics of the day, which,

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the standard fisheries economics of the day was based upon.

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Try not to get technical upon timeless

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or what economists called static analysis.

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Uh, any of your listeners who've taken intro,

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introduction to economics will gone through.

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So-called Microeconomics, which is static Timeless

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Collin's analysis was dynamic.

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He's looking at investing in these resources now.

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He was in fact not well received by economists.

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In fact, he was rebuffed by many of them.

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But he came to collaborate with an economist

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who was a complete novice to the field,

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but he'd been out in, on a program in Malaysia

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and stumbled into a fisheries project

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and came up with an interesting policy problem.

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And, who couldn't get any help from

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his fellow economists.

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And I was that economist. This was 50 years ago.

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So our collaboration, it was, it was it, if we had time,

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I'd give a pitch on interdisciplinary research.

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'cause that's what we did. It meant surmounting

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major disciplinary barriers.

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'cause mathematicians and economists talk different

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languages, but surmounting the barriers,

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the payoff was enormous.

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So this resulted in an article which is published in late

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1975 that was at first shunned,

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but I think it's fair enough

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to say it's not regarded as seminal.

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And the results of that article

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Were incorporated and then greatly expanded upon

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Collins book.

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Now, a classic book that came out the following year,

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1976, entitled Mathematical Bio Economics, the

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Optimal Management of Renewal Resources,

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which went into three editions.

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So the two fundamental ideas I think

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that are brought out in this article

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and this book, first of all, when I looked at

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what Colin was doing, was they trying to do, I realized that

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what he was attempting to apply, he didn't realize it was

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to apply the economist theories of capital

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and, investment.

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And this goes back to an old idea that economists had sort

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of drifted from, because the analysis is so difficult.

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But it's an idea which is now commonplace.

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The idea that all natural resources are capital assets.

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And to an economist,

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a capital asset is any asset which offers a stream

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of returns to society through time.

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So the studio you are in right now is a capital asset.

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My computer is a capital asset.

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And so when economist deal with capital in any form,

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be it, produce capital, human capital,

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natural resources, they ask two questions.

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What's the optimal stock? How much do you want?

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'cause it, it costs, costs you

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to build up a stock of capital.

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So where do you wanna go? And the second question is,

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if you're not there, you're not at the optimal stock.

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How do you want to get there? What's the

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appropriate investment program?

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Do you wanna invest quickly or slowly?

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And for this only dynamic analysis,

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dynamic is just means you're taking time into

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account explicitly.

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So I've got a big investment project,

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which is gonna last for several years.

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Obviously I have to think through time.

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So economists had sort of realized this,

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but again, it goes back to the, to the fifties, really is,

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but they drifted away 'cause the analysis was too difficult.

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And the claim, which I now make, which I now make, is

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that it really took, the work

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of a professional mathematician to deal with this,

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because I've dealt with mathematical economists

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and the skills of a professional mathematician are far,

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far, far ahead of in, of the best of the ma mathematics

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of the ma mathematical e economists.

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So in what we did in the this aforementioned article is

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that we came up with clear

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and readily understandable decision rules,

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investment decision rules, one

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of which is now in the literature referred to

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as the fundamental rule

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or equation of renewable resource management.

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No, the second fundamental idea, every

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economics model of a fishery rests upon a biological model.

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Even what, even regardless of whether or not it's stated,

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and economists were vague,

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what Collins started producing were vaguely aware of this,

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but tended to ignore it.

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But if you regard fishery resources of capital,

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you have to go to the biology.

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Suppose you're investing in a fishery resource,

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whether the extent the speed with which you can invest to

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that resource is gonna depend upon whether the resource is

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fast growing or, or slow growing.

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And so the idea

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that the biology must be, that they must be firmly explicit,

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explicitly linked with the economics.

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So we got the idea of bio economics.

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And so I claim that one of Colin's

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great achievements is create a bridge between

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economics and biology.

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And the mathematical omics bio economics book

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that I referred to in its several editions was written

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with biologists in mind as well as economists.

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Now as an economist, another point in natural resources,

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economics, it has to be interdisciplinary.

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I have to be able to, I had to be able to talk with,

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with mathematicians,

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but I have to be able to talk sensibly with biologists.

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I do a lot of work in international fisheries,

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and I have to be able to talk sensibly

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with specialists in international fisheries law.

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So the, the investment aspect

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of fisheries economics in this our 1975 article

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and the first edition of Collins Book, mathematical omics,

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was not in fact adequately dealt with.

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There's a concept of what do we, I try not

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to be too esoteric, called malleability of capital.

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The, so in the terms of the fisheries, if you think of,

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you've got the fisheries capital,

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but you have produced capital vessels, gear,

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processing equipment plus human capital, fishermen,

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processing workers with regards to a particular fishery.

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If the produced capital

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and human capital is perfectly malleable,

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it means you can move

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that capital outta the fishery quickly and without costs.

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And in many cases, this is anything but the case.

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I mean, we had a famous example in Canada, the collapse

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of a fishery resource, Northern cod,

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which happened 30 years ago, in which the government

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of Canada had to introduce a temporary moratorium,

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which has been lifted just a few weeks ago, 30 years later.

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But it caused tremendous problem

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because the fleets, the fishermen, the pro plants,

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couldn't easily move elsewhere.

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So this issue of non malleability of capital,

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led to a second article in which Colin, in fact,

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he found the mathematics was too difficult for him.

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He had to draw upon, the skills

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of a fellow mathematician, a very brilliant mathematician

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by the name of Frank Clark.

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And, again, this was, these, this is a problem,

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which was impossible for economists acting alone to solve.

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They had to work, they had to work together.

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So the, this article, which came out in 1979,

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quite a few, well, my fellow economists tend to

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shy away from it because the analysis is pretty difficult.

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But when I talk with practitioners

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about rebuilding resources, this is the real world.

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This is the real world.

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So one of your questions was, okay, this a lot of

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esoteric economics and mathematics and con economics.

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What does it have to do with actual management?

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Well, my answer is everything. Everything.

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Because you've got to regard these resources as

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the capital assets, which you, which you, you want

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to conserve, not just because you're green

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and it's a good thing to do, but

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because these are assets that are capable of

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yielding returns to society.

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O over time. Now, a small thing,

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the first thing is if you're dealing with an investment,

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you're looking at returns in the future.

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Who else can predict the future? None of us.

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So uncertainty is critical central

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to all fisheries management in the early static analysis

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as it's timeless, you ignore the uncertainty.

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So you ignoring big chunk of the real world.

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Now know another example on a, on a bigger note,

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I did some work with rural bank.

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I met an economist there by the name of John Burden,

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who's left the bank.

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But he said that he, a lot of his work

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with the bank was dealing with, with

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West African coastal states.

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And what they, what they were started doing

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before he left the bank, they would go

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to these coastal states

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and say, look, your fishery resources are not just

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of interest to your fishing industry.

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These are capital assets, which if you manage them well,

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will yield returns to society as a whole.

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It won't just mean a prosperous,

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it'll be more schools, more hospitals.

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And so the, the World Bank now says, for any economy,

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what's central to them is their stock of capital.

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Produce capital, natural capital, human capital.

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And so when I talked to John, he, he said that Colin

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and I were way ahead of our time back in, back in 75, 76.

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So the, the idea that natural resources were type

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of capital was sort of vaguely understood,

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but not really appreciated back in the mid seventies.

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Now it's commonplace.

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So in the United States, a couple of years ago,

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as I told my students under a presidential order to trying

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to develop the national income accounts

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to bring in natural capital, which they had not done before.

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So also with regards to capital in terms of management,

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let's look at the domestic management.

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The trek is to get, to get,

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management regimes in which the industry will regard these

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fishery resources as capital,

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which in which it is their own selfish interest to conserve.

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And we have an example, from, I try not

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to be too parochial from my own part of Canada,

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British Columbia and the industry

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with Groundfish tra fishery, very complex industry.

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30 years ago that industry was a mess, fleet mess so bad

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that the, the government, federal government had

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to shut it down for a couple of years.

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But they've now got a management regime in place

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in which the industry is going to the government to say,

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we think these specific Fisher resources are in trouble.

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We want you to cut the total liable catch.

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Moreover, we, the industry are gonna hire scientists to work

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with you, the government.

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So they're obviously regarding these as capital assets.

13:58.625 --> 14:01.035
And again, why So,

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because if the, these capital assets deteriorate,

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it's gonna hurt them economically very, very seriously.

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Now, on the investment side, if you're dealing

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with a static analysis

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and investment is, is not an issue in the real world,

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is a tremendous issue.

14:19.305 --> 14:22.365
So the work had been done

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for the world combination of the World Bank and the food

14:25.405 --> 14:28.365
and agriculture organization by economists working

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with biologists, said a lot

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of the world capture fisher resources had been over

14:33.485 --> 14:34.525
exploited in the past.

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They should, they need to be rebuilt. What is this?

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But an investment program?

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An investment program which takes place,

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you're gonna rebuild a resource, it's gonna take time.

14:47.875 --> 14:51.735
I can think of a, tuna reserves app, Australia

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and New Zealand, which have been over exploited.

14:54.255 --> 14:56.215
And the economists and biologists say,

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if you rebuild these resources, get it up to anywhere close

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to the optimum could take 20 years.

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So without this, without the

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ability to apply the economist theory of investment,

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you can't deal with this problem.

15:16.185 --> 15:18.685
And again, this is not just esoteric set,

15:18.685 --> 15:20.325
but you deal with the practitioners.

15:20.795 --> 15:22.685
This, this is the real world.

15:22.795 --> 15:27.205
What do you do when you've got fisheries in which say,

15:27.205 --> 15:30.165
from the developing world in which the fishermen cannot

15:30.585 --> 15:33.165
easily move to other parts of the economy,

15:34.155 --> 15:35.295
how do you deal with this problem?

15:35.475 --> 15:37.815
We still don't have full answers to this.

15:39.275 --> 15:44.065
So to come back to, to repeat

15:44.805 --> 15:48.105
two, the fundamental contributions of Colin Clark.

15:48.275 --> 15:52.465
First of all, it took the economist vague idea of

15:53.735 --> 15:56.745
fisheries resources as natural capital

15:57.325 --> 16:00.065
and firmly embedded in the analysis is

16:00.065 --> 16:02.385
that if you're an up-to-date fisheries, economist,

16:02.385 --> 16:03.665
you have to recognize that.

16:04.005 --> 16:07.305
And it brings in, in investment it's dynamic.

16:08.185 --> 16:11.145
Secondly, as I said, he created this bridge,

16:11.415 --> 16:14.945
fundamental bridge between economists and biologists.

16:16.475 --> 16:18.815
And I know we're running outta time,

16:20.575 --> 16:24.945
but, if I, if I, if you have time,

16:24.945 --> 16:27.105
just let me give you one quick example.

16:27.825 --> 16:31.865
Standard economic analysis, which is due to this famous

16:32.545 --> 16:35.955
Canadian economist, Scott Gordon,

16:36.635 --> 16:40.035
actually rested upon a particular biological model,

16:40.035 --> 16:42.955
which was due to, an American biologist

16:42.955 --> 16:44.235
by the name of MV Schaffer.

16:44.865 --> 16:47.875
Okay. Uh, Schaffer had a, had a basic assumption

16:47.985 --> 16:51.955
that the fishery resources are always uniformly spread out

16:52.015 --> 16:53.955
in the relevant aquatic environment.

16:54.615 --> 16:56.715
So that has a big economic consequence.

16:57.625 --> 17:01.555
What it means is that if as the resource is depleted,

17:02.535 --> 17:05.035
the costs of harvesting are, are gonna go up.

17:05.615 --> 17:08.115
So you think of a trawler dragging a net through the,

17:08.115 --> 17:09.235
through the, the water.

17:09.265 --> 17:11.435
When the resource is abundant,

17:11.845 --> 17:14.955
every tow yields a lot of fish.

17:15.015 --> 17:18.615
So the cost per unit of fish costs is fairly low.

17:18.635 --> 17:21.375
But as the resources depleted, fewer

17:21.395 --> 17:23.735
and fewer fish are in each tow.

17:23.835 --> 17:27.375
So the cost per unit of harvested fish goes way up.

17:28.035 --> 17:29.135
So you reach a point

17:29.835 --> 17:33.685
before the resource is pushed over the edge, where

17:34.435 --> 17:35.485
even the absence

17:35.485 --> 17:37.805
of property rights is no further exploitation

17:37.805 --> 17:39.605
because it, it's too costly.

17:40.945 --> 17:43.205
But there many fishery resources

17:43.205 --> 17:47.485
where this fundamental assumption does not hold EG example,

17:47.715 --> 17:51.605
herring resources at school come together in clusters.

17:52.145 --> 17:55.485
In that case, the cost of fishing

17:56.505 --> 18:00.485
do not shoot up through the ceiling as you, as you harbor,

18:00.665 --> 18:01.965
as you deplete the resource.

18:02.225 --> 18:04.765
So that resource is very, very vulnerable.

18:05.805 --> 18:06.865
And we've had,

18:08.645 --> 18:10.635
cases in which the resources were

18:10.635 --> 18:11.955
almost pushed over the edge.

18:12.055 --> 18:16.015
One example, north Sea herring working

18:16.195 --> 18:17.495
for British fishermen

18:17.515 --> 18:20.575
and other European fishermen, which is now today prosperous,

18:21.715 --> 18:24.285
but in the mid nineties was

18:25.765 --> 18:27.365
greening towards extinction.

18:30.305 --> 18:32.925
How is that saved? Well, let's may take another interview.

18:35.335 --> 18:38.435
So you have to, so what I tell my students,

18:39.145 --> 18:42.675
what I tell my students is that every economic model

18:43.295 --> 18:46.435
of the fishery is based upon a biological model is, see,

18:46.435 --> 18:48.355
we're looking at a specific fishery,

18:48.895 --> 18:52.595
and the biological model is wrong, inappropriate for

18:52.595 --> 18:53.635
that fishery source,

18:53.785 --> 18:57.075
then your economic model will be at best worthless.

18:58.665 --> 19:00.645
It may be just plain dangerous.

19:01.685 --> 19:04.825
It may tell you that if you've got the wrong model,

19:04.875 --> 19:08.025
don't, yeah, the fisheries manage is not very good.

19:08.325 --> 19:10.305
But the fishery resource is not gonna be

19:10.305 --> 19:11.505
driven to extinction.

19:12.205 --> 19:15.395
Oh, really? Oh, really? It, it may be.

19:15.615 --> 19:20.175
We now have, we now have several examples.

19:20.295 --> 19:22.055
I referred to Northern Cod.

19:22.485 --> 19:24.255
This is where the biologists got caught.

19:25.175 --> 19:28.535
'cause they thought the, the cod was the type of resource

19:28.555 --> 19:30.055
of the so-called shaper model

19:30.055 --> 19:32.655
where the resources always evenly spread

19:32.715 --> 19:34.095
out, was appropriate.

19:35.425 --> 19:38.765
And as the resource became depleted, the nature

19:38.785 --> 19:43.595
of the resource changed so that the re the, the economic,

19:43.695 --> 19:46.555
the cost of harvesting didn't shoot up through the ceiling.

19:48.635 --> 19:51.495
And the Canadian government suddenly realized

19:51.525 --> 19:53.655
that the resource has been over exploited.

19:54.845 --> 19:56.385
But they couldn't shut the fishery down

19:56.385 --> 19:59.065
because a lot of the fishing capital

19:59.645 --> 20:02.975
and human capital was non mallable.

20:02.975 --> 20:04.095
They didn't have anywhere else to go.

20:04.755 --> 20:07.575
So they, the authorities cut the harvest,

20:07.795 --> 20:09.175
but not fast enough.

20:09.935 --> 20:12.265
It's like going down a steep hill, you know,

20:12.265 --> 20:13.905
you should really jam on the brakes,

20:13.905 --> 20:17.025
but they just didn't just tap on the brakes gently.

20:18.245 --> 20:20.305
And what do you do if you're in a car down,

20:20.305 --> 20:21.545
going down the hill and you don't

20:21.545 --> 20:22.585
put on the brakes fast enough?

20:22.585 --> 20:24.065
You go over the, over the cliff, right?

20:24.765 --> 20:26.505
That's what's happened in Canada.

20:29.025 --> 20:32.345
And okay, this brings up,

20:33.365 --> 20:34.505
brings up some,

20:34.905 --> 20:37.345
I know you're running outta time brings up something else.

20:38.005 --> 20:42.025
But when you're looking at, at, fishery resources

20:42.025 --> 20:46.415
as capital, then you're, you've got to take,

20:46.635 --> 20:48.085
you've got to take into account

20:48.085 --> 20:50.605
that these species don't act in isolation.

20:50.605 --> 20:54.965
They co they they interact okay with a static analysis

20:54.965 --> 20:56.285
that's impossible to deal with.

20:56.865 --> 20:58.085
But if you're looking at it

20:58.185 --> 21:00.605
as capital resources, no it's not.

21:00.625 --> 21:04.445
It means that you're, rather than managing a single capital

21:04.575 --> 21:07.565
asset, you're dealing with portfolio of assets.

21:08.545 --> 21:12.765
And I came from, my background was money and banking.

21:12.905 --> 21:16.045
So I know all the stuff about portfolio management.

21:16.785 --> 21:21.195
So, and in fact the, I go back to the,

21:21.215 --> 21:24.035
the Northern end co case involving Newfoundland

21:24.455 --> 21:29.005
and Labrador is a good example.

21:30.135 --> 21:33.555
The, the authority you got into this problem of

21:34.695 --> 21:35.715
non mallable capital

21:35.715 --> 21:38.715
because for administrative reasons, it was much easier

21:38.815 --> 21:42.155
for the government to say, alright, you're a cod fisherman.

21:42.155 --> 21:45.735
That's all you do. You don't go to other resources.

21:47.525 --> 21:50.625
The total exports of fisheries from newfound didn't drop.

21:50.845 --> 21:54.305
Why? Because they, with the collapse of cod,

21:54.305 --> 21:57.105
there was an explosion in shrimp and crab.

21:57.995 --> 21:59.845
There's nothing that cod likes better

21:59.845 --> 22:01.525
for breakfast than a shrimp or crab.

22:01.965 --> 22:03.845
The shrimp and crab never had it so good.

22:04.465 --> 22:08.025
So if these fishermen had been able to shift to say,

22:08.315 --> 22:09.705
harvesting shrimp and crab,

22:09.725 --> 22:11.025
you wouldn't have had these problems.

22:13.065 --> 22:14.605
And the economists used to think

22:14.605 --> 22:17.485
that multi-species fisheries were very difficult to manage.

22:19.075 --> 22:20.815
Not so, not so I referred

22:20.815 --> 22:24.455
to my example from British Columbia of the,

22:24.455 --> 22:27.375
so-called Groundfish t tra fishery, which is complex

22:27.435 --> 22:28.935
to some 60 different species,

22:30.135 --> 22:32.275
but the fishermen are given rights to harvest

22:33.465 --> 22:34.485
all of the different species.

22:35.145 --> 22:37.445
So what does it mean if one species is in trouble,

22:38.785 --> 22:40.405
the fishermen can easily shift,

22:41.635 --> 22:44.095
and now you've got a regime in which the fishermen

22:45.195 --> 22:47.855
are even some ways more conservationists than the,

22:47.855 --> 22:48.615
than the government.

00:00 - Colin Clark, who passed away just a few months ago, was a mathematician from the University of British Columbia in Canada. who in the words of Martin Smith, former editor of a major journal in Fisher's economics, Marine Resource Economics, at a fundamental

00:19 - and enduring impact upon fisheries, economics, and recognition of his contribution to fisheries, economics in other fields. He was elected as a fellow of the Royal Society in 1997. It was very prominent. So how did all, all this come about? So, Colin, began his career as a pure mathematician and prospered as such, he was, he was promoted. But after a decade, beginning in the 1970s, he became bored with pure mathematics and having a long lifetime interest in natural resources.

00:59 - He decided on one sabbatical that he would up try applying his mathematical skills, studying the management of natural resources, and turned to fisheries and whales in particular, because they were an endangered species. And so doing, he came up with results beginning in the early seventies that appeared to run counter to the standard fisheries economics of the day, which, the standard fisheries economics of the day was based upon. Try not to get technical upon timeless

01:33 - or what economists called static analysis. any of your listeners who've taken intro, introduction to economics will gone through. So-called Microeconomics, which is static Timeless Collin's analysis was dynamic. He's looking at investing in these resources now. He was in fact not well received by economists. In fact, he was rebuffed by many of them. But he came to collaborate with an economist who was a complete novice to the field,

02:06 - but he'd been out in, on a program in Malaysia and stumbled into a fisheries project and came up with an interesting policy problem. And, who couldn't get any help from his fellow economists. And I was that economist. This was 50 years ago. So our collaboration, it was, it was it, if we had time, I'd give a pitch on interdisciplinary research. 'cause that's what we did. It meant surmounting major disciplinary barriers.

02:36 - 'cause mathematicians and economists talk different languages, but surmounting the barriers, the payoff was enormous. So this resulted in an article which is published in late 1975 that was at first shunned, but I think it's fair enough to say it's not regarded as seminal. And the results of that article Were incorporated and then greatly expanded upon Collins book.

03:04 - Now, a classic book that came out the following year, 1976, entitled Mathematical Bio Economics, the Optimal Management of Renewal Resources, which went into three editions. So the two fundamental ideas I think that are brought out in this article and this book, first of all, when I looked at what Colin was doing, was they trying to do, I realized that what he was attempting to apply, he didn't realize it was to apply the economist theories of capital

03:41 - and, investment. And this goes back to an old idea that economists had sort of drifted from, because the analysis is so difficult. But it's an idea which is now commonplace. The idea that all natural resources are capital assets. And to an economist, a capital asset is any asset which offers a stream of returns to society through time. So the studio you are in right now is a capital asset. My computer is a capital asset.

04:11 - And so when economist deal with capital in any form, be it, produce capital, human capital, natural resources, they ask two questions. What's the optimal stock? How much do you want? 'cause it, it costs, costs you to build up a stock of capital. So where do you wanna go? And the second question is, if you're not there, you're not at the optimal stock. How do you want to get there? What's the appropriate investment program?

04:39 - Do you wanna invest quickly or slowly? And for this only dynamic analysis, dynamic is just means you're taking time into account explicitly. So I've got a big investment project, which is gonna last for several years. Obviously I have to think through time. So economists had sort of realized this, but again, it goes back to the, to the fifties, really is, but they drifted away 'cause the analysis was too difficult.

05:11 - And the claim, which I now make, which I now make, is that it really took, the work of a professional mathematician to deal with this, because I've dealt with mathematical economists and the skills of a professional mathematician are far, far, far ahead of in, of the best of the ma mathematics of the ma mathematical e economists. So in what we did in the this aforementioned article is that we came up with clear and readily understandable decision rules,

05:46 - investment decision rules, one of which is now in the literature referred to as the fundamental rule or equation of renewable resource management. No, the second fundamental idea, every economics model of a fishery rests upon a biological model. Even what, even regardless of whether or not it's stated, and economists were vague, what Collins started producing were vaguely aware of this, but tended to ignore it.

06:18 - But if you regard fishery resources of capital, you have to go to the biology. Suppose you're investing in a fishery resource, whether the extent the speed with which you can invest to that resource is gonna depend upon whether the resource is fast growing or, or slow growing. And so the idea that the biology must be, that they must be firmly explicit, explicitly linked with the economics. So we got the idea of bio economics.

06:52 - And so I claim that one of Colin's great achievements is create a bridge between economics and biology. And the mathematical omics bio economics book that I referred to in its several editions was written with biologists in mind as well as economists. Now as an economist, another point in natural resources, economics, it has to be interdisciplinary. I have to be able to, I had to be able to talk with, with mathematicians,

07:26 - but I have to be able to talk sensibly with biologists. I do a lot of work in international fisheries, and I have to be able to talk sensibly with specialists in international fisheries law. So the, the investment aspect of fisheries economics in this our 1975 article and the first edition of Collins Book, mathematical omics, was not in fact adequately dealt with. There's a concept of what do we, I try not to be too esoteric, called malleability of capital.

08:07 - The, so in the terms of the fisheries, if you think of, you've got the fisheries capital, but you have produced capital vessels, gear, processing equipment plus human capital, fishermen, processing workers with regards to a particular fishery. If the produced capital and human capital is perfectly malleable, it means you can move that capital outta the fishery quickly and without costs. And in many cases, this is anything but the case.

08:40 - I mean, we had a famous example in Canada, the collapse of a fishery resource, Northern cod, which happened 30 years ago, in which the government of Canada had to introduce a temporary moratorium, which has been lifted just a few weeks ago, 30 years later. But it caused tremendous problem because the fleets, the fishermen, the pro plants, couldn't easily move elsewhere. So this issue of non malleability of capital, led to a second article in which Colin, in fact,

09:18 - he found the mathematics was too difficult for him. He had to draw upon, the skills of a fellow mathematician, a very brilliant mathematician by the name of Frank Clark. And, again, this was, these, this is a problem, which was impossible for economists acting alone to solve. They had to work, they had to work together. So the, this article, which came out in 1979, quite a few, well, my fellow economists tend to shy away from it because the analysis is pretty difficult.

09:56 - But when I talk with practitioners about rebuilding resources, this is the real world. This is the real world. So one of your questions was, okay, this a lot of esoteric economics and mathematics and con economics. What does it have to do with actual management? Well, my answer is everything. Everything. Because you've got to regard these resources as the capital assets, which you, which you, you want to conserve, not just because you're green

10:31 - and it's a good thing to do, but because these are assets that are capable of yielding returns to society. O over time. Now, a small thing, the first thing is if you're dealing with an investment, you're looking at returns in the future. Who else can predict the future? None of us. So uncertainty is critical central to all fisheries management in the early static analysis as it's timeless, you ignore the uncertainty.

11:02 - So you ignoring big chunk of the real world. Now know another example on a, on a bigger note, I did some work with rural bank. I met an economist there by the name of John Burden, who's left the bank. But he said that he, a lot of his work with the bank was dealing with, with West African coastal states. And what they, what they were started doing before he left the bank, they would go

11:32 - to these coastal states and say, look, your fishery resources are not just of interest to your fishing industry. These are capital assets, which if you manage them well, will yield returns to society as a whole. It won't just mean a prosperous, it'll be more schools, more hospitals. And so the, the World Bank now says, for any economy, what's central to them is their stock of capital. Produce capital, natural capital, human capital.

12:04 - And so when I talked to John, he, he said that Colin and I were way ahead of our time back in, back in 75, 76. So the, the idea that natural resources were type of capital was sort of vaguely understood, but not really appreciated back in the mid seventies. Now it's commonplace. So in the United States, a couple of years ago, as I told my students under a presidential order to trying to develop the national income accounts to bring in natural capital, which they had not done before.

12:43 - So also with regards to capital in terms of management, let's look at the domestic management. The trek is to get, to get, management regimes in which the industry will regard these fishery resources as capital, which in which it is their own selfish interest to conserve. And we have an example, from, I try not to be too parochial from my own part of Canada, British Columbia and the industry with Groundfish tra fishery, very complex industry.

13:21 - 30 years ago that industry was a mess, fleet mess so bad that the, the government, federal government had to shut it down for a couple of years. But they've now got a management regime in place in which the industry is going to the government to say, we think these specific Fisher resources are in trouble. We want you to cut the total liable catch. Moreover, we, the industry are gonna hire scientists to work with you, the government. So they're obviously regarding these as capital assets.

13:58 - And again, why So, because if the, these capital assets deteriorate, it's gonna hurt them economically very, very seriously. Now, on the investment side, if you're dealing with a static analysis and investment is, is not an issue in the real world, is a tremendous issue. So the work had been done for the world combination of the World Bank and the food and agriculture organization by economists working

14:28 - with biologists, said a lot of the world capture fisher resources had been over exploited in the past. They should, they need to be rebuilt. What is this? But an investment program? An investment program which takes place, you're gonna rebuild a resource, it's gonna take time. I can think of a, tuna reserves app, Australia and New Zealand, which have been over exploited. And the economists and biologists say,

14:56 - if you rebuild these resources, get it up to anywhere close to the optimum could take 20 years. So without this, without the ability to apply the economist theory of investment, you can't deal with this problem. And again, this is not just esoteric set, but you deal with the practitioners. This, this is the real world. What do you do when you've got fisheries in which say, from the developing world in which the fishermen cannot

15:30 - easily move to other parts of the economy, how do you deal with this problem? We still don't have full answers to this. So to come back to, to repeat two, the fundamental contributions of Colin Clark. First of all, it took the economist vague idea of fisheries resources as natural capital and firmly embedded in the analysis is that if you're an up-to-date fisheries, economist, you have to recognize that.

16:04 - And it brings in, in investment it's dynamic. Secondly, as I said, he created this bridge, fundamental bridge between economists and biologists. And I know we're running outta time, but, if I, if I, if you have time, just let me give you one quick example. Standard economic analysis, which is due to this famous Canadian economist, Scott Gordon, actually rested upon a particular biological model, which was due to, an American biologist

16:42 - by the name of MV Schaffer. Okay. Schaffer had a, had a basic assumption that the fishery resources are always uniformly spread out in the relevant aquatic environment. So that has a big economic consequence. What it means is that if as the resource is depleted, the costs of harvesting are, are gonna go up. So you think of a trawler dragging a net through the, through the, the water. When the resource is abundant,

17:11 - every tow yields a lot of fish. So the cost per unit of fish costs is fairly low. But as the resources depleted, fewer and fewer fish are in each tow. So the cost per unit of harvested fish goes way up. So you reach a point before the resource is pushed over the edge, where even the absence of property rights is no further exploitation because it, it's too costly.

17:40 - But there many fishery resources where this fundamental assumption does not hold EG example, herring resources at school come together in clusters. In that case, the cost of fishing do not shoot up through the ceiling as you, as you harbor, as you deplete the resource. So that resource is very, very vulnerable. And we've had, cases in which the resources were almost pushed over the edge.

18:12 - One example, north Sea herring working for British fishermen and other European fishermen, which is now today prosperous, but in the mid nineties was greening towards extinction. How is that saved? Well, let's may take another interview. So you have to, so what I tell my students, what I tell my students is that every economic model of the fishery is based upon a biological model is, see, we're looking at a specific fishery,

18:48 - and the biological model is wrong, inappropriate for that fishery source, then your economic model will be at best worthless. It may be just plain dangerous. It may tell you that if you've got the wrong model, don't, yeah, the fisheries manage is not very good. But the fishery resource is not gonna be driven to extinction. really? really? It, it may be. We now have, we now have several examples.

19:20 - I referred to Northern Cod. This is where the biologists got caught. 'cause they thought the, the cod was the type of resource of the so-called shaper model where the resources always evenly spread out, was appropriate. And as the resource became depleted, the nature of the resource changed so that the re the, the economic, the cost of harvesting didn't shoot up through the ceiling. And the Canadian government suddenly realized

19:51 - that the resource has been over exploited. But they couldn't shut the fishery down because a lot of the fishing capital and human capital was non mallable. They didn't have anywhere else to go. So they, the authorities cut the harvest, but not fast enough. It's like going down a steep hill, you know, you should really jam on the brakes, but they just didn't just tap on the brakes gently.

20:18 - And what do you do if you're in a car down, going down the hill and you don't put on the brakes fast enough? You go over the, over the cliff, right? That's what's happened in Canada. And okay, this brings up, brings up some, I know you're running outta time brings up something else. But when you're looking at, at, fishery resources as capital, then you're, you've got to take,

20:46 - you've got to take into account that these species don't act in isolation. They co they they interact okay with a static analysis that's impossible to deal with. But if you're looking at it as capital resources, no it's not. It means that you're, rather than managing a single capital asset, you're dealing with portfolio of assets. And I came from, my background was money and banking. So I know all the stuff about portfolio management.

21:16 - So, and in fact the, I go back to the, the Northern end co case involving Newfoundland and Labrador is a good example. The, the authority you got into this problem of non mallable capital because for administrative reasons, it was much easier for the government to say, alright, you're a cod fisherman. That's all you do. You don't go to other resources. The total exports of fisheries from newfound didn't drop. Why? Because they, with the collapse of cod,

21:54 - there was an explosion in shrimp and crab. There's nothing that cod likes better for breakfast than a shrimp or crab. The shrimp and crab never had it so good. So if these fishermen had been able to shift to say, harvesting shrimp and crab, you wouldn't have had these problems. And the economists used to think that multi-species fisheries were very difficult to manage. Not so, not so I referred

22:20 - to my example from British Columbia of the, so-called Groundfish t tra fishery, which is complex to some 60 different species, but the fishermen are given rights to harvest all of the different species. So what does it mean if one species is in trouble, the fishermen can easily shift, and now you've got a regime in which the fishermen are even some ways more conservationists than the, than the government.

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