Bumfights transactions

In 2002 a Las Vegas film maker came up with a hideous business model: pay homeless people a few dollars or a six pack of beer to conduct dangerous stunts, or to engage in fistfights with other homeless people, and film them. The movies, marketed under the insensitive brand name Bumfights, caused a storm of criticism, especially from advocacy organisations for homeless people, who argued the movies legitimized violence against homeless people, and were demeaning and dehumanizing to the people who participated.

The film makers responded that all homeless featured in the movies participated voluntarily. Surely they can make their own decisions? To which a professor responded

“Even if the homeless aren’t forced to perform, it’s inaccurate to describe people without adequate shelter, food or clothing as having choices.”

I hear the same argument in debates on international trade, Payments for Environmental Services, and other transactions between highly unequal parties: once an African lady reacted angrily to the concept of REDD+, arguing "it's not a free choice!" I believe it points towards a moral flaw in economic theory that many of my colleagues either do not see, do not want to see, or just don't care about. I call these transactions Bumfights transactions, after the movie series.

Forgive me for getting a bit theoretical here. Consider Rufus, the homeless man who featured prominently in Bumfights. Back then, Rufus had no home, no job, and he lived by what little he could earn by collecting empty cans. Let's call the situation he lived in A. Say the film maker offered Rufus $5 if he would ride a shopping cart down a flight of steps. In other words, the film maker offered Rufus a new situation B, which you could define as A + $5 + S, where S is the humiliation and risk of serious injury that goes with the stunt. If Rufus preferred B to A (A ≺ B in mathematical notation), he would participate in the movie; if A ≻ B he would not. Obviously the film maker preferred A ≺ B: for only $5 he would have a lot of fun filming Rufus putting his life at risk, and he would make a big buck selling the video. So they could move from A (no transaction) to B (after the transaction), which they both preferred to A. What's not to like? In economic terms this is called a Pareto improvement: a change that makes at least one person better off, and none worse off.

The objection to this logic is that Rufus "had no choice", but an economist would point out that he did: he could choose to refuse participation and stick with collecting cans for a living. No matter how bad this situation was (I surely don't envy him), obviously participating in Bumfights was better than not participating: after all, he participated, right? Not offering the choice would have left him in A, which is worse than B. The problem is not the transaction; the problem is poverty.

The flaw in this logic is that this may work in the sterile, utilitarian world of microeconomics, but in the real world the film maker also had a choice. He could have paid Rufus $100; he could have offered orange juice instead of alcohol (offering alcohol to somebody with a drinking problem is particularly nasty); he could have refrained from the transaction altogether and donate his $5 to the Salvation Army.

Another issue is that this line of reasoning only works if you care only about the consequences of an act: in other words, it follows a consequentialist ethic, where one could also follow a deontological ethic, or a virtues ethic. Many people consider making money in this way unethical, regardless of the consequences, just for its abusive nature.

Collecting up to 80 kg of sulphur in
a cloud of toxic volcanic fumes and
carrying it down the slope of
Mount Ijen, East Java: hey, it beats
starving to death!

Nevertheless, the line between an "equitable" transaction and a Bumfights transaction is blurry. To take the example of REDD+ again, many developing countries have come round to this idea, after initial opposition; it seems Costa Rica and Indonesia are quite keen on it. And how many people have jobs that are dangerous, or just mind-numbingly boring, just because the only alternative is starvation?

So next time you buy your clothes in a cheap clothes store, ask yourself: am I helping a poor Bangladeshi earn an income or am I taking advantage of his poverty? The question is more difficult than you might think.

Bitung: Plight of the baby tuna

Meet you on the corner of skipjack street and yellowfin street

Recent news announced that Indonesia will become a full member of the Western and Central Pacific Fisheries Commission, instead of a cooperating non-member as it has been so far. This is good news, because the country is an important player in the Western and Central Pacific tuna fishery. Indonesia caught more than 900,000 tons of tuna in 2010, about a third of which was skipjack (cakalang, as the Indonesians call it), and another substantial share is yellowfin (madidihang), bigeye, and other species. What's more, Indonesia and the Philippines are known to catch a large number of juvenile tuna:

Number of yellowfin tuna caught (vertical axis) by 2-cm size class (horizontal axis) in 2012. Blue colours indicate tuna caught by purse seines; yellow indicates tuna caught by fisheries in Indonesia and the Philippines. Yellowfin matures by about 100 cm. Source: Williams, P. and Terawasi, P. 2013. Overview of tuna fisheries in the Western and Central Pacific Ocean, including economic conditions. WCPFC Scientific Commission, Ninth Regular Session.

You can use juvenile tuna as bait, consume it yourself, or sell it. But each juvenile tuna you don't catch may become an adult. This adult tuna would then produce more tuna. It might also fetch a higher market price, especially if it is yellowfin tuna. Granted, it may also be caught in Pacific areas outside Indonesia. In that case Indonesia would not benefit from this one juvenile tuna it leaves in the ocean, although other countries would. So the catch of juvenile tuna is one of the issues WCPFC would like Indonesia to address.

Shinta in action on a handline vessel

Shinta Yuniarta, one of our PhD candidates on BESTTuna, is currently trying to estimate the magnitude of the catch of juvenile tuna (or baby tuna, as the Indonesian fishers call it) through a survey in such ports as Bitung and Ambon. I visited Shinta last week in Bitung to learn as much as I could about the situation on the ground, and to work with her in further sharpening the survey questions and the rest of her research. It was one of those trips that stay with you long after you have boarded the airplane back home.

Everything in Bitung says "fish". And very often, it actually says "tuna". The hotel even smelled of fish when I arrived. It sports a picture of a bigeye tuna right above the breakfast buffet. Small eateries (warung makan as the Indonesians call them) offer pieces of yellowfin tuna in a spicy sauce, or delicious coral fish roasted on a charcoal fire. Everywhere you look there are huge fish processing plants, canneries, or fishing companies that have their own fishing wharf. The small-scale fishers land their fish at the central landing place in the port. Originally it was meant to be an auction, but for some reason the auction never really got off the ground, so fishers sell their fish directly to traders who bring the fish to local markets or to processing companies.

As far as I could see the small-scale fleet featured three main types of fishing. The most common seemed to be the handline fishery, where fishers use a single line with some bait on a hook to catch the tuna. Another important fishery is the pole-and-line fishery, where bait is simply thrown into the water (and water is also sprayed on the surface) to get the tuna into a feeding frenzy, so that it will bite anything that comes along. Fishers then only have to throw in a hook and the tuna will bite; these vessels are usually larger than the handline vessels, and employ a lot of crew. The third common method turned out to be the pajeko, or small purse seine, but this method was mainly used to catch not tuna, but small pelagic species such as anchovies and Indian Mackerel.

Special offer: room with a view in Sulawesi. Water and food not included

In all cases the Fish Aggregation Device (FAD), or rumpon as the Indonesians call it, is important. It's an interesting system. Before I came I was wondering: when you make a FAD and place it in the sea, how do you make sure that it is used by nobody else but you? The solution turned out to be simple: you put a guard on it. Yes, every rumpon has somebody guarding it 24 hours a day. This guy lives in the small hut built on top of it, with probably some sort of radio communication, and makes sure that nobody but the owner catches the fish gathered under it unless the owner is paid a comfortable sum of money. The rumpon guard also informs the owner or his vessels of the amount of fish under it, so they won't waste their time coming to a rumpon with no fish under it.

So what did we learn so far? First, a lot of fishers readily admit that they catch a fair amount of baby tuna. They use it as bait, consume it on board, or take it home to their families. It is not illegal to catch juvenile tuna, so they seem willing to tell us how much they usually catch. And although the weight of baby tuna may be small, the number of baby tuna caught, and the fact that each baby tuna could have become a big, valuable tuna makes that the catch of baby tuna can still be a serious problem. Second, the catch of baby tuna is by far not the only unknown in the Indonesian tuna fishery. There may be unreported or even illegal catch. Some authors argue that Indonesian ports lack sufficient staff to check the accuracy of logbook data. Third, although it was fairly easy to contact and survey small-scale fishers, it turns out to be a lot more difficult to contact large-scale fishing companies.

But perhaps the most important lesson was the reminder that "small-scale" does not necessarily mean "sustainable" or "green". The idea of small-scale fishers tends to conjure up the idyllic images of hardy, honest folk that you see on Discovery Channel, read about in stories like Hemingway's The Old Man And The Sea, or hear about in songs like The McCalmans' "Five O'Clock In The Morning". No doubt that the people we spoke to in Bitung are honest, hard-working people who must endure many hardships to scramble a meagre income for themselves and the family they support. But a lot of fishers and consumers may benefit greatly if less baby tuna were caught. It's a difficult dilemma: a lot of very poor people depend on a fishing method that might disadvantage a lot of others.

Who's the sucker here: Kiribati, Mauritania, or the EU?

In many developing countries with large fish stocks most of the fishing is done by fleets from rich countries such as Japan, Spain, or The Netherlands. The EU has made a few new deals recently and they make interesting case studies.

On the EU's latest deal with Kiribati (H/T Adam Baske):

Kiribati has secured a US$1.71 million deal for 15,000 tonnes of tuna per year with the European Union. Under the agreement, the EU is now able to deploy four purse seiner and six longline vessels in Kiribati’s waters.

There are many Pacific Island Nations making such deals. It's a classical Prisoner's Dilemma: if those countries stick together in the negotiations they could earn a lot more than if they go it alone. No wonder the Parties to the Nauru Agreement are not amused. Dr Transform Aqorau of the PNA comments:

“Kiribati could have generated an annual income of US$11.3 million from its agreement with the EU. But as I said, countries have their own reasons for doing what they do, but you have to wonder why in the face of great need by our people, we allow our natural resources to be sold short?”

On the other side of the globe Mauritania seems to have taken the other extreme. The Dutch newspaper De Volkskrant reports (25 May 2013) that ever since Mauritania's fishing deal with the European Union has come into force, hardly any European fishing vessel has entered Mauritanian waters. Fishing in Mauritania has become unprofitable for these vessels due to several restrictions, including the distance they are required to keep from the coast, the fee they are required to pay, and the number of Mauritanian workers they are required to hire.

European fishing in Mauritania's waters is often portrayed as a hostile takeover of a poor African country's resources by rich nations' fishers, so you may be tempted to cry victory over Western imperialism. But this is no victory for Mauritania (my translation from Dutch):

According to Jedna Deida, a Mauritanian fisheries consultant, four thousand people in the port city of Nouadhibou have lost their jobs because the foreign fishing fleets stay away. A few thousand earned a living as crew. Many others worked in processing factories. "It's a terrible situation, " Deida says. "People can't pay their children's schools. It's been like this for months."

Many coastal (can I call Kiribati coastal?) developing countries struggle with the same question: should we allow foreign fishers in our waters? Under what conditions? Shouldn't we develop our own fisheries? But what if we earn more from lucrative deals with big foreign vessels than from our own small-scale fleet?

Glorifying poverty?

It's an inevitable part of economic development: as infrastructure is improved, and capital is accumulated, and production processes and markets become more efficient, old ways of doing things disappear. There is a nostalgic Irish song that puts it quite well:

By trade I was a cooper;
lost out to redundancy;
like my house that fell to progress
my trade's a memory

The song played through my mind all the time when we saw what was left of the floating market of Cai Be, in the Mekong delta. Our guide told us the once famous floating market was disappearing rapidly in favour of the land-based market now that infrastructure in the region has been much improved. That is perhaps a shame, but perhaps it's also shameful that we think it's a shame.

Like the wooden barrels and casks they used to make, there are few coopers left in our modern economy. We store our beer in aluminum kegs now: much more durable, much more hygienic, much more efficient. But as tourists, we lament the demise of the old ways, for they make our holiday destinations 'charming' and 'exotic'. We curse progress when floating markets are replaced by supermarkets, when thatched roofs turn into corrugated iron, or when small-scale fishers get a job at an industrial-scale purse seiner.

But much of what we find charming is in fact a sign of poverty. Many people in developing countries prefer a corrugated iron roof over a thatched one, and they will get it as soon as they have the money to buy it. Floating markets emerged due to lack of good road infrastructure. Those men playing Chinese chess in a local Vietnamese coffee shop? You may call it the good life, but you might as well call it unemployment.

Yes, as developing countries get richer they start looking more like us: there will be more shops (more chain stores, also, unfortunately), more cars, fewer street stalls, better infrastructure, cleaner streets. Prosperity is often accompanied by a certain cooling of interpersonal relations as people become busier, more efficient, and more business-like. Some of these changes are to be welcomed (better health care, cleaner streets), some changes may be a necessary price to pay for the welcome changes (more efficiency, less surprises), some changes are to be lamented (loss of traditions, old professions that become folklore at best).

But honestly, should they stay poor so you can make pretty pictures?