Physical, Human, and Social Capital, and Their Effects on Social and Economic Change

My PhD advisor, Jim Wilen, has already cemented his place in economic history as one of the great thinkers and researchers in fisheries economics and policy. I won't recount the numerous honors that have rightly recognized his contributions to this vitally important area of public policy. Nor will I attempt to list those of his students that have benefited from his intellectual stewardship.

My unfinished idea about environmental law derives from Wilen's groundbreaking work on the role of capital in fisheries economics. In one of the most influential unpublished papers ever, Common Property Resources and the Dynamics of Overexploitation: the Case of the North Pacific Fur Seal," (1976) Wilen sets out a bioeconomic model of the fur seal industry, combining a biological model of fur seal reproduction and an economic model of the fur seal harvesting industry. In my mind, Wilen's big idea in this paper is that fishing capital is "sticky" and that this is what makes overexploitation so persistent in some cases. Especially in fishing (and chasing after other marine resources), there tend to be huge sunk costs and relatively low variable costs, so that boats can be going out and chasing species that have already crashed, and are in danger of permanent overfishing (i.e., for most purposes, extinct); if there is no real alternative use for the capital, then there is nothing to be lost by going out even when the target species has already crashed, and trying to catch the very last of that species. That is the great danger of overcapitalization in fishing and other marine exploitations -- the tendency to lock in certain behaviors that will persist long after the economic warning signals have sounded about overexploitation.

Wilen's works co-exists and stands on the shoulders of many other fisheries economists -- Anthony Scott, H. Scott Gordon, and Colin W. Clark, to name just a few. But in terms of value-added applied impact on fisheries policies, I think this contribution stands on its own.

My project is to extend this insight to other areas of environmental and natural resource policy. Climate change is one of several areas that must grapple with questions about capital. Many have written about how the energy infrastructure of most of the world's advance economies is "sticky" because of the expensive, long-lived nature of electricity generation plants. Insofar as that is unchangeable, we have indeed locked in high emissions for decades, and we owe that to the physical capital that has been constructed, the human capital that is narrow and specific to certain electricity generation technologies, and the social capital that seems to be predicated on certain industries, practices, and methods of electricity generation (like coal mining). Capital is sticky, and that is what makes change hard.