The Unseen Currents: Part Ten

Markets, Morality and the Sea:

What Ludwig von Mises Might Say About Quotas

The Long-Term Consequences of ITQs.

When Individual Transferable Quotas (ITQs) were first introduced, they were sold as a fix to overfishing; a way to protect stocks, bring order to chaos, and make fishing more efficient. But decades later, the tide has turned. Beneath the surface of economic “efficiency” lies a quieter transformation: coastal towns hollowed out, working fishers turned into renters of their own livelihoods, and ecosystems reshaped by policies that changed who could fish and who couldn’t. The Unseen Currents explores how the ITQ experiment, from abalone and lobster to the fisheries of tomorrow, has rippled through Australia and the world, exposing the gap between what was seen, and what was never meant to be.

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PART TEN

Markets, Morality and the Sea:

What Ludwig von Mises Might Say About Quotas

Ludwig von Mises never wrote about fish. Yet his warnings about the unintended consequences of intervention echo through the story of Individual Transferable Quotas (ITQs). What began as an attempt to fix a perceived failure of the market, “overfishing,” has, over time, revealed a deeper truth about the limits of managing human behaviour through policy.

The history of ITQs reads almost like a case study in Misesian theory. When governments intervened to control catch effort, they replaced competition at sea with competition for quota. Where once there was rivalry among fishers, there is now rivalry among investors. Each regulation designed to correct one imbalance has created another, pushing the system further from its original purpose. Mises called this the logic of interventionism.

The Knowledge Problem

Mises argued that no central authority can make rational economic decisions without real market prices. In his view, calculation itself becomes impossible when production is directed from above rather than through voluntary exchange. His student, Friedrich Hayek, expanded this argument further. He observed that even if planners could access all the prices they needed, they could never possess the dispersed, local and often unspoken knowledge that people use to make decisions in daily life.

In fisheries, that knowledge once belonged to those who worked the water. Fishers learned through experience, reading the tides, the seasons and the subtle changes that no model could capture. By converting fishing rights into tradeable assets, the ITQ system shifted decision-making from those with practical understanding to those with financial leverage. The people best positioned to know how and when to fish now lease permission from those who have never been to sea.

Hayek’s insight helps explain the quiet failure of such systems. When information becomes centralised and abstracted, it loses touch with the conditions that sustain it. The knowledge that once flowed through human experience is replaced by spreadsheets and share registries, leaving the system blind to its own consequences.

The Seen and the Unseen

The immediate benefits of ITQs, such as fewer boats, steadier catch volumes and stable export markets, are what Frédéric Bastiat might call “the seen.” What remains unseen are the long-term distortions: the consolidation of ownership, the decline of small enterprises, the disappearance of generational succession and the moral hazard of rent without work.

Mises warned that when governments attempt to balance markets through partial intervention, they end up creating conditions that justify further intervention. Each step erodes self-regulating mechanisms and replaces them with bureaucratic management. The ITQ system, designed to align conservation with capitalism, has instead aligned bureaucracy with capital, a hybrid that neither the market nor the ocean can sustain indefinitely.

The Moral Dimension of Ownership

To Mises, ownership was not simply an economic right but a moral responsibility. It linked effort to consequence and stewardship to reward. The ITQ experiment severs that link. Those who bear the cost of weather, fuel and danger are often not those who receive the profit.

The moral dimension of work, the dignity of production, the connection between human effort and material result, is replaced by abstract ownership. The investor’s ledger replaces the fisherman’s logbook. In that transformation, both morality and meaning are diluted.

Mises understood that when property rights become detached from productive use, they cease to serve their moral purpose. They no longer reflect stewardship, only entitlement.

Intervention Begets Intervention

As ITQ markets mature, new distortions arise: speculation, leasing and barriers to entry for young fishers. Governments respond with further policy, such as subsidies for regional participation, buy-back schemes and market access programs. Each attempt to correct the imbalance adds a new layer of regulation, reinforcing the very system that caused it.

This is the feedback loop Mises warned of. Intervention to fix one problem creates another, demanding more intervention still. What began as an effort to protect the sea now sustains an industry of compliance, auditing and policy churn.

The Return to Principle

Mises would not have been surprised by this outcome. He argued that the more an economy moves from voluntary cooperation to administered allocation, the more it loses its adaptive capacity. Real sustainability, whether economic or ecological, cannot be engineered from above. It emerges from local knowledge, freedom of action and moral responsibility.

The lesson of ITQs, viewed through the Austrian lens, is not that markets should be left wild, but that systems work best when those who bear the consequences of their actions also hold the rights to act. A policy that separates the two may achieve temporary order, but only at the cost of vitality.

The Final Current

The ocean, like the market, resists perfect control. It rewards adaptability and punishes rigidity. When policy seeks to eliminate uncertainty, it often eliminates participation. When it transforms responsibility into entitlement, it drains both morality and meaning from work.

Mises might remind us that the health of an economy, like the health of an ecosystem, depends on the freedom of its smallest parts, the individuals who learn, risk and adapt. In the end, sustainability is not a formula or a quota. It is a consequence of liberty understood as responsibility.

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