Student debts out of control

This is an Australian story (for those who followed the link, believing otherwise).

Graduates from private colleges and universities are costing taxpayers more than those from public universities, and new ministers of religion present one of the greatest burdens.

The architect of HECS, Bruce Chapman, has calculated that the taxpayer subsidy to privately educated graduates who deferred payment on their courses is 18 to 28 per cent on average. It is less than 5 per cent for public university graduates paying off HECS debts.

I had a conversation along these lines a while ago, with a colleague here. His argument was that HECS was fine for Australia, because we have so few people/students. And because our education costs are low (similarly with regard to health care). In the US the system would just cost way too much money, and provide way too much of an incentive for too many students to take degrees with too little payoff (private and social) at the end.

Seems that Dave’s argument is being proved by the very country I had used to support mine.

HECS allows students to wait until they have reached an annual income of nearly $40,000 before paying off their degrees. Past and present university students owe $14 billion in HECS debt, which is underwritten by the Commonwealth government.

Professor Chapman gauged that because education loans were interest-free, the taxpayer was effectively subsidising the students, and those privately educated students who paid a premium for their courses were costing more in foregone interest than their public peers.

…

“There was never going to be a worry with the HECS system because the debts weren’t big enough and the prices weren’t high enough,” Professor Chapman said. “But once HECS went into the private sector, some of those debts are $80,000 and the interest rates start to matter very much.”

Over-fishing = migration problems (no, not of fish)

Here’s an interesting string of negative externalities:

1. Fish prices in Europe do not reflect the depletion of fishing stocks (in, say, the North Sea)
2. Fishing stocks are depleted (this is the tragedy of the commons)
3. European countries move their fishing enterprises farther afield, striking bargains with African coastal countries to (over-)fish their waters
4. Fishing stocks in African waters become depleted also
5. Illegal immigration from Africa to Europe increases

Eh? We came upon the first few of these points way back in an earlier post:

… why are we doing this? Because we like fish (genereally speaking – I like them enough to wish we didn’t eat them) and we either don’t know or don’t care about declining biodiversity. Both of the latter are true. We don’t know. Do you know what it is you’re eating at the local chippy? Or which ocean the thing actually came from?

I fancy the chances that you don’t. You don’t know whether you’re eating Cod that was accidentally scooped up by a trawler looking for Haddock (or that you have Cod because the standard fishes of the day have disappeared). You don’t know whether you’re eating fish from the territorial waters of a poor country in Africa, because your country’s waters are ‘dry’ (so to speak) and you got these fishing rights on the cheap. Too cheap for them, and too cheap for you. Why?

I say ‘too cheap’ for you (the consumer) because of the not-caring crack made above. You might care, you might not. But when you enter the supermarket, odds are you buy a fish based on the price. That’s the information given to you. None of this other stuff is provided. There’s no pseudo-Surgeon-General’s warning that Eating This Fish Might Cause Critical Loss of Biodiversity And Shorten Humanity. As consumers we typically aren’t this well informed, and we purchase according to a price that does not include the loss of biomass, the loss of biodiversity, the loss of future wellbeing and income in Angola, etc.

I’ll just use Europe as an exemplar, here – it does the most over-fishing, and is attracting the immigration, so it works well enough.

So that’s the fish – how did they grow into chickens that are now coming home to roost in the form of illegal immigrants (this is a generic term – I’m prepared to argue that there are no such thing)?

A vast flotilla of industrial trawlers from the European Union, China, Russia and elsewhere, together with an abundance of local boats, have so thoroughly scoured northwest Africa’s ocean floor that major fish populations are collapsing.

That has crippled coastal economies and added to the surge of illegal migrants who brave the high seas in wooden pirogues hoping to reach Europe. While reasons for immigration are as varied as fish species, Europe’s lure has clearly intensified as northwest Africa’s fish population has dwindled.

Last year roughly 31,000 Africans tried to reach the Canary Islands, a prime transit point to Europe, in more than 900 boats. About 6,000 died or disappeared, according to one estimate cited by the United Nations.

The region’s governments bear much of the blame for their fisheries’ decline. Many have allowed a desire for money from foreign fleets to override concern about the long-term health of their fisheries. Illegal fishermen are notoriously common; efforts to control fishing, rare.

How do we fix this? Several options. Europe is blaming Africa:

European Union officials insist that their bloc, which has negotiated fishing deals with Africa since 1979, is a scapegoat for Africa’s management failures and the misdeeds of other foreign fleets. They argue that African officials oversell fishing rights, inflate potential catches and allow pirate vessels and local boats free rein in breeding grounds.

…

harbor, for instance, remains littered with 107 wrecked fishing trawlers eight years after the European Union promised to clear them to help develop the port.

In their defense, European officials say they moved to reform their fishing agreements in 2003 to address criticism that ship operators were overfishing and were undercutting local fishermen. Fabrizio Donatella, who heads the European Union unit that negotiates fishing deals, says the new agreements are models of responsible fishing and transparency.

“One cannot say we are not fishing the surplus or that we have not respected scientific recommendations,” he said. Ultimately, African governments must protect and manage their own resources, he said.

If Europe is so enlightened, then, it would behove it (speaking planetarily) to withdraw its fleets. “Europe” can hardly call for personal responsibility by African nations when the imbalance of economic might is so great – it just doesn’t work that way. If nothing else, it – and the rest of the world: be it the EU, WTO, WHO, UN hell, NATO would be fine – should just take over the task of survey and science with regards to African coastal waters and fishing stocks. It is, after all, in our interest to start conserving this resource at some point: I don’t know of fish anywhere else nearby, apart from this small planet.

African countries, in turn, can tell everyone to piss off – but many are in such a state of under-development that this just isn’t likely. Dysfunctionally-managed, often corrupt but, at best, just trying to fight their way out of a poverty trap when every tide flows against them, they’ll take the money, however unfairly distributed the returns on African fish are.

Within Europe, the negative externalities, as per the string at the top, have reached back into our economy – not into the market causing the harm, but back into the economy causing the harm, and this is a positive thing. By being made to bear some of the burden, Europe now faces a direct incentive to stop making such a bloody mess of things out of its own gluttony.

More likely? Merely nominal changes to development aid/behaviour in Africa, and harsh anti-immigration law enforcement/detention to deal with the human consequence. That’s just the way we do things.