Leonardo’s Sailors A Review of the Economic Analysis of Wildlife Trade

Alejandro Nadal Francisco Aguyao June 2014 The Leverhulme Centre for the Study of Value

School of Environment, Education and Development The University of Manchester

As I read “Leonardo’s Sailors” I felt the beginnings of frustration and perhaps even a little despair. The arguments were disjointed and inconclusive and no matter how many times I studied the paper I couldn’t wrap my mind around what I felt was flawed reasoning. A little while later I managed to acquire a video by one of the authors, Francisco Aguayo, presenting their case (F. Aguayo, 2014) to the International Rhino Coalition’s 2014 conference on the Risks of Legal Trade in Rhino Horn.

He presented a seemingly powerful line of reasoning addressing the question of removing the ban on rhino horn trade and reverting to trading, saying he would use the test of whether a legal trade in rhino horn would make the illegal trade unprofitable and therefore reduce poaching.

He argued that their ‘extensive research’ had shown that it would be wrong to legalise trade as:

• we had too little knowledge about the market,
• the pro-trade arguments had a weak command of economic theories and only held for rigid conditions;
• the theory did not explain market dynamics.

He went on to say that there are many other safer bets rather than legalising trade. However, he only identified one such ‘safer bet’; a substitute for rhino horn. He then finished off by baldly stating that legalisation would only strengthen illegal trade.

It sounded persuasive but he hadn’t actually presented his analysis, so it was back to the 41 page working paper.

It was then that I realised that a large part of my problem with the paper was that it simply didn’t do what it promised. It sets out to review the economic analysis of wildlife trade but unfortunately ignores the relevant economic lessons of real life. It further promises to analyse both legal and illegal trade but then only dissects pro-trade articles.

The analysis looks for any small flaw or constraint with regards to legalising trade and dismisses the reasoning as worthless if they find any problem – no matter how immaterial.

I found myself asking if this is reasonable. Can all these arguments be dismissed because they do not provide a complete answer or because there is some uncertainty about the outcome under all conditions?

This is something I have come across before. “Rocket Science” is used as short hand for a difficult but precise way to calculate the trajectories of heavenly bodies and rockets. As a first year science student I was amazed to learn about the ‘3 body problem’. If there are more than 2 bodies interacting there is no easy way to predict a rocket’s or a heavenly body’s movement. However, we regularly use this imperfect frame work of Newtonian mechanics to launch satellites where there are far more bodies (think earth, moon, sun, planets, meteorites, comets etc).

Recently we achieved a close ‘fly by’ by New Horizons of Pluto (over 4 billion kilometres from earth at its nearest) and landed Rosetta on a comet hurtling along at 135 000 kilometres per hour using this flawed set of equations.

How have rocket scientists achieved this? Practitioners use the best theoretical frameworks they can find and then try these out in practice. There have been mishaps along the way but they have continued to feed their learning into the debate while their academic colleagues have argued over the more theoretical details in their rush to ‘publish or perish’.

This example from one of the most precise sciences demonstrates that even if a model is not absolutely correct in all circumstances, it can be extremely useful to predict outcomes in practice especially when used alongside practical experiments. Why can’t we do this for the horn legalisation issue?

Nadal and Aguayo conclude that “trade models using partial equilibrium have nothing to offer in … [describing] … market processes”. They might want to tell that to the rocket scientists!

The second half of the paper concludes that there is insufficient information available to take a decision to legalise trade. The authors state that data on demand in illegal markets is difficult to obtain but they still advocate doing so first.

Their suggestion might be theoretically correct, but time is a factor. If we wait for funds and then the lengthy process of data gathering, it might well be too late for the rhino. Surely the use of a controlled experiment by a strictly regulated legalised trade would be the logical way to go? It would be quicker, self-funding and would convert at least some of the value of rhino horn stockpiles into funds that could be used towards anti-poaching activities.

It is unfortunate that “Leonardo’s Sailors” doesn’t examine any anti-trade models despite undertaking to do so. This is certainly not because arguments are unavailable; Dex Kotze (Kotze, 2014) presented his anti-trade arguments to the same conference but these were not subject to any analysis at all by Aguayo.

With a real sense of disappointment I have concluded that although it seems superficially impressive, the lack of a logical flow and the disjointed arguments make “Leonardo’s Sailors” almost unreadable and of very little merit in a crucial debate. Yet this is the logic used by the anti-trade lobby to substantiate continuing with a ban which is failing to protect our rhino i.e. to ‘do more of the same’. Churchill would have had a pithy rebuke for them.

Saving our rhinos is a problem that requires our most serious contemplation. It asks us to courageously apply unbiased logical analysis, no matter how controversial, in order to apply real, lasting solutions to an increasingly urgent problem.

References:

Aguayo, F. (2014). A review of the economic literature of wildlife trade in general. Paper presented at the OSCAP Rhino Conference, South Africa. http://www.oscap.co.za/rhino-conference-2014/speakers-videos-day-2/francisco-aguayo

Aguayo, F., Nadal, Alejandro. (2014). Leonardo’s Sailors. The Study of Value. Retrieved from http://thestudyofvalue.org

Anthony, L., Spence, Graham (2012). The Last Rhino. UK: Sidgwick & Jackson.

Damania, R., Bulte, E. (2006). The economics of wildlife farming and endangered species conservation. Ecological Economics, 62, 461-472. Retrieved from www.researchgate.net/publication/222786590

Einstein, A. Quotation. BrainyQuote.com. Retrieved from www.brainyquote.com/quotes/a/alberteins 133991.html

Greenwald, G. (2009). Drug decriminalization in Portugal – Lessons for creating fair and successful drug policies.

Kotze, D. (2014). Why legalising trade in horn will hasten the demise of rhinos. Africa Geographic(22).

Thornton, M. (1991). Alcohol Prohibition was a Failure Cato Study. Cato Institute: Auburn University.