INSTITUTIONS EVOLVE TO REDUCE TRANSACTION COSTS. Gallowglass detects a fallacy of insufficient alternatives in a David Frum (scrolling, scrolling, scrolling) proposal to establish property rights in endangered species. The main point is this: "[P]roblems such as overfishing aren't solved by privatization or centralization. Instead, they're best addressed by 'polycentric' governance systems, in which central authorities provide broad enforcement, but let local communities set their own rules as much as possible. For example, problems of overfishing of lobsters along the Maine coast have been solved by local 'gangs' of lobster fishermen that informally regulate certain parts of the coast, working in conjunction with the state government. This approach allows local users to use their specific knowledge to maintain resources while excluding free riders." (Captain Linda Greenlaw provides some local knowledge in The Lobster Chronicles.) Sounds like simple rules for a complex world to me. No one size fits all, with some sort of enforcement of property rights. The comments section to Professor Farrell's post are worth a look, although someone who would suggest (A) that selling the rights to hunt rare animals but would not discover (B) that it is worth breeding more rare animals to shoot rather than (C) selling all the rights is someone who could use a little more training in economics.