International Journal on Criminology Volume 6, Number 2, Winter 2018/Spring 2019 | Page 65

International Journal on Criminology
Overcapacity is an Unregulated Capitalistic Surge
Quite clearly, when we are talking about overcapacity we are talking about
overinvestment and therefore investment decisions. If we suppose that
overcapacity is not in itself the result of a criminal choice, it is nonetheless
the result of a bad collective choice. Investors who are out of sync with the requirements
of the market bring about two extreme situations. First, there is an involuntary
accumulation of bad individual choices: investors do not receive the right
messages, they are not in a position to interpret them well, or they simply show no
interest in them. Second, there is a sum of deliberate individual choices that are
either considered not to have an impact in the medium term (a situation seen as
transitory with the possibility of a subsequent return to normal), or because they
result in hope for individual gain in opportunity over the short term (game theory).
Lastly, intermediate situations that mix these two possibilities exist between
these two extremes.
In what cases could it be said that investors are unknowingly out of sync
with market signals?
Two situations in the maritime context correspond to an involuntary bad
choice made by the group. The first is when the signals followed do not account
for the reality of the problem. In particular, this happens when the problem is a
long-term one but decisions are made based on short-term indices (for example,
variations in freight rates, 1 fuel costs, or the very volatile values of speculative cargo).
In the maritime context, this happens with shipping as well as unmanaged
fishing. The slowing of freight profitability and the indicators of overfishing are not
perceived, and people get excited about the slightest improvement in prices without
having a clear view of the specific market as a whole. This excitement triggers
investment, which has a long life span.
The second situation is when signs of profitability are garbled by economic
aid mechanisms that are disconnected from the management of overcapacity. For
example, investment subsidies for fishing activities that do not take into account
the state of fish stock use, or a naval construction market stimulated by aid for
shipbuilding yards or by overabundant public military orders.
In what cases do investors make a deliberate choice to invest knowing that
there is a collective situation of overcapacity? There are three cases in which this
happens.
The first is when the economic segments concerned are highly concentrated,
in an oligopolistic or even monopolistic situation. In this case, it is a situation
with phases of strong confrontation between the poles. They pass through
the search for profit by means of restructuring or reorganization, in particular
1 Freight rates are the fees charged for transported loads, in other words the price of maritime shipping
services.
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