Abstract

A widely recognized article by Smith suggests that harvesting leading to species extinction may be socially optimal, provided that the species growth-potential is sufficiently low. lt is shown that this conclusion hinges on special assumptions about harvest technology which, despite a superficial compatibility with neoclassical production theory, contradict a basic postulate of a pioneering article by Gordon. As soon as Gordon's postulate is taken into account, while all other aspects of Smith's model are maintained, it turns out that even a species with a very low growth potential should not become extinct.