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The market is the only mechanism that can allocate scarce resources equitably. And the only alternative is politics. In California, those with influence have

The market is the only mechanism that can allocate scarce resources equitably. And the only alternative is politics. In California, those with influence have secured water for agriculture at below market rates, water delivered with infrastructure built by taxpayer dollars. When people can get a resource for less than the cost of delivering it, they use it with less discretion. And the prices of the things they produce with it don't reflect the true value of the water, even if they did pay for all costs of delivery. That's because water has value itself. Its not just the cost of delivering it that matters. But when a resource is allocated with a political process, the only costs that are considered are the costs of delivery. Assuming the taxpayer's interests are represented at all. The political process is notoriously shortsighted. But if someone owns a resource, they have an interest in preserving it. Its sale price represents the total future value of it, not just what can be extracted during a politicians term of office. Private ownership is not the cause of all of the political wars over water. It is their solution.

route66 16y ago
> Private ownership is not the cause of all of the political wars over water. It is their solution. Is as untrue as it can be. Currently water conflicts emerge around the situation that there where no (or only a traditional) market exists, a market for multinationals is created forcibly . IMF and World Bank connect loan conditions directly to water exploitation rights in developing countries. This looks very much like interventionism to me: creating a "market" and installing it's major players at the same time. I can't see the "invisible hand" here ...
tbrownaw 16y ago
> The market is the only mechanism that can allocate scarce resources equitably. The market allocates according to ability/willingness to pay. This is perfectly fine in general, but doesn't work so well when "ability" enters the picture for something considered a necessity.
- stretchwithme 16y ago
  That's true of everything. I'd much rather pay for what I need from a competitive marketplace that is constantly driving down the cost of everything than leave it up to monopolistic government to hand out the privilege of drinking water. The market works damn well for the vast majority of things with which government has not blessed with its involvement. Water is no different than most things. In fact, it falls out of the sky in a lot of places. Places where its difficult to obtain water usually have plenty of government managing the privileges. The free market is people peacefully trading with each other. Most government is coercion. I don't see how more of it is a solution.
  - Someone 16y ago
    "water is no different than most things" is precisely what this article (and the UN; the right to water and sanitation was added to the human rights awhile ago) disagrees with. Would you apply the same logic to oxygen instead of water? Even accepting that water is no different than say cars, I disagree with the peacefulness of the free market. The free market is all about competition. In this case, competition drives the groundwater table down fast (a couple of meters a year, in some places), and forces everybody to play the game of drilling ever deeper holes.
    - stretchwithme 16y ago
      I meant with regard to the fact that ability to pay determines whether you can buy something. Obviously everyone needs water to live, just as they need food, housing, transportation, recreation, sex and many other things to live which require you have something to trade. Can you tell me a place where the free market rules where can't get the clean water you need to live for far less than an hour's worth of labor at the lowest paid job? I can think of plenty where the use of force rules where its not even possible to get any clean water at all. The UN's problem is hardly with countries where people are allowed to trade and keep what they earn.
      - prodigal_erik 16y ago
lurchpop 16y ago
Not entirely true if you're talking about a poor area whose market can't bear a price which makes supplying them profitable. The article also mentions that conservation is forced disproportionately on the poor given the examples of Cal in the 80s.
- stretchwithme 16y ago
  forced by who? nature? it is not the well off that created conditions of scarcity. They've only figured out ways of remedying scarcity by innovating and trading. Sure, the are many instances where people have been dispossessed of their land or resources. But this is hardly the free market. It is the ultimate expression of the idea that might makes right and that who gets what should be determined politically.
  - lzw 16y ago
    Another, good useful response modded down to being below zero because it isn't politically correct.
jacquesm 16y ago
> Private ownership is not the cause of all of the political wars over water. It is their solution. That bullshit gets trotted out with some regularity but it is clearly nonsense. Have a read here and draw your own conclusions: http://en.wikipedia.org/wiki/2000_Cochabamba_protests http://en.wikipedia.org/wiki/2000_Cochabamba_protests If someone owns a resource they have an interest in extracting maximum value out of it, not in preserving it. I've seen the case made for private ownership of air and water and I think it is utter rubbish. What we need instead is good stewardship of our natural resources, a way to extract tax on the depletion of natural resources instead of on production of value.
- mmaro 16y ago
  If you're trying to extract the maximum value out of a resource you own, why would you not preserve it?
  - ovi256 16y ago
    ITT: people who do not understand the tragedy of the commons.
    - jacquesm 16y ago
      Privatization usually does not translate in to 'the people that use the resource will own it', it usually translates in to 'big-corp' in 'some other country' now owns a resource you depend on and will make you pay through the nose for it. If the situation were such that each of us gets to be responsible for their little chunk of the planet then I wouldn't have a problem with it, in practice that is not how it works. Hence overfishing and all kinds of other issues that could have been avoided. One of the major problems seems to be that there simply are too many of us, that's a very harsh thing to say according to plenty of folks but it may very well be that the only real long term solution leading to better stewardship of the environment is to reduce the number of people that consume resources. Not a very popular point of view, that's for sure.
      - 16y ago
papaf 16y ago
The market is the only mechanism that can allocate scarce resources equitably. The article is surprisingly good and mentions that the economic argument is not so clear cut because the demand is inelastic. People still need to drink whatever the price. But if someone owns a resource, they have an interest in preserving it. There is also anecdotal evidence given in the article that this doesn't automatically happen. Privatised water utilities have cut down on staff and maintenance in order to maximise profit (since maximising profit is their reason for existing).

route66 16y ago

> Private ownership is not the cause of all of the political wars over water. It is their solution. Is as untrue as it can be. Currently water conflicts emerge around the situation that there where no (or only a traditional) market exists, a market for multinationals is created forcibly . IMF and World Bank connect loan conditions directly to water exploitation rights in developing countries. This looks very much like interventionism to me: creating a "market" and installing it's major players at the same time. I can't see the "invisible hand" here ...

tbrownaw 16y ago

> The market is the only mechanism that can allocate scarce resources equitably. The market allocates according to ability/willingness to pay. This is perfectly fine in general, but doesn't work so well when "ability" enters the picture for something considered a necessity.

stretchwithme 16y ago
That's true of everything. I'd much rather pay for what I need from a competitive marketplace that is constantly driving down the cost of everything than leave it up to monopolistic government to hand out the privilege of drinking water. The market works damn well for the vast majority of things with which government has not blessed with its involvement. Water is no different than most things. In fact, it falls out of the sky in a lot of places. Places where its difficult to obtain water usually have plenty of government managing the privileges. The free market is people peacefully trading with each other. Most government is coercion. I don't see how more of it is a solution.
- Someone 16y ago
  "water is no different than most things" is precisely what this article (and the UN; the right to water and sanitation was added to the human rights awhile ago) disagrees with. Would you apply the same logic to oxygen instead of water? Even accepting that water is no different than say cars, I disagree with the peacefulness of the free market. The free market is all about competition. In this case, competition drives the groundwater table down fast (a couple of meters a year, in some places), and forces everybody to play the game of drilling ever deeper holes.
  - stretchwithme 16y ago
    I meant with regard to the fact that ability to pay determines whether you can buy something. Obviously everyone needs water to live, just as they need food, housing, transportation, recreation, sex and many other things to live which require you have something to trade. Can you tell me a place where the free market rules where can't get the clean water you need to live for far less than an hour's worth of labor at the lowest paid job? I can think of plenty where the use of force rules where its not even possible to get any clean water at all. The UN's problem is hardly with countries where people are allowed to trade and keep what they earn.
    - prodigal_erik 16y ago

lurchpop 16y ago

Not entirely true if you're talking about a poor area whose market can't bear a price which makes supplying them profitable. The article also mentions that conservation is forced disproportionately on the poor given the examples of Cal in the 80s.

stretchwithme 16y ago
forced by who? nature? it is not the well off that created conditions of scarcity. They've only figured out ways of remedying scarcity by innovating and trading. Sure, the are many instances where people have been dispossessed of their land or resources. But this is hardly the free market. It is the ultimate expression of the idea that might makes right and that who gets what should be determined politically.
- lzw 16y ago
  Another, good useful response modded down to being below zero because it isn't politically correct.

jacquesm 16y ago

> Private ownership is not the cause of all of the political wars over water. It is their solution. That bullshit gets trotted out with some regularity but it is clearly nonsense. Have a read here and draw your own conclusions: http://en.wikipedia.org/wiki/2000_Cochabamba_protests http://en.wikipedia.org/wiki/2000_Cochabamba_protests If someone owns a resource they have an interest in extracting maximum value out of it, not in preserving it. I've seen the case made for private ownership of air and water and I think it is utter rubbish. What we need instead is good stewardship of our natural resources, a way to extract tax on the depletion of natural resources instead of on production of value.

mmaro 16y ago
If you're trying to extract the maximum value out of a resource you own, why would you not preserve it?
- ovi256 16y ago
  ITT: people who do not understand the tragedy of the commons.
  - jacquesm 16y ago
    Privatization usually does not translate in to 'the people that use the resource will own it', it usually translates in to 'big-corp' in 'some other country' now owns a resource you depend on and will make you pay through the nose for it. If the situation were such that each of us gets to be responsible for their little chunk of the planet then I wouldn't have a problem with it, in practice that is not how it works. Hence overfishing and all kinds of other issues that could have been avoided. One of the major problems seems to be that there simply are too many of us, that's a very harsh thing to say according to plenty of folks but it may very well be that the only real long term solution leading to better stewardship of the environment is to reduce the number of people that consume resources. Not a very popular point of view, that's for sure.
    - 16y ago

papaf 16y ago

The market is the only mechanism that can allocate scarce resources equitably. The article is surprisingly good and mentions that the economic argument is not so clear cut because the demand is inelastic. People still need to drink whatever the price. But if someone owns a resource, they have an interest in preserving it. There is also anecdotal evidence given in the article that this doesn't automatically happen. Privatised water utilities have cut down on staff and maintenance in order to maximise profit (since maximising profit is their reason for existing).