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If you own a resource, you have incentive to preserve it. Or at least you have an incentive to not sell all it off now at a cheap price. If it's the only wate
by stretchwithme 8y ago
If you own a resource, you have incentive to preserve it. Or at least you have an incentive to not sell all it off now at a cheap price. If it's the only water where you live, this is especially true.
If you are a shareholder in a corporation set up to own the resource and you want to maximize your profit, you might sell your shares rather than push the corporation to dump all the water for cash now.
A recent study found that real restate agents take longer to sell their own houses than they take to sell other people's. Why don't they sell quick so they can have more cash quick? Because they know it pays to wait.
Every resource has a current value and future value. If a resource will fall in value over time, you'd want to sell it all now. If water is scarce in an area, this is very unlikely to be true, especially if its population is increasing.
- pygy_ 8y agoStill, I can't see that working in a world where corporations have diverse sources of income, where investors are not necessarily invested in a given resource (or a given people/economic class), and where short term competitiveness is crucial for corporate survival.
- stretchwithme 8y agoA lot of people don't understand the value of having a stream of income versus a wad of money in their hands now. That's why J. G. Wentworth is in business, to profit from people who understand it. But in business and most every discussion I can recall about business models, having a reliable stream of income is valued. People buy real estate and rent it out to establish such a stream of income. And, if you are able to avoid earning all your cash now and instead earn o=it over time, you reduce and defer your taxes too.