20 Jun 2008

Evil Market Forces

I suggested that market forces could help resolve conflicting claims among urban, agricultural and environmental interests to an enviro person. This is their response:
Using market forces, transfers, means to me privatizing it. According to the public trust doctrine, water belongs to everyone and it is the duty of the state to allocate it to benefit the public. The giant agribusiness interests in the San Joaquin Valley have been working hard for many years to blur the ownership rights in order to market their water to the cities, at enormous profit. It is easier and more profitable to market their water than to grow crops. Water has belonged to us all. Historically we have not paid for water, but for the facilities, O & M, needed to get it to us. Big Ag wants to change all the rules and have persuaded some, even in the environmental community, that transfers and market forces should rule.
So, no, they are not interested in using market forces since it's not right to charge for it.

NB: In this post I defend the allocation of some free water. I'm not being inconsistent. I think that everyone has a right to some free water, but the rest (marginal water) should be allocated by market forces.

Bottom Line: This perspective is hopeless. Whenever the supply of something is less than the demand for that thing (land, bananas, BMWs, blood, etc.), the price of that thing will rise -- one way or another -- until demand and supply are equal. Those who want to avoid market forces will pay the price in waiting, lawsuits, fighting, bribes, etc.


  1. Um, your enviro friend has the law wrong. Yes, some people believe stupid things. This is true of both conservatives and liberals. And as you are well aware, anecdote is rarely the singular of data. Lots of environmentalists know water law and economics extremely well.

    Also, the fact that she doesn't understand the public trust doctrine is irrelevant to the issue of Westlands Water District trying to get a really corrupt sweetheart deal out of Congress.

  2. "And as you are well aware, anecdote is rarely the singular of data. Lots of environmentalists know water law and economics extremely well."

    I completely agree, and I did not mean to imply that this opinion belongs to others (let's hope not!). The "local" problem for me was that this enviro was interested in working with me on enviro problems -- until hearing that I was a heretic.


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