19 March 2015

Those bastards are stealing OUR YOUR water!

I wrote that title after reading Robin Hanson's thoughtful complaint about the gaps between potential and action:
I must admit that the world shows far less interest in better designs for institutions and social mechanisms, relative to better designs for physical and software systems. Few talk about them, and even fewer business ventures pursue them.[1]


Yes in the last decade or so there has been more enthusiasm for social innovations embodied in physical and software innovations, like smart phones or block chains. But this enthusiasm seems to be mainly an accidental side effect of tech enthusiasm. For example, while many are excited by Uber achieving new value in cheaper-if-nominally-illegal cab services, most of those gains could have come decades ago from just deregulating cabs, an option in which there was little interest.[2]


I should admit that this all confirms Bryan Caplan’s claim that few people can generate much emotional enthusiasm for efficiency. Bryan says people are far more engaged by moral arguments. I’d say people are also far more engaged by following fashion and by us vs. them coalition politics.[3]
I mainly agree with Robin and offer the following comments (based on the numbers above):
  1. There's a huge difference between innovating for the common good and private profits. First because the private innovator is known to happy clients (no free riding in creation or implementation). Second because the clients cannot get the good without compensating or asking the innovator (no free riding in consumption).
    When I propose policy recommendations, they can be taken by others and used without acknowledgement. I know this, of course, and I also know that I'm standing on the many shoulders of others with these ideas, but those factors discourage people like me from coming up with ideas as well as others from implementing them, i.e., who gets credit for the benefits?

  2. This should be said much more. My "key innovation" in the water sector (rational prices and functional markets) are as painfully obvious to me as they are the poor buying water from tankers in slums and farmers trading water at canals, but politicians and managers are constantly chasing silver bullets (desalination, smart meters, rain making) that are far less efficient in costs and benefits.

  3. This is painfully true, but I think it applies more to policies and common goods than private goods. We are VERY enthusiastic about a faster smart phone while spending little time on robust, performing water networks that "belong to everyone." The most excitement you'll see around water issues are EVIL bottled water, a human RIGHT to water, or the neighbors stealing OUR water. Those issues sell papers and win elections, but they don't fix deeper problems. (They would be addressed through good regulation, governance, and property rights, respectively, but those are efficiency arguments...)
So, taking #3 as given, here's the impact version of Living with Water Scarcity:
  • Introduction: You're GOOD. Read this book to learn how BAD people waste water!
  • Chapter 1: Don't let others take YOUR water!
  • Chapter 2: Raise water prices to make EVIL water hogs pay!
  • Chapter 3: Watch utilities so they don't RIP YOU OFF!
  • Chapter 4: Reuse wastewater because your neighbors are DODGY!
  • Chapter 5: Farmers cannot HOARD water. Make them sell it!
  • Chapter 6: EVIL POLITICIANS will take YOUR water!
  • Chapter 7: Give me MY SHARE of the water!
  • Chapter 8: Don't steal MY MONEY for YOUR DAMS!
  • Chapter 9: Foreigners are EVIL (except neighbors)!
  • Chapter 10: GOD said restore environmental flows!
And now you know all you need to know about living with water scarcity.

Bottom Line: Don't let those bastards waste YOUR water! ACT!

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