Government’s water shortage
Australia has more rainfall per capita than the United States. The shortage of water in Australia is caused by government, not nature.
Regardless of drought, government has for many years attempted to supply water to the entire population at below market rate. This has undervalued our water, robbed and degraded ecosystems that rely on it, and caused an unnecessary water shortage at taxpayers’ expense.
Every day millions of litres pour out of government pipelines and are wasted because government officials are paid exactly the same whether they waste it or not. They have no personal responsibility or incentive to manage in a way that is economically efficient and therefore environmentally friendly.
Most rainfall is on the coast, but most big government dams are inland.
For years government planning laws prohibited private water tanks for vast suburban areas - now government subsidises inefficient water tank makers.
Property-owners with large roofs, such as Bunnings or many others, might have collected, filtered and sold their water to others thus solving much of the problem - but they are made hindered or prevented by thousands of government regulations, laws, taxes, compulsory licenses and compulsory insurances.
Many solutions which might have solved much of the current crisis are simple and require no government action: they just require government to stop interfering.
Now the government even wants to tax farmers for the rain that falls on their own property, as if the government owns the rain and has superior wisdom about how to use it!
Government water schemes like the Snowy River or the Murrumbidgee Irrigation Scheme have subsidised environmentally damaging land use practices on a vast scale - at enormous expense to the taxpayer. Such schemes have made large areas of farmland useless through risin salt. They have caused the destruction of river systems and ecosystems, the spreading of desert, and the destruction of livelihoods and families.
Politicians love these political schemes, because they give them power and glory, and bureaucrats love them, because they give them employment and social status. But they are bad for the environment, bad for the economy as a whole, and bad for society.
In the absence of such big government schemes, the price mechanism would have given people a direct material incentive to protect and conserve water instead of to waste it. The operation of a free market in water would have required private buyers and sellers of these resources to adapt to the natural local flows of the ecosystems.
The environmental problems wrongly attributed to property rights in water are caused not by property rights in water, but by the lack of them.
Society’s consensual mechanism for sharing natural and social resources is by personal freedom and responsibility, and by profit and loss. Profit automatically informs owners which social purposes are most valued and urgent, thus allowing society’s different
environmental, economic and social values to be property represented, balanced and protected. Loss automatically takes water resources out of the hands of wasteful users, and transfers them to people who are more water-efficient and environmentally-friendly - but only if government stops confiscating water and destroying the price mechanism.
Many environmental problems are caused because government prevents society’s significant numbers of conservationists and other private buyers from simply buying the resource in question.
The many billions of dollars used by government over the years on its grandiose water schemes, if simply left unconfiscated in the hands of ordinary people, would have resulted in better outcomes.
Even from the point of view of the advocates of government control of water, the outcomes are worse than the original problems they were intended to solve.
People call for government to fix the problem. But even with the best intentions government is incapable of managing the water supply responsibly so as to balance the different environmental, economic and social purposes that society demands, compared to the free market. This is because the values and knowledge needed to best use the water are dispersed throughout the twenty million people in Australia. Even the cleverest panel of ‘experts’ can only ever have a tiny fraction of the knowledge needed. And the addition of government red tape, vested interests, and threats of fines and prisons, can only make the management of water worse, not better.
The future of our water resources and environment are too important to leave to the ‘business as usual’ of the major parties that have caused so much waste and destruction of ecological and economic values.
Water should be shared by the community on the basis of consent, freedom and responsibility, not on the basis of threats of fine or prison dictated by ‘experts’ with a vested interest in big government and big taxes.
Government command-and-control of water resources:
o devalues and wastes water
o causes a shortage of water
o subsidises waste of water by some people and robs other people and ecosystems that depend on water
o promotes penalties and fines to ration water when consent and market prices would be better
o hobbles society’s ability to consensually balance water usage among different natural and social purposes
o creates irresponsible and environmentally damaging usage patterns on a vast scale
o robs better alternative uses of the resources they would otherwise have received, and
o sets up wasteful bureaucracies which have a vested interest in continuing their existence at the expense of the rest of society, all the while externalising the blame for the environmental damage they cause.
There is no more sense in having government control of water than there would be in replacing all our different food markets, shops, take-aways, and restaurants with a big government Department of Food with a uniform menu for the whole population, dictated by politicians.
Governmental ownership and control of water should be abolished.
The result will be improved quality, quantity, diversity, and economy of water resources for all its different social purposes and values.
Excellent posting. I have recently thought that water is under priced and that farmers water subsidies are unfair and create inefficient land use by distorting the market, but I hadn’t thought about the issue in the detail this article offers. It would be great to get a posting like this into the newspapers for a different spin on the issue.
You’ve raised some intersting problems with government provision and control of the water supply. I’d be interested in which particular mechanism you would propose for preventing business interests from plundering our water reserves? Is there a role for government there at all? How do you suggest we avoid allowing the market to externalise costs to the environment? Or do we wait until water scarcity and the susequent price hikes moderate demand a little. There are certain questions of equity which you have not addressed.
Businesses plundering water? What the… ???
I’d be interested in which particular mechanism you would propose for preventing business interests from plundering our water reserves?
Price. The market would value water more greatly because it is scarce. With limited naturally utilisable sources of water, alternate sources would need to be developed. Recycled water of various grades up to potable would become profitable, desalination may come into the mix, although this would be particularly expensive. Plus, I think Justin was arguing against the concept of “our water” and turning it into individual’s water. Ownership of a resource is a powerful incentive to conserve and manage its use.
There are certain questions of equity which you have not addressed.
Like what? What do you mean by equity?
This is my example on the ‘light globes’ argument on the LDP site:
My neighbour loves his garden but we are on water restrictions. He gets his ute full of buckets and drives somewhere to fill them up legally, then drives back and dumps them on his garden. He does this about twice every Sunday. He’s clearly willing to pay extra for water so why not just charge him an appropriate rate for the water he uses rather than have him use the water anyway while generating carbon emissions with his ute?
Brendan,
Re: “Price. The market would value water more greatly because it is scarce…….Ownership of a resource is a powerful incentive to conserve and manage its use”
The market doesn’t consider diminishing natural capital in it’s value system. Ownership of forests doesn’t seem to encourage wie management and conservation. Rather it encourages cashing in by chopping it down and stripping it entirely. In a perverse way, money (investing in money markets and shares) grows faster than trees. There is little incentive to preserve that forest from a neoliberal perspective.
Re: “What do you mean by equity.”
I mean of course that completely unfettered free-market water access means poorer people can access less water. Water being one of the only true needs in life. There are instances of widespread social unrest and deprivation if one does not pursue this pathway with a great deal of caution and balance see Bechtel in Bolivia). Of course one failure does not mean that de-regulation cannot be re-visited -just that it’s not a panacea. I would agree with the posters here that personal and decentralised collection of water is to be encouraged.
I also agree with Michael is that water is under-valued. Guided markets - maybe. Unbridled free market - no thanks - but only the most enthusiastic libertarian would disagree I’m sure.
“Unbridled free market - no thanks - but only the most enthusiastic libertarian would disagree I’m sure.”
So you want the price system to sort out shortages, but you don’t want to pay market prices?
I’m happy to pay market prices if the pricing incorporates at some level harms done in reducing river flows, transporting the water, desalination (resultant CO2 emissions). To avoid this is to subsidise the cost of water by running down biodiversity and natural resources etc. So the “market prices” I’m talking about are perhaps a little different to yours. C’mon, business (and all of us) have had a pretty good run for a long time privatising the profits and socialising the costs of environmental degradation. It would appear there are a few gargantuan chickens coming home to roost.
I don’t profess to be an expert on this area by any measure, but I would imagine that there are a variety of incentives and disincentives that can “sort out shortages” - price being just one of them.
Mark there are examples in many places of market restraint that can provide benefits with safeguards. For instance, private health fund premiums have some degree of government oversight. The abstraction that we call the market can’t always be trusted, so we keep one hand on the handbrake.
The market doesn’t consider diminishing natural capital in it’s value system.
What do you mean by natural capital?
Ownership of forests doesn’t seem to encourage wie management and conservation.
This is patently wrong. Timber companies are paying non-competitive farmers all of the time to convert their farms to plantations all of the time. There are more trees today in Europe and in parts of Australia than there have been in a century. The fact that there are some parts of Australia that are denuded of trees has largely been down to previous government’s encouragement of unproductive farming through tariffs and subsidies. Queensland even used to make land clearance a requirement of holding a lease to graze cattle or sheep.
Rather it encourages cashing in by chopping it down and stripping it entirely.
And then replanting it so as to do it all again in X years time.
There is little incentive to preserve that forest from a neoliberal perspective.
In a free market, environmental groups would be able to trump “neoliberal” profit seeking with cold hard cash if they want to preserve a forest by buying it.
I mean of course that completely unfettered free-market water access means poorer people can access less water.
Whereas government controlled water means everybody has less access to water via water restrictions.
Water being one of the only true needs in life.
Yes, water is a required to sustain human life. Is clean potable water also required to keep gardens alive, clean driveways and keep cars clean? Do you have to use the same water for these competing usages? Since everyone does require clean, potable water to drink and for hygiene, the market for this would be huge, which would bring the profit seekers running and drive price down through competition.
Unbridled free market - no thanks - but only the most enthusiastic libertarian would disagree I’m sure.
The market is not unbridled, it is guided via contract and enforced by civil law. The market is self correcting, players who fail to meet market expectations are driven out of business, not supported by injections of tax.
Hear, hear, Justin - that is a top article. I second Tim’s sentiment that it would be marvellous to see such an article published in the popular press.
Good on you, Brendan and Mark, for helping to explain to Verdurous how efficent and capable the market system is when uninhibited. I will toast to your patience because I see you (and others here) go to the effort to explain mechanisms of the free market to people visiting this, and similar, forums.
I rarely comment here, though I do enjoy reading these articles.
Hey Vendurous,
The case of Bechtel was appalling but it wasn’t due to lack of regulation; quite the opposite. Banzer effectively signed over the water monopoly from the government to one corporation and enforced tight regulations (such as banning citizens from collecting rain water) in order to enforce the monopoly.
That doesn’t sound like a free market to me.
Good article. Important topic.
Even with government ownership they could do more with pricing to elliminate shortages. The current rationing approach is silly.
I’m not talking about different prices at all Verdurous.
If there is a market determined price, then no one gets a free ride. No farmer, home owner or soft drink bottler. I don’t see the connection between having market determined prices and socialised costs and privatised benefits.
There are no other ways to sort out shortages other than a price system. The only way to ration goods is by queuing or by a price mechanism. What we have now is effectively a series of queues. If you know any other way, please say so.
What are the alleged benefits of market restraint? Private health premiums are merely higher because there is no foreign competition and the subsidy is poorly designed so it is a subsidy to health insurers and not end users, who would be better off with tax cuts (as it costs more to raise revenue than to spend it, thus society would be better off). The market isn’t an abstraction. It is merely individuals coordinating resource allcoations by competition and cooperation.
Many of these points appear valid and I certainly think pricing needs to be liberalised to help allocate this precious resource. It is ridiculous that in the suburbs we pay about 100 times more than a farmer pays for water.
“I don’t see the connection between having market determined prices and socialised costs and privatised benefits”
Mark I’m referring to the situation whereby business extracts profits through extracting, processing, delivering water but externalises the costs of environmental damage and remediation to the taxpaying public generally.
“There are no other ways to sort out shortages other than a price system.”
What about behavioural change, water efficiency measures (technological or otherwise). Tax breaks for limiting use. I realise that it is not normally kocher to talk about discouraging consumption under a neoclassical model, but this will have to change. Isn’t price just one (albeit persuasive)blunt instrument.
“What are the alleged benefits of market restraint? Private health premiums are merely higher..”
And they are higher still in the US where government plays a minimal role.
I would think the benefits hopefully relate to security of infrastructure and supply, avoidance of corporte collapses, maintaining Australian control of a vital resource, and avoiding oligopolies. Our super-annuation industry is closely watched and regulated. Why not water then?
Brendan: “What do you mean by natural capital?”
See here: http://en.wikipedia.org/wiki/Natural_capital
Would anyone like to address issues of equity and fairness to low income earners?
Would anyone like to address issues of equity and fairness to low income earners?
The whole concept of ‘equity and fairness’ is a load of shit. It always comes down to reducing the opportunities of one person so someone else doesn’t feel envious about them making the most of those opportunities.
In order to guarantee everyone access to a minimal amount of water for basic living it would be best to factor a water allowance component into their welfare cheque, then let them participate in buying from the same water market as everyone else.
I find it a little laughable that anybody would suggest that anybody in Australia couldn’t afford water for life. How about this — I promise to personally buy bottles of evian for the poor sods who are about to die of dehydration in a country that has free water taps on every sports pitch.
Verdurous, two main things would stop businesses plundering the water resources.
Firstly, so far as plunder implies the use of force or threats to get control of resources, that is precisely what the abolition of government ownership and control of water would ban. Remember that, like the market, or business, government is not a ‘thing’ in itself. It is just an aspect of human action, of how people relate to each other. Take away these collective terms and all you have left is people, either getting resources by consent or by legal or illegal force and threats. The fact that the threats may be legal does not mean that they are not threats, nor will it necessarily, or even probably make them fairer or more practical. That is indeed the issue.
The situation now is that it is legal for people – by way of government - to use force and threats to get control of water resources, so, aside from the uncommon crime of stealing water, the risk of plunder is coming almost entirely from government’s involvement. Just as non-violence is, in general, ethically preferable to violence, so the market has the ethical advantage over government, that it is legally based on consent not on coercion or force.
Secondly, what would stop businesses from ‘plundering’ water resources is precisely what is not stopping government from plundering them now: the operations of profit and loss of one’s own property.
The price for a thing comes from all those people with an interest in it, in this case water, and everything that water can be used for: - which is everyone. Suppose you are a business, and you buy up an enormous volume of water. What are you going to do with it? If you let it go to waste, you will lose money. You can use it yourself, or sell it. But if you use it to grow miles of cut flowers, and the value that everyone else attaches to wheat, or drinking water, is higher than the value that everyone else attaches to cut flowers, then you will be better off selling it to them. So the water will tend to find its way into what society values relatively more, and away from what it regards as a relative waste. If you decide to ignore them, you are free to do so, but then the market will automatically act against you in their favour, because you will tend to lose money or go broke, and those who produce what society wants, will tend to make money and buy you out, thus taking control of water out of your hands. Profit is a measure of how much you are serving society’s values according to how *they* see it – not necessarily how *you* think they should live.
By contrast, government lacks this corrective mechanism and decisions can only be made on the basis of arbitrary power, such as exchange of preferences in marginal seats, back-room deals in party preselections, and appeal to people’s desire to get something for nothing. At best it can be based on mere guesswork about what ‘most people’ want, without any mechanism to test for the correctness of the guess. Once-in-three-year anonymous compulsory elections, with all the issues bundled together and no ability to distinguish them or apply them to particular circumstances, is a very attenuated and imperfect feedback mechanism. If direct purchase is not representative of what the people want, it is hard to see how political elections can be in any better position.
That is why the danger of plunder is far greater in the hands of government and the operations of legal coercion, than in the hands of the market and the operations of consent-based exchange. What plunder looks like, is what’s going on now. Banning force as a way of deciding on resource use is not only ethically better – it’s practically better too.
As to equity, this means fairness but it also implies ownership interest. Let’s get rid of the idea right from the start that deciding on the use of resources is somehow ethically better because it is based on force and threats over consent.
Water for drinking and showers is at the retail level. Of all different water uses, drinking and washing involve the best quality and the least amount of water. We live in one of the richest countries in the history of the world. The idea that there is a class of people so destitute that they are unable to afford water for drinking and washing is, in my opinion, simply mistaken. But even if there were, which there isn’t, they would form a teeny minority. Almost everyone is not in that class. There is no reason why gazillions of litres must be misdirected into governmental boondoggles and waste on a vast scale to satisfy the needs of that hypothetical class. It would be far better to simply give them the money in cash that they need to buy water, and let everyone else have the freedom and the benefits of a system that outperforms government in every way except in creating vested interests and paying for waste.
As to whether a particular use is ‘wise’: it is not given to you to decide how other people should live their lives. If you think someone else is not attaching to water the value that you think it has, then you, and everyone else who agrees with your valuation of it, must admit that you would be getting a great deal by buying it yourself. That is the solution in a free and civilised society. Those who prefer to use coercion to force other people to pay for their values presumably do it because ‘they know not what they do’, but if they do know, it is certainly not because they are morally superior or wiser.
I also note that basic food is also required for life, but (thankfully) nobody is suggesting that we nationalise and subsidise Coles. Somehow, people aren’t starving. Amazingly, they also aren’t starving in Laos.
I think this post is pretty spot on.
And a refreshing change of tone from the daily shrieks coming from the media for more government, more planning, more regulations.
We need a water plan like a hole in the head.
I don’t get it.. can’t John Howard read the Liberal party manifesto ? Its totally been trashed again and again. CF Light bulbs by 2009 ? Get out of my life !
It’s good to remind ourselves about the importance of the free market, but shouldn’t we be telling the world instead? We are already market-lovers, or we wouldn’t call ourselves Libertarians, but some of these arguments shoulds be given to the outside world, because some people might be converted to our cause. I agree that water should be ‘free’, by which I mean that the government shouldn’t monopolise it. Now how could I persuade my work-colleagues that this is preferable?
What an excellent post!!!! This is one of the reasons I prefer reading blogs than going to op-eds. Great work Humphreys.
An excellent essay by Justin Jefferson. For questions on price, see F. A. Hayek’s lecture titled “The Use of Knowledge in Society”.
This really is an exceptionally good post, as Ron says. I’m going to flag it to this week’s Missing Link editor - it deserves a wider audience.
Sorry Justin. Without looking I assumed it was John’s post. Terrific.
“Mark I’m referring to the situation whereby business extracts profits through extracting, processing, delivering water but externalises the costs of environmental damage and remediation to the taxpaying public generally.”
Huh? How can this happen? Why has pricing water got anything to do with this?
Generally it happens when there are no secure, strong private property rights, and a general policy of industry assistance. Pricing of water is only tangentially related.
How are you going to change behaviours other than changing incentives, as prices do? Technological advances are possible through a market for water not only because use has to be metered, but there is an incentive for suppliers to increase efficiency of supply (and also recycle water and tap new reserves). Tax breaks are a price mechanism, but a sloppy one. Read what Justin said. And Hayek: prices are not blunt at all, they are capsules of information regarding alternative uses. They are an elegant way of rationing preferences across several alternative uses.
“And they are higher still in the US where government plays a minimal role.
I would think the benefits hopefully relate to security of infrastructure and supply, avoidance of corporte collapses, maintaining Australian control of a vital resource, and avoiding oligopolies. Our super-annuation industry is closely watched and regulated. Why not water then?”
Sorry, but it is just garbage that public healthcare is cheaper. The average cost for care in the private system is 2 700 USD per patient. Medicare, 6 600 USD per patient. Private healthcare can be purchased more cheaply than FICA taxes which contribute to Medicare after FICA taxes are paid. Even for the elderly, but especially for those who haven’t paid enough FICA taxes, Medicare offers very little benefits for the same price compared to and in the private system. You propose we have a giant monopoly to avoid any oligopolies. Superannuation is regulated and taxed to the loss of the worker who saves a small amount each week. They can’t use it for a deposit on a new business loan and a very basic, self managed profitable investment strategy requires permission from authorities to use their own money. If these examples are why we are meant to socialise water under high shadow prices (with no incentives to increase supply or recycling measures), then the case for privatisation is very strong.
That’s a nice post but it doesn’t provide any sources. It could be made up.
Apart from that, I’d like to believe it.
Michael,
It was generous to recommend welfare credits for water for the poor. Although your statement that:
might suggest you’re not altogether sure about this approach.
John,
Maybe that’s because it’s in public hands!
Justin,
Yours was the most cogent and convincing argument. Couple of little remarks.
I’m glad we agree. Please let your colleauges understand this. Some on your side of the fence seem to think the market gets up in the morning and takes a leak. (eg. phrases like “the market has decided to punish..blah, blah”, “the market’s wisdom” etc.)
Companies use coercion and force, albeit usually through there advocates in the police and judiciary.
This is the strongest part of your argument. Feedbacks are a good way (essential way perhaps) of creating self-correcting mechanisms of supply. Although the logical extension is that we’ll use all our water for growing (say) soya in the Hunter Valley and none for anything else. There are many reasons why this might be ecologically, culturally and socially undesirable which deserve a separate post in themselves.
Another good point. Like markets, democracies aren’t perfect. This is an argument for refining democracies to reflect greater public responsiveness and participation - not for abandoning the concept.
Nicholas,
Perhaps. Or perhaps you might encounter a broader range of views from some people even cleverer and more erudite than my good self (yes there are some)…….and they might just convert you.
Mark,
Mark I had a quick look at web definitions of “monopoly” and they pretty much all referred to firms and companies - not government. There are reasons for this including accountability and inclusivity of ownership. May I take a liberty and rephrase your accusation above in another way: “You propose water be owned by all and not by just a few.”
I’m a bit tired after all that. You’ll note I haven’t put forward my ideal system or mix of public or private. That’s because I don’t have all the answers. I haven’t decided. But I do know the answer is’t as simple as telling governments to piss off. Cheers lads.
Verdurous- i listen and read contra-libertarian arguments all the time, but I have still not been convinced by them. In fact, the best joke I heard recently was ‘Save water- take the piss out of a greenie!’
Oh, sorry! Your name means ‘green’, doesn’t it? Well, your nickname does. Whilst I don’t have all the answers, either, I still think that a government monopoly is a bad way to run anything. Just looking through history shows me that!
might suggest you’re not altogether sure about this approach.
No banana, Verd boy. I’m completely sure about everything I said. I didn’t ‘recommend welfare credits for water for the poor’. I said we should give them the cold hard cash to participate in the water market for themselves. If they decide to spend the filthy lucre elsewhere then that’s their business.
And none of this detracts from “The whole concept of ‘equity and fairness’ is a load of shit.” This implies that everyone should have the same access to water regardless of whether they are willing to pay for it. No dice, Verdster, that’s not what welfare is about. It’s about ensuring that everyone has the ability to participate in the water market to some minimal level to ensure a basic quality of life. While I’m happy to accept this level of government intervention in the name the benevolent society, John has correctly pointed out that it’s hardly necessary.
Justin
what if, instead of choosing to grow cut flowers and sell them to fellow Australians, you choose to process Aluminium and sell it to the Chinese? They might value the Aluminium much more highly than Australians would, since they have a scarcity of it, and the main drag on your ability to make a huge profit might be water supply. So how can Australians force you to release some of the water to them if it is more profitable for you to export it to China (through the mechanism of aluminium smelting, Uranium refining, or cotton growing)?
And what if a smelting company buys the water supply company, in your hyperrational world without monopoly controls? It could then a) preferentially supply itself and b) run down the purification aspect of the supply company`s business, since it isn`t interested in supplying pure water to the Aluminium smelter.
Also people cannot recycle the water, since they don`t own the rights to it. In theory the company would be able to just dump that water wherever htey like and take out legal protection against any of the locals recycling it, thus forcing the locals to buy water at the inflated prices offered by the smelting company.
Imagine this in a remote town like Roxby Downs, Goulburn even. The town would be completely dependent upon teh aluminium smelter for water, and would have to tolerate whatever costs and concessions it forced on them.
John Humphreys, your argument that we shouldn`t privatise Coles is an argument by analogy. Sadly, water is not analogous to food, because
a) we cannot set aside a small proportion of our water every year and use it to replenish the supply the following year (as with, say, crops)
b) if we have a bad year we cannot ship in a small portion of seed material with which to regrow the water we had, thus ensuring that the environment and or the industry remains viable
c) we cannot invest capital in existing stocks of water to make them larger (analogously to fertilisers); all we can do is invest capital to stop them diminishing
d) water is a raw material for food, not the other way around; so Coles also relies on water supplies (which actually makes them more important than food)
e) water is not a diverse class of substances which we can choose between in a way which best suits our land, so that we harvest one type of water in the far west and another in the city; it is all the same thing
f) water harvesting activities in one area can affect water harvesting activities many thousands of miles away through a mechanism known as “rivers”, which does not have an equivalent in the case of food
g) viable food technology has been understood for 1000 years, and safe water technology for 100 years - i.e. it is not yet a mature technology
Arguments from analogy are weak simply because one merely needs to show any way in which the analogy fails in order to show that the argument may not be correct. This is a general principle you need to consider when comparing essential infrastructure services to the market for music videos or some other facile consumer product (a regular method of argument on this site); or when, for example, producing such gems of thought as “speed is not dangerous; why, racing car drivers can drive very fast and they do not have accidents” [1]
[1] LDP policy on Traffic Laws
This is complete rubbish, Flash. You are clutching at straws in a vain effort to prove that something is too essential to let the dirty, filthy, evil market deal with it, and simply must have the governmet pass lots and lots of laws to regulate it. Unfortunately for you, Flash, the market is also capable of providing the really essential things we all need.
a) we cannot set aside a small proportion of our water every year and use it to replenish the supply the following year (as with, say, crops)
Complete and utter rubbish. We store water all the time for later use and you know it. Sure, some crops can’t be easily irrigated by stored water, like wheat. But some foods/crops can’t be stored either. So what?
b) if we have a bad year we cannot ship in a small portion of seed material with which to regrow the water we had, thus ensuring that the environment and or the industry remains viable
If we need more stored water to ensure the next year is not as bad, then we can build the means to do this. We can desalinate or recycle used water to create more usable water.
c) we cannot invest capital in existing stocks of water to make them larger (analogously to fertilisers); all we can do is invest capital to stop them diminishing
Is this a joke? We can invest in more infrastructure to store or produce water.
d) water is a raw material for food, not the other way around; so Coles also relies on water supplies (which actually makes them more important than food)
I agree water is slightly more important than food in some ways. So what? The analogy was about providing the essentials for the poor. Water and food are pretty much analgous in terms of being essential for the poor (or anyone).
etc etc etc
Arguments from analogy are weak simply because one merely needs to show any way in which the analogy fails in order to show that the argument may not be correct.
Sure. But the analogy was about providing the essentials for the poor. Water and food are pretty much analgous in terms of being essential for the poor (or anyone).
This is a general principle you need to consider when comparing essential infrastructure services to the market for music videos or some other facile consumer product (a regular method of argument on this site)
I would consider the essential infrastructure service of the water supply to slightly less analgous to music videos than to food when discussing things that are essential to the poor. You know that’s not what was said or implied so don’t pretend.
Seriously, Flash, your argument is hopeless. I’m sure even you can do better than this.
Re: flash_heart’s entry:
Woohoo, the cavalry arrive! Thank goodness. I was just starting to think maybe I was hanging out in the wrong part of town. But be careful Flash, some of them are starting to get a bit rude (and they’re teasing greenies !) [cue violins and sound of tears].
Companies use coercion and force, albeit usually through there advocates in the police and judiciary.
Verdurous,
The only use companies have for the courts is contract enforcement. If you agree to provide a good or service, and fail to provide that, you have broken your contract. This is a serious issue in a society based on voluntary exchange where we need to put trust in people we do not know and will never meet. Fortunately, the majority of people understand that honesty is the best policy, and contract disputes are minimal. Only very rarely do firms take individuals to court, most of the time they are suing each other or being taken to court by groups of concerned citizens.
If you want to convince me that private firms use coercion and force, you’ll have to state some examples. The most a firm can do is exert influence over you, you still make the choice to accept their goods or services, even a non-decision is a choice since you had the option of making a conscious choice.
Sometimes it may seem that we have no choice, such as whether to accept a telephone service, or water supply, or public transport system, but we at no time have to use these services, so accepting them is still a choice. And often the fact that we have a choice of use a single provider or to do without is down to government legislation or from historical state intervention that created the monopoly situation in the first place.
Utilities may seem like natural monopolies due to the inefficiency of providing parallel infrastructure, and this is partially true. But that is still not a reason for excluding competitive markets to build, own and manage that infrastructure. If different companies runs the water supply in different areas, you have the choice to relocate to the area that has the better supply. Even if you decide not to move, because perhaps the area you live in has good schools or some other criteria you value, you are balancing competing choices against your personal preferences. Again this may seem like a no option scenario, but nobody is forcing you stay in an area with bad services, you are free to move if it is important enough to you. Importantly, if the state runs all the water and all the schools, then you really have no choice at all.
This is the strongest part of your argument. Feedbacks are a good way (essential way perhaps) of creating self-correcting mechanisms of supply. Although the logical extension is that we’ll use all our water for growing (say) soya in the Hunter Valley and none for anything else.
That isn’t the logical extension. Any resource with competiting utility will find that no one group will be able to monopolise access to that resource in a freely competitive market. If water in the Hunter Valley was monopolised for soya production, then presumably there would be an abundance of soya to the exclusion of other crops. If soya is not scarce, then its price will most likely be low. Other crops’ prices, because they are scarce through lack of water, will be high. The high price of the alternative crops will mean that it will be profitable for someone to out bid the soya growers for access to water. If the price of water then gets high enough, new supplies of water will be developed, driving the price down through competition. Free markets will lead to more efficient allocation of resources than central planning, which is what state monopoly is.
Brendan:
“If you want to convince me that private firms use coercion and force, you’ll have to state some examples”
Gunns Ltd. (see Gunns 20 case in Tasmania). Many would suggest that attempts to suppress free speech is coercive. I’ll get back to you on “force”.
“That isn’t the logical extension.”
True, I humbly retract that point. Perhaps it is comparative advantage and free trade that promotes hyperspecialisation, rather than the action of efficiency/resource allocation through markets alone.
Gunns Ltd. (see Gunns 20 case in Tasmania). Many would suggest that attempts to suppress free speech is coercive. I’ll get back to you on “force”.
A link or summary would be appreciated.
Many would suggest that attempts to suppress free speech is coercive.
We’ve had a conversation along these lines here, and I am in agreement with John Humphries assertion that free speech is inalienable, so long as you are using your own private property (or legally using someone else’s). So I agree, Gunns Ltd should not be able to sue for loss of reputation. A stronger constitution guaranteeing free speech would prevent such action.
Trying to find anything other than partisan piffle (from either side) on this is a real struggle. It appears that Gunns attempted to sue 20 Greens (some of them quite prominent) from different environmental bodies for fairly unspecific damages. The wind was taken out of their sales rather as corporate defamation has now been scrapped (part of the new national defamation laws). Gunns claim has been struck out three times now for failure to disclose a proper cause of action, and they have dropped the allegations against five of the original twenty - so, in effect, it’s now the ‘Gunns 15′.
Some of the claims - trespass during the course of protests that stopped work on Gunns’ sites from proceeding - are quite specific and would sound in damages, albeit small. Gunns probably want injunctions, however, but as one of the defendants is the Wilderness Society (a registered charity) getting injunctions is going to mighty difficult. (In a nutshell, charitable bodies that engage in political campaigns are allowed to do so as long as the politics is ‘incidental’ to their core charitable purpose, and as long as they don’t break the law while doing so).
So far Gunns keep having costs awarded against them, so if the Greenies play their cards right it could be quite a useful little earner. To be frank, I can’t see how Gunns can get anywhere with this case now that corporate defamation has gone down the long slide. They would need to catch the Greenies lying about them for profit, which would then enliven s 52 TPA.
The shorter me: not coercive, just a big, clumsy, quasi-monopoly trying it on legally. If the Greenies sit tight and stop crapping on about losing their freedom of speech, they’ll do quite well out of it.
Flash_heart
‘They [the Chinese] might value the Aluminium much more highly than the Australians would, so…’
Surely the question would be whether the Chinese would value the aluminium, cotton etc. much more highly than the Australians would value the water? So, even taking that extreme hypothesis at its full value, I don’t see it as presenting much objection to abolishing governmental ownership and control of water.
Again, if a smelting company bought up the water supply company so as to preferentially supply itself, it would only make economic sense if the value that their customers attached to the smelted products were higher than the value their water customers attached to water, which seems highly unlikely. Similarly with running down the purification part of the water business.
‘In theory the company would be able to just dump the water wherever they like…’
They couldn’t dump it on someone else’s property.
‘…and take out legal protection against any of the local recycling it…’
That’s no different to the situation now. I can’t come onto your property and ‘recycle’ your car, or your water, that you haven’t finished using yet. I might think you don’t want to use your water. You might think you do. The one who paid for it and owns it gets to decide, not the ones who didn’t and don’t.
‘thus forcing the locals to buy…’
No. Just as now, so it would continue to be illegal to force the locals to buy anything. They would remain free to choose whether or not to buy it.
‘water at the inflated prices offered by the smelting company.’
This presupposes that you have privileged knowledge of what the right or just price would be. You don’t. According to your logic, not only all water, but all cars and all property should be owned by government, because otherwise, those dastardly owners might sell it to people at an ‘inflated’ price. But actually, it’s the other way around. The prices always tend to be higher and the service worse when government takes over any given area, because there is no reason why they shouldn’t be.
A friend of mine works in the remote Northern Territory. Some of the stations charge their own employees for accommodation. Some of the shops and petrol stations charge a lot for food and petrol. Those who want to buy things always think the price should be lower. Those who won’t accept the prices should, and do, go elsewhere. So what? Why shouldn’t they? People don’t have a right to use other people’s property for no other reason than that they want to use it, and feel entitled to it. People’s property is the fruit of their labour. ‘Other people are not your property’.
I don’t think you have made out an argument that the making of decisions about the use of water by the processes of personal freedom and responsibility, and profit and loss, are fatally or necessarily defective, even on your own terms.
But even if you had, which is not conceded, that would not amount to a justification for the use of threats of force to try to fix it up.
I have answered your questions on your own terms, so kindly answer mine on mine.
If the original problem is that people are not smart enough to choose for themselves what voluntary transactions to enter into, where they have direct input and direct exposure to the benefits or downside, then how can the same people be smart enough to choose officials over and above them to restrict their freedom to choose, where the process does not allow the many different policies on to be distinguished from each other, and there is no direct connection for the individual between costs and benefits?
Nice post, but I am interested in the specifics.
“Governmental ownership and control of water should be abolished.”
How would this be achieved? The ownership and control is horribly convoluted at the moment. How would government be extracted from it while maintaining supply?
Fatfingers,
A good question. Taking an urban focus for the moment you could start improving things with the following mostly independent initatives:-
1. Whilst retaining government ownership of urban water supplies adjust the price twice a year to accomodate the prevailing consumption rate and the duration of current reserves remaining. So for instance you can set the price lower such that demand outstrips new rainfall when the dams are 90% full but when they are only 10% full the price should cause demand to fall such that it matches the level of rainfall being captured. Higher prices and price uncertainty would make raintanks a more interesting economic decision.
2. Declare the pipes in the same way that Telstra copper got declared before full privatisation and allow new private sector water suppliers to compete with the existing government owned dams.
3. Privatise the dams.
4. Privatise the pipes so that somebody has a profit incentive to fix the leaks. Even with a regulated access price their would still be an incentive to cut the costs (ie leaks).
5. Get the government out of the equation entirely.
Regards,
Terje.
Thanks, Terje.
Anyone else?
Privatise and deregulate.
Unfortunately there is a discovery process to be had in privitisation of utilities, and social equity caveats (price restrictions, service guarantees etc.) only complicate things further. Better to hand every Australian shares in utilities as they stand and let the market sort it out without any further state interference. Let the privatised utilities inherit the debt as well associated with infrastructure investment. If this debt is unservicable at current revenue levels, let the new utility deal with through price rises and asset sell offs.
It might be messy for a while, but people will find a way to pay for the water they need.
Hey. Flash-heart and Verdurous,
Here is one point that you might think about. Our arguments are very similar, except that Libertarians are more sceptical than nonlibertarians. You are sceptical of businesses and their attitude to customers. We extent the scepticism to include Governments, which we think of as a ‘business’ with enforcement as its’ main product. I agree with you on one point- we should all look at businesses, including governments, with a jaundiced eye and a doubting attitude. We just prefer to think that governments should be our absolutely last resort, not the first.
“Mark I had a quick look at web definitions of “monopoly” and they pretty much all referred to firms and companies - not government. There are reasons for this including accountability and inclusivity of ownership. May I take a liberty and rephrase your accusation above in another way: “You propose water be owned by all and not by just a few.”
Verdurous, Government ownership is monopoly. It acts like a monopoly.
Gifting people equal allotments transferable ownership of public assets is ownership by all.
If the ABC etc was about “the people”, they would be able to buy and sell it as they wish.
Michael Sutcliffe
can you please explain to me how
a) we set aside a small proportion of our water reserves to replenish our supplies (like crops). Is there some way in which water breeds with itself of which I am unaware? Do bees come along and fertilise the water from other water sources, thus ensuring the spread of the source? Do we see Sydney Water driving about in trucks, laying water seeds with which to grow the next dam? I must confess, I was unaware of these aspects of water supply technology
b) we can ship in a small portion of seed water to regrow the water we had during a drought? Do we buy this seed water from Monsanto, and sow it in the dams to regrow? Do we develop new strains of seed water at CSIRO, which breed more efficiently and are immune to pesticides? Do farmers routinely buy in seed water after a drought and rebuild the rivers on their property by planting it and waiting a year?
c) we can invest in infrastructure to store or produce (your words) water? I didn`t know we could produce water. Does it come in dehydrated packets… just add water to get instant… water? Maybe there is some kind of super water which, when exposed to air, produces more water? Or do we make it in a factory? All the libertarians line up at one end and breathe hot air and bullshit into the factory windows, and a special machine produces water from it? I must confess, I thought all water was already free standing in some form, and we simply harvested it … but there you go, I must have misunderstood. Maybe I confused water with manufactured goods?
So you see Michael, the analogy works if you compare the fact that water and food are essential items for poor people - just like air and sex. But it doesn`t work if you consider how completely different water and food actually are. I know, here`s an analogy - food and air are essential items, so we should assign ownership of air to individuals, and allow them to trade it.
Doesn`t work does it? But they`re both essential, like you said about water and air. Oh, but the analogy breaks down somewhere else.
Verdurous, I wouldn`t bother getting too heated up about these guys being rude. The record of their response to global warming suggests that libertarians in general are incapable of having a polite discussion and are quite happy to resort to gutter tactics if they think it will help them stave off the march of rationalism through society. Sadly one cannot respond in kind, or they get all hoity toity about being uncivil.
I think you`ll find a discussion of corporate power to coerce individuals is like pissing in the wind around here. They don`t understand the difference between coercion and violence, so they can`t understand why some people don`t trust large corporations. That`s why they always downplay corporate coercion with the word “influence”, and exaggerate government coercion with the word “violence”. Semantic cowboys.
I haven’t noticed anyone being rude, fh. You must be reading a different thread from me.
Desalination allows you to “produce” a near endless supply of “fresh water”. Of course there are costs involved (as with food production). The analogy with food works well enough. As with food it is more likely that waste will occur if water is underpriced.
The reason that air is not owned and traded is because it is not scarce. Likewise sea water is not scarce if you live near the sea. And sunlight is not scarce when it is day time. Economics deals with scarcity. If it ain’t scarce then applying economic analysis or economic policy or assigning property rights is pointless.
JustinJefferson
this is what I meant. The profit from a unit of water for the aluminium smelter is much greater if it is used for aluminium production than for personal consumption. If at some point the profitability of that water becomes so great that the aluminium smelter is able to pay more per unit than individual consumers are, then the consumers can no longer purchase water.
Allow me to give a simple example. You own the only forest in your valley, and every year you get 100 units of wood. Your villagers want these units of wood to burn for heat, but can only pay $10 a unit. They earn about $50 a year each. The next valley over has a population 1000 times bigger than yours, many of whom are wealthy and can afford to pay $1000 for finished wood products. You have enough capital to be able to pay the only 2 carpenters in your village $10 a unit to work on finished products. They are now 20 times as wealthy as everyone else in the village. For you, it is not profitable to sell a single unit of wood to anyone in the village. Even if the villagers try to outbid the next valley they won`t, because their annual wage does not cover the profits you can make from the next valley. Even if you didn`t own the wood supply it would be irrelevant - you just offer the wood supplier $60 a unit and you can still make a profit, at the expense of everyone else in the village. In fact, provided the next valley over is willing to pay more than $81 a unit for finished products, you can outbid everyone in the village and still make at least $1 profit per unit of wood compared to selling it in the village. And note that even though your two carpenters are 20 times wealthier than everyone else in the village, it amounts to them to one simple thing - they can afford to heat their homes, since each carpenter earns $1000 a year from their work and so can buy a single unit of wood. So at this rate the carpenters can never compete with you to run a business because they can only afford to buy one unit of wood a year from you, at the price the next valley over buys it at. The situation is different if you don`t own the wood supplier; but you will earn capital so fast from your little export business (even if you don`t have enough already) that you can soon buy up the wood supplier as well; and the only way the other villagers can compete with you is if they buy up and export the wood, but they have no carpenters.
Of course you will argue that everyone owns a bit of the forest, but this is really a bit strange - ownership is never equal. And even if they did, anyone with enough capital could buy out their rights before they knew what his or her plan was. Any inequality in travel rights (to get to the next valley); language skills (to trade with them); capital (to buy the wood); or skills (being a carpenter) would inevitably lead to the entire village losing their wood supply - and all without using force.
(of course, as a pure libertarian you would do several additional things: when the villagers tried to implement a public education system so the carpenters could pass on their skills, you would argue against it and try to institute a private system so no-one could afford to learn carpentry; as the forest degraded and less and less wood was produced, you would first hide the fact, then accuse those who noticed the fact of being communists, then demand more research, then pay villagers to dispute the facts, then accuse those you opposed of being profligate users of wood and therefore hypocrites, especially if they used a wooden wagon to go to the next valley to convince people there that they needed to buy less wood products).
What a charming world such a libertarian paradise would be!
the essence of your problem, Nicholas. Government is not a business and enforcement is not its main product. Government is a representative of the people, and implementing the peoples` will is its main product.
You can clear up this problem by noting the difference between coercion and violence, and reorienting your understanding of corporate coercion and government violence to properly represent this definition. This will enable you to throw out the logic of “choice” which libertarians hide behind, and view the world instead through the prism of power. Who benefits from what arrangements and why? This question is not always answered by “the government” or “me”. Sometimes it is answered by “him” and sometimes by “that corporation, but not us”.
Terje, desalination allows you to transfer large amounts of water, not “produce” it. It is physically impossible to produce water, which is a big big difference between water and food. Water is a raw material for everything, food is not. There is no conflict, for example, between people`s need for food and the aluminium industry`s need for food.
Missed my point about the analogy, didn`t you?
Flash, before I start addressing your points, why don’t you clearly state your case in a concise paragraph i.e. why water has special qualities which mean that it has to be regulated. Or whatever the hell your point is?
Missed my point about the analogy, didn`t you?
Well I am starting to get a little confused. Or more honestly, I think you are a little confused.
they think it will help them stave off the march of rationalism through society.
I think you’re drawing a long bow to say that we are trying to ’stave off the march of rationalism’. I’d say that task belongs to you and you’re performing admirably.
Flash,
There is no big difference. It is not physically impossible to produce water (ie just burn hydrogen). It just happens to be cheaper to refine it (eg desalination or recycling) or capture it as it falls from the sky (and pass it through pipes to the tap). The cost of water is essentially the cost of the labour and capital required to undertake these activities. And this labour and capital has alternate uses like producing food or aluminium. All the inputs to these processes have alternate uses and prices summarise and communicate these rival uses. Peoples need for food, water and aluminium all conflict because they all require effort to produce and there are only 24 hours in a day.
The notion that water is not produced is a fallacy of composition. Of course there is more water in the ocean than we could ever care to drink and it is endlessly replenished by rain that falls free from the sky. However when we talk about water as a consumer product we are generally talking about water of a qiven quality delivered to your tap. This is a product that requires effort to produce just as food in your pantry requires effort to produce. In economic analysis and economic policy terms there is no essential difference.
Regards,
Terje.
Aw, look, I’ll have a go:
a) can you please explain to me how we set aside a small proportion of our water reserves to replenish our supplies (like crops). Is there some way in which water breeds with itself of which I am unaware? Do bees come along and fertilise the water from other water sources, thus ensuring the spread of the source? Do we see Sydney Water driving about in trucks, laying water seeds with which to grow the next dam?
Water supplies are replenished by rain. We set aside a small proportion of our water reserves through things like dams. And it’s naturally stored in other accessible means in things like rivers and bores. And we can produce more usable water through things like treatment and desalination. Is this too difficult for you?
I think the point of b) was that farmers can take action through planting seeds to produce crops. Yes I agree. And engineers can produce usable water supplies by building dams, pumping stations, pipe lines, desalination plants and treatment works. Both activities take a natural resource and turn it into something we can use. And yes, we need water to grow crops. Definitely true. So maybe in some aspects water is more important. But really, at the end of the day, we all really need a pretty consistent supply of both food and water, so for all intensive purposes it’s much for muchness.
This is fun, but not really a great use of anyones time. I’ll pick one more:
I know, here`s an analogy - food and air are essential items, so we should assign ownership of air to individuals, and allow them to trade it.
Doesn`t work does it? But they`re both essential, like you said about water and air. Oh, but the analogy breaks down somewhere else.
If there was a scarcity of air, and it was at a point where it had to be rationed, the best way to do it would be to assign property rights to it and allow it to be traded.
In a way we are at this point, and doing this through carbon credits. Sort of. But air is still not really scarce.
Unless there is a point to be raised that adds value to the argument I’m going to leave it there, Flash. It’s getting a little irrational here at times.
Michael
Special points 1: water is an essential for human life, and an adequate supply of water an essential for civilised human life. Water is also (and unlike, say, food) an essential ingredient in all industrial processes, and in the production of other essentials of human life (e.g. food). Therefore, it needs to be regulated to whatever extent is necessary to ensure that individual humans get access to enough of it to live, and get a priority of access over other users.
i.e. there is a hierarchy of needs in the water industry which is more pronounced than in most other industries.
Special point 2: water cannot be produced; it cannot be obtained from non-water sources, and the amount obtained from a fixed amount of land cannot be easily improved through capital investment, although capital investment can reduce the amount lost. This makes it different to food (production of which is vastly improved by capital investment); or energy; or any other of the essentials of civilisation.
i.e. people are much more likely to end up competing (in the combative sense) against one another for water than they are for food or energy.
Special point 3: water collection and use activities can have direct effects on people very far away through river systems, and river systems remain essential elements of the infrastructure of water. Therefore investment in water use systems on or near rivers or in their catchment areas is an issue in which people from other States, industries, communities and indeed often countries need to have a say.
i.e. people in SA need to have a say in how water resources are used thousands of miles away in Queensland, and they need to have that say now, because what happens effects them now.
Special point 4: water management systems can be destroyed by their misuse in ways which cannot be recovered. This is extremely different to many energy production systems, and even to a certain extent food production systems. For example, over use of water in Queensland can destroy wetlands in NSW which control the quality and purity of water entering rivers which is ultimately drunk by people in SA. Once the wetlands are destroyed, simply reflooding them does not necessarily repair them. This is true of catchment areas generally. So while a farmer, for example, can usually afford a bad year or two this may not be true for a river system. Water tables, rivers and catchment areas affect not just how we collect water now, but the efficiency with which we can collect water in the future. They are almost exclusively natural systems, not artificial, and they are renowned for their fragility. Even Warragamba dam has a catchment area, and what goes on in or around it is essential for the quality and quantity of Sydney`s water.
None of these special points are arguments per se against the privatisation of water; but they are arguments against the careless privatisation of water, against the careless assignment of property rights, and against the careless removal of social control of essential ecosystem services. They are also arguments against analogising with food. If the aluminium industry needed food to refine aluminium, would you be happy with them backing a truck up to Coles and buying everything in the shop? No, you would probably find in such a circumstance that there was an increased clamour for national ownership of food production and distribution.
Michael, you proved my point here:
An argument by analogy fails if any part of it is wrong; it doesn`t work jsut because any part of it is right. You have agreed that the air water analogy is wrong because there is a difference; it is not sufficient to compare them because there is a similarity. Therefore, the analogy fails. Similarly there is a difference between water and food; the analogy fails.
But please, tell me how I can set aside a small amount of water and use it to replenish my supplies? As opposed to setting aside more water than I can use and then eating into the supply at a rate equal to its resupply? The latter is water supply; the former is food supply. Very different things.
Fatfingers:
“How would this [abolition of governmental ownership and control of water resources] be achieved?”
Sale?
“The ownership and control is horribly convoluted at the moment. How would government be extracted from it while maintaining supply?”
Necessary things are bought and sold all the time. Why would it disrupt supply?
Flash_heart:
Even if you had made out a case against the market order making decision on the supply of water, which you haven’t, you still haven’t done anything to make out a case for government supplying it.
Oh by the way, you can leave out the personal argument. It is irrelevant and proves nothing.
Government is a subset of society. Society has all the freedom, power and money to do anything government wants to do. The only possible reason for government taking over the water supply is because it knows society doesn’t want to do it, and wouldn’t do it without threats of fines and imprisonment; otherwise, why not just leave society to do it?
If the people choosing for themselves in transactions in which they are directly exposed to the benefits and costs are not representative, then how can a once-in-three years anonymous compulsory election, with all the different issues bundled in together, no law against politicians making misleading or deceptive statements, preference deals in marginal electorates, backroom preselection deals, compulsory contributions, and the connection between individual costs and benefits severed, how can that possibly claim to be more ‘representative’?
‘If the original problem is that people are not smart enough to choose for themselves what voluntary transactions to enter into, where they have direct input and direct exposure to the benefits or downside, then how can the same people be smart enough to choose officials over and above them to restrict their freedom to choose, where the process does not allow the many different policies on to be distinguished from each other, and there is no direct connection for the individual between costs and benefits?
How do you know that the profit from a unit of water used to produce aluminium is or would be higher than the profit from a unit of water used to slake thirst? Or rather, please admit that you don’t know.
What about if the government, one day after an election, decided to sell the entire water supply to China? The next chance the people would get to make a decision on it would be in three years time, in which time, they would all have thirsted to death.
That is the level of the arguments you are putting up.
Is that the best you can do?
The aluminium industry needs labour and labour needs food so the aluminium industry depends on the production of food. It is an odd analogy you are trying to present.
In terms of wetlands and natural flows there are of course complexities surrounding the assignment of rights. However there are enormous potential improvements that can be made with the application of capital if the incentives are right. You are right that the gains to be had lay mostly in reducing wastage but so what. Conservation is not a dirty word.
Flash-heart, are you being deliberately obtuse? The essence of my argument is that I feel as free to distrust government as I would anyone trying to sell me something. Government is coercion- what do you think the cops are for? Whilst coercion has a purpose, and violence can be mindless, the only coercion that business can do is if it gets government on its’ side.
As for Government representing the whole community, whilst that is possible, it is also possible for our representatives to think only of themselves. The current scandals in Western Australia, and ex-premier Burke, are a good example of what can happen. Sure, that can also happen in business- which proves my point. We should be as suspicious of Big Government as we are of Big Businesses. Why are you only suspicious of private firms, not public services?
Flash-Heart- As for rudeness, whilst I read some vitriolic comments from Graeme which were directed at Mark, only you have consistently derided libertarian commenters, and introduced personal attacks into the argument. You aren’t responding in kind, you’re starting it! That’s probably why you chose to use an alias from the start. you always intended to get personal.
Here’s hoping that when you reply, you’ll try to answer the arguments, and not bring in some mud so you can sling it around.
By the way Flash_heart, what do you say is the significance of the difference between coercion and violence?
Can we agree that violence is the actual use of physical force itself, and coercion is the threat of it? What do you say the issue is?
Flash, production of useable food and water both have an impact on the environment. You can’t magically ‘create’ food any more than you can ‘create’ water. If you grow crops and produce food it takes resources from the environment which has effects on other people and areas. Just like your example with water. If through producing food or water for the market you end up consuming someone elses resources you should pay them for it. If you produce waste that other people get lumped with you should have to pay them for it (if they agree) or stop producing it.
Due to it’s availability water is becoming more valuable than food. This doesn’t mean we should move away from a market system though. In fact, it’s all the more reason to move towards a market based system. That’s the best way to manage this valuable resource.
With the air, water, food analogy, I agree that at this point in time the most valuable resource is water due to it’s relative scarcity compared to the other two. But that doesn’t make either air or food infinitely abundant forever. With air there is also a finite amount of it on the planet and we are already dealing with things like polluting it with carbon emissions. Food is also not infinite. You are suggesting we can always grow more so long as we have water and there is energy left in the sun! It’s not completely wrong but food production is constrained by things like arable land, people to work the farming industries, diseases, pests and natural disasters (eg. bananas!). The availability of food will ebb and flow and so will it’s price. And if everything else is kept constant there is a maximum amount of food that can be produced at any given time.
So I’d say the analogy stands more than it fails. And the best way to manage these resources is through privatisation and market forces, not government regulation.
Flash, this argument has got complex and perhaps even confused and emotional (a little bit)! I think I’ve addressed your points. If I’m missing something then pose a succinct single point at a time and we can discuss it.
Nicholas, a definition of coercion for you:
Would you define the boycotts against South Africa in the 80s as Violence or Coercion? There was no threat of force or violence in those sanctions, but they brought a nation to its knees. Similarly, there is no threat of force or violence in the sanctions against Cuba, but it is clearly coercion.
This means that this statement
is completely and totally wrong. As is this:
Violence is the actual use of physical force, and coercion is the threat of violence or other reprisals. This makes a big difference to the way you assess the role of individuals, government, big and small business in society. A large part of the role of a healthy government is ensuring that business and other groups do not have the power to coerce individuals to their benefit. Marxism was founded on the belief that every interaction between business and individuals was based on coercion; libertarianism is founded on the belief that no interaction is based on coercion. Both ideologies are fundamentally wrong in their assessment of this relationship.
Sanctions are coercion against the people who want to trade. They want to participate in a free and voluntary exchange but are denied by the government (backed up with the threat of violence).
I disagree with your definition of coercion. I agree with http://dictionary.reference.com/browse/coercion when it states that coercion is force or intimidation [ie threat of force] to obtain compliance. On this website (and generally in all discussions of political philosophy) this is how the word “coercion” should be understood.
You have used a much broader definition of coercion that include free & voluntary behaviour which is a pointless semantic trick. These semantic games in no way change the fundamentals of the argument (libertarians are still against all violent and violence-based involuntary interactions), but they simply require pointless side-tracks into defining our terms. If you insist on misunderstanding our use of “coercion” then think of another word (”violence-based-coercion” or “involuntarianism” or whatever) and whenever we write “coercion” replace it in your mind with your new word.
Flash-heart, the threat of violence is ‘intimidation’, the actual use of violence for a purpose or an end is coercion. Anyone, private or public, can use any of these. The government has a police force so it can fulfil its’ policies. What do you call it when the Government initiates force?
As for your definition of libertarianism, I would say- ‘The belief that no interaction should be based on coercion.’ I realize that this is an ideal, but it is an ideal worth trying to reify, and I reiterate that we should only fall back on government as a last resort. Incidentally, what do you think of WA Inc? What would you have done to stop it, or what process do you believe should be in place to stop future occurrences
Flash_heart, if I don’t want to go to work, but I do so because if I don’t, they won’t pay me, is that coercion? And if not, why not?
nicholas — I disagree with your definition of coercion and I suggest you check out the link I provided also.
You have defined coercion as the use of violence. We already have a word for that: “violence”.
But libertarians are also against the threat of violence to compel action, such as “give me your money or I’ll kill you”. For this concept we need another word, hence: “coercion”.
There are other ways to influence behaviour — for example you can ask really nicely or offer to exchange something voluntarily. Libertarians have nothing against these sorts of voluntary interactions… though some people (like flash_heart) see some voluntary interactions as immoral because people have different access to resources therefore different capacities to influence and trade with other people.
I agree that there is a so-called “power” imbalance, but I think an approach that allows all voluntary behaviour will lead to a better outcome in total, including for currently poor people. And it has the added moral benefit of being against all violence.
John, read a little further down your dictionary. Also look up the word “force”.
You might like to note that the sanctions to which I refer were not initially implemented by government - they were voluntary action against south africa by organisations. You might further like to note that at no point was force levied against South Africa. Governments ultimately weighed in on the sanctions, but when they did they used their coercive powers on people in their own countries to enforce the sanctions, not on people in South Africa. The South African government was forced to change its policy without the use of violence or force. (You may also recall that the sanctions were not complete, as for example in the SA cricket team`s tour of NZ, when the govt used its coercive power to try and protect the sanction busters against the voluntary actions of NZ citizens). This is an example of people coercing South Africa into a radical change of policy without the threat of violence. Should I call this “influence”?
For the poor and those without capital or resources, coercion has very little to do with violence and a lot to do with money and power. You won`t find many poor people who are concerned about the threat of violence from their employer, but you will find a lot who are concerned about the way all employers can force them to do as they want.
And yes, Justin, if you go to work in order to eat, that is a form of coercion. You have been coerced into working. All societies accept this form of coercion as necessary, but most social democracies guarantee a minimum level of coercion below which no employer can stoop. If someone tries to get you to work full time for less than the dole, you won`t take the job. i.e. this is considered too coercive for society to stand. So while your weird view of coercion means you have to pretend some people “choose” to work for a dollar an hour, in fact everyone else knows that this situation is in fact coercion, and we choose (through not electing the LDP) to ensure that society will intervene to prevent this kind of “choice” from being forced upon people. We are in fact willing to give up some of our taxes in order to protect strangers from coercion. This is called “society”.
as in, for example, “please sir, can you pay me an extra shilling a week so my 5 year old child doesn`t have to work in the coal mines for 10 hours a day?”
This is a voluntary exchange, you see. When the mine owner refuses, you “choose” to send your son down the mine. You asked nicely, but the nice mine owner who you “chose” to work for politely disagreed, so in order to continue feeding your family you made a “choice”.
But be careful Nicholas - this is influence, not coercion. The nice mine owner never said he would beat you if you didn`t “choose” to send your son down the mine. Certainly, he implied that you would starve - in fact he made this very clear when he refused to raise your wages - but it was still your choice.
Of course, if you were to gather the other parents in the village, refuse to work, and blockade the mine, threatening violence against anyone who tried to work, that would be wrong. Coercion and all that, denying the mine owner his right to choose to employ people at lower wages than they could afford to eat on.
Thus we see the libertarian language of “choice” in action, and the flexibility with which its selective use of “coercion” and “choice” works to deny wrong-doing by anyone except the government, or people acting communally to protect their rights against those more powerful than themselves. It is the perfect construction of and justification for the rights of the powerful over the weak.
Flash,
The problem is not the miner that won’t pay more but the economy in which miners wages are low and people are generally in poverty. Imposing wage rules or otherwise on the miner does not improve the fundamental output limits of the economy (in fact it makes things worse) but it does changes the allocation of income (from the mine owner) to the labourers in the short term. In the long term it disuades people from investing in mining and evetually leads to a surplus of mine labour that is expressed through unemployment or an industry exodus. Policy should be judged by it’s long run incentive effects and not by it’s stated goal or ideal.
Regards,
Terje.
This is called “society”.
Society is a group of people who voluntarily come together to further their own individual needs and wants through voluntary interaction and voluntary trade.
We are in fact willing to give up some of our taxes in order to protect strangers from coercion.
This is an oxymoron. You don’t voluntarily give up taxes. They get taken from you. If it’s voluntary it’s called a ‘donation’.
And yes, Justin, if you go to work in order to eat, that is a form of coercion. You have been coerced into working.
No, you haven’t. You stay at home and grow vegetables, humans have been surviving from subsistance agriculture for eons.
An employment contract is not coercion. Slavery and involuntary servitude is. Libertarians are in favour of employment contracts, not in favour of slavery.
Flash_heart:
Is it still coercion if the reason I’m working is to buy a kettle? I don’t want to work, but if I don’t turn up, the employer will sack me, and that’s the only reason I turn up to work? Is that coercion? Answer please.
What about if what I want to buy is real estate? 70 percent of workers in Australia own their own home, so your definition doesn’t apply to 70 percent, is that correct?
How about a mobile phone? A DVD player? Please answer.
Isn’t it true that it’s coercion for the employer to threaten me with the sack, no matter what I was going to buy, because according to you it’s the threat of reprisals that’s forcing me into doing something I don’t want to do, that defines coercion?
But if not, then whether it’s coercion depends on the things the worker wanted to buy. What if the employer doesn’t know what the workers are buying? Is it still coercion then? What if one employee wanted to buy sorghum but the other one wanted to buy a cup? Is the employer coercing one worker, or both, or neither? Why or why not?
In any case, could you please give us a complete list of all the things a worker can and cannot buy so his employer can know that he’s safe from perpetrating coercion?
How could anyone have any general rule of conduct that he could knowingly follow in order to avoid coercing someone, if he were to follow your definition of coercion?
You see, Flash_heart, you are on the slippery slope. What you are proposing is nothing other but a scheme of total and arbitrary power by which no-one but Flash_heart Esquire has the authority to decide what other people should be allowed to do with their lives and their property.
Strip away your personal arguments and pious hype about people starving to death, and you are being soundly thrashed.
By the way, don’t think it has gone unnoticed that you have twice failed to answer the questions I asked of you which, if you even try to answer them, will show that your critique is based on nonsense. I challenge you to answer them.
To take even your absurd and extremist example, if, in the absence of the employer, the worker was starving to death (a scenario that is of precisely no relevance to the original topic), and no-one in the world was willing to do anything to save him, (why not Flash-heart, since the employer wasn’t causing the risk of starvation in the first place?) and the only person who was saving him from death by starvation was the employer by offering him employment, then surely that means the employer is offering him the best deal in the world? And you want to violate the employer’s property rights for doing that? Well don’t be surprised if his response is not to employ people who are starving.
I’m glad we have had this discussion. You have shown why socialism’s false doctrine of ‘coercion’ and approval of official theft has resulted in food shortages and famine over and over again, and why in Australia we have a free market for food and no food shortage, at the same time as government control of the water supply and a water shortage. Thanks for making my case.
QED. From this we may see, that governmental ownership and control of water should be abolished, and the reasons against do not and cannot stand up to critical scrutiny.
Flash_heart, I have been arguing with libertarians for about seven years now, and I have to tell you that you need to come up with some better arguments or points to make any impression on this seasoned crowd. Your current attempts make me feel a bit embarrassed, to be honest.
The rest of you, I commend your willingness to engage with Flash_heart’s simplistic and confused though passionate efforts. He or she does have one good point, though, regarding the imbalances of power that arise in the short-term with free markets due to delays in self-correction. For example, the monopsony power of dominant employers in certain areas, or monopolies of certain markets. Granted, free market theory shows that eventually those price signals (of labour or goods) will erode the imbalance, but in the meantime there are problems. You may consider such problems as the lesser evil to government intervention, but that’s because it’s easy to do so from a theoretical point of view when you’re not the worker/consumer actually experiencing those problems.
It comes back to my first, most fundamental objection to libertarianism - eliminating political power leaves only economic power, which is inherently skewed in distribution, and left alone simply becomes more and more unequal. This is a bad thing from a utilitarian point of view.
Justin, “sale” isn’t specific. Sell what? How? Terje gave a reasonable answer, but short-hand of this type isn’t good enough for an aspiring political party that wants to implement their ideals. It’s something for policy wonks, to be sure, but I’m gradually realising I am one. If you’re not, fine, but don’t shrug off genuine questions with glib answers.
Legislation doesn’t solve probelms instantaneously either, FF. People just think it can because the law can be passed quickly sometimes. A lot (most?) of the time it doesn’t solve problems at all. Whereas the market has an impressive track record in the real world. So, yes, lesser of two evils I suppose. But if you look at the market as people using their labours and cooperating voluntarily to further the human condition then it’s not really all evil, is it?
Legislation can also slow necessary adjustments and prolong the adjustment by creating false hope. Like a dam that lets the pressure build but can never hold back the tide it can in fact make the day of reconning even more painful and make adjustment when it comes even more sudden. Privatization is in a way a bit like dam busting however the pain that is caused should rightly be attributed to the nationalists who created the blockage in the first instance.
And I hope everyone noticed that my questions about WA Inc went unanswered? Clearly, government and business shouldn’t mix; equally clearly, when they do, you have corruption! We would all be better off, if governments were neutral!
So how would you improve things Flash?
What is your solution to improving the world. Or are you happy with the current regulatory and bureacracy heavy system.
You obviously don’t want a high degree of business freedom. And this is what concerns you so much about libertarian ideas?
Does the pursuit of money in a society that protects individuals from initiary force make people evil? Money is a measure of value, so how can the pursuit of creating value make people do evil things?
Give me an example of where the pursuit of money without the use of initiary force resulted in a crime being commited towards someone. Or do you