California Water Crisis: Capitalism or Socialism to the Rescue?

There’s not enough water in California. Not even close. How should we determine who gets how much, and for what purpose?

Green golf courses? Leaky faucets? Flowers in front lawns? Growing almonds? Daily showers? We can’t have everything, and something has to give.

A capitalist/libertarian would suggest to remove all legal obstacles to a 100% free water market. Owners of water rights could charge whatever they wanted, limited only by competition. Clearly, the price of water would rise, heavy consumers who couldn’t afford it would be priced out of the market (e.g. almond growing, which takes 1 gallon of water per produced almond) and the market-optimal allocation of water to consumption would be found. Problem solved.

A socialist would suggest to allocate water to everybody according to fairness and need. In this scheme, every inhabitant of California would get the same basic water allowance, and some important (for the economy of California) industries would get the allocations they need to survive. For example, much of the California Central Valley is dependent on agriculture. If farmers don’t have enough (of the currently below-market-priced) water, they lose their livelihoods and the Central Valley becomes a series of ghost towns. The socialist would want to avoid that.

My gut feel tells me that I have no more right to take a long shower than somebody making minimum wage, or a gazillionaire, and vice versa. Water is so fundamental to life that if feels very unfair to make less available to poor people. It’s not like we charge for air either. So my gut directs me in the social-fairness-direction.

But there is a big BUT: who is going to determine who gets what water, and what the rules are? I know who it is. It is people like the Santa Clara Valley Water District employees that administer programs such as the “replace-your-toilet-for-a-rebate” program I attempted to participate in last year. It probably would be the exact same individuals! And having them in charge of the rules, and the enforcement, of who gets to use water for what, is a situation that I do not wish on anybody who has any intention of staying sane. The sheer amout of bureaucratic boneheadedness, while being totally secure in the knowledge that their rules cannot be disputed or appealed, is … infuriating does not even begin to capture it. I shudder if I imagine people like them would be put in a position to control an important aspect of our lives — water.

Given this, I’m all in favor of a purely capitalist solution. It’s probably the worst solution, except for what the socialist solution comes with.

Of course it won’t happen. What does happen is an opaque, bizarre, non-logical, special-interest-driven hodgepodge of a smorgasboard for lobbyists and lawyers. Perhaps that is the societally optimal solution; I don’t know. But the water crisis is an interesting case for capitalism and socialism in the real world.

P.S. Please don’t quibble with my words capitalist and socialist; I just use them as stereotypes to make my point.