Free market vs government intervention for limited important resources.

[Zarxrax]

Theres currently a big water shortage in much of the south. I was just having a discussion with some others about this situation, and the discussion started moving towards markets and government intervention. I was actually taken aback when I found myself actually ADVOCATING government intervention and control in this situation.

I've been thinking about it a bit, and I can't really come up with any way that government intervention would not be the best solution.

Take a situation where water supplies are very limited. Without government regulation, (and actually as it stands right now) anyone can get their own water (well water, for instance), and eventually, it could all be used up. Also, if you had a private company providing water service, the prices would skyrocket as supplies dwindled. This would prevent the poor from having access to one of the basic necessities of life.

Whats the solution here? Is there really no other way than for the government to ration the water, to prevent people from getting their own water from the ground, and so on?

 

[querty]

Do you wish to have the government controlling the food supply, as well? I mean, such a basic necessity of life couldn't possibly be taken care of by private companies, the prices would skyrocket and poor people would soon starve to death!

 

[davver]

The water shortage is CAUSED by government intervention. When you price a good below its market price you will end up with a shortage, Eco 101.

Maybe the price of water should be higher. Drinking water makes up maybe 1% of the water people use (making this up, but its really small). Most of your water gets wasted watering your lawn. Maybe if watering your lawn actually cost money people wouldn't buy giant plots of land and spew water over it all the time.

This is like the people who think gas prices are "too high". Guess what, there is no government divined price for gas. That market sets a price for gas based on supply and demand. If you don't like it we can do wage and price controls like the 70s, then you can wait on line for three hours just to get gas.

 

[Zarxrax]

davver, while I don't deny much of what you say, it fails to take into account people obtaining their own water independently of the government. When people can do that, where is the incentive to not waste it?

 

[Mahkato]

Read The Politically Incorrect Guide to Capitalism by Robert Murphy.

 

[noxagol]

Government intervention is what caused it by making it cheaper than it really should be. By giving control of this necessary resource to private companies and the people, it will actually insure that there will be water left to be had because of the high prices.

 

[user]

If you want to avoid shortages and use resources efficiently, you should support the free market over government intervention.

 

[Zarxrax]

Why is everyone flat out ignoring the fact that anyone can get their own water out of the ground :\
There is no cost, it doesn't matter whether water is sold by the government or a private company. Anyone can take the water and use it. HOW can a free market keep the supply from running out in that situation?

 

[user]

Why is everyone flat out ignoring the fact that anyone can get their own water out of the ground :\
There is no cost, it doesn't matter whether water is sold by the government or a private company. Anyone can take the water and use it. HOW can a free market keep the supply from running out in that situation?

If the supply of water is running low, the price will go up. There's the incentive for someone to sell it instead of wasting it.

 

[Zarxrax]

If the supply of water is running low, the price will go up. There's the incentive for someone to sell it instead of wasting it.

As price goes up, more people will make their own wells and stuff to obtain water freely instead of buying it. Water will also hit price ceiling, which is the cost at which water can be imported from other cities. This will result in the water being used up by the largest consumers of it (businesses and such), while the people end up running out.