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Water, Water, Everywhere Except in Clear Property Rights

By: Ryan Hildebrand - Sep 9, 2013, 11:12 am

Water, that most vital of substances for survival. It composes the majority of a person’s body weight and covers the vast majority of the earth’s surface, though only tiny fraction of it is drinkable.

If something has such value, as water does, there is a market for it — but who owns the world’s water? How is it being used, and is that use efficient? What part does technology have to play?

For centuries, many have noted water as a major source of conflict in the world. Both state and non-state entities have fought over it, much to the derision of those affected. In modern times, nation-states have, for the most part, laid claim to water in the territory controlled by their militaries and bureaucracies.

In some instances, government officials have sanctioned monopolies for private corporations. One might even point to examples such as these for “market failure” when it comes to a basic utility such as water. In reality, however, these have not been free-market alternatives to state-owned industries, but only a facade thereof. What would be a real alternative?

In a situation where private individuals would be able to own, deliver, and sell water, an impetus would be on the merchant to deliver a clean, reliable source of water to peoples’ homes, lest he go out of business. Instead, government monopolies, with no direct accountability, often allow facilities to fail or work in a minimally-functional manner, and such failures lead to multiple levels of damage to the economy and local ecology.

There is an alternative to the government or crony monopoly on water, albeit rarely utilized.

In many places across the globe, either rain, standing ponds and lakes, streams, or even groundwater is available to individuals on private real estate. It would only stand to reason that water, like any other resource such oil or gold, would belong to the title owner of that property, correct?

Not so fast. Although that train of thought makes sense logically, it is legally incorrect (and somewhat arbitrary, based upon water source) in many areas. In the American state of Oregon, for example, all water in the territory is claimed by the government of that area.

Such declarations are both preposterous and unreasonable. The state may as well claim that it owns all the people in the area, as they most likely have at least some “Oregonian Water” in them. It does not end there, though. Even small home rainwater cisterns are illegal in some places — and this is in the Pacific Northwest, which has some of the highest precipitation levels in North America!

Elsewhere in the Western Hemisphere, the act of “privatization” of municipal water systems (as noted earlier, in a corporatist government-sanctioned monopoly fashion) has lead to false shortages of potable water. Such corporatist policies reflect poorly on private enterprise in general and lead to backlashes from the populace, which often calls for a return to direct government control of water utilities. How short people’s memories are, given that the previous operation was poorly done by the state. Adding to the problem, price controls make maintaining facilities difficult.

So, what’s the solution? Some would like to further collectivize water sources. Okay, so who will make the water drinkable and deliver it? Such ideas fly in the face of economic reality. Others point to a false dichotomy where it is either government or some “evil corporation” that will control all an area’s water? This is fallacy as well. In a free market system, free of restriction by government on private individuals, there is incentive to conserve water as a precious commodity and sell it based upon demand of the resource. In a collective system, one is left with the “Tragedy of the Commons,” which is the state of water distribution currently.

It is obviously time for a change.

Ryan Hildebrand Ryan Hildebrand

Dr. Ryan Hildebrand is a college instructor in New Orleans, Louisiana, and co-host of The Neo and Wim Show. You can follow his personal blog, NOLA City Blues, and his Twitter @NOLACityBlues. Read more of his featured PanAm Post column, "Self-Ownership."