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.
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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 simply think capitalism is less efficient than socialism?
I did look further down that link flash and I saw your definition. I was pointing out which definition libertrians use. From your miners example it seems that you now understands how we use coercion.
We can now move forward from the semantics game and discuss how many children would be forced into the mining business for a shilling or starve to death. Does anybody have the latest numbers?
I have never argued that a voluntary system will only lead to good outcomes. I have simply argued that a voluntary system is voluntary, voluntary is better than involuntary, and a voluntary system will lead to a better outcome than an involuntary system.
Fatfingers, I didn’t mean to be simplistic. It’s just that I think in general when it comes to government there is a tendency to overlook the simple truths, and to prefer complicated non-truths.
Why couldn’t the government simply announce that it’s going to sell any and every water resource, and accept the highest offer in any given case? The money, IMO, should be remitted to the taxpayers. There would need to be a transition period. That is normally provided for in conveyancing between exchange of contracts, and settlement. The process could be similar.
I believe that in the UK a lot of rivers and streams are privately owned and controlled, and they have a good record with conservation.
People would offer what they think the water is worth, taking into account all the variables like how much flow and stock they think they would get, costs, the benefits, the opportunities for different usages like fishing, drinking, irrigation, boating, the threats like storms, and so on. Although people have talked of scenarios with large companies buying up huge amounts, it is also possible that the actual holdings would end up being like land, a relatively large number of small-holdings.
The common law of nuisance, and Rylands -v- Fletcher (dangerous thing escaping from one’s property), etc., would continue to apply.
Fatfingers, I have not read much of your arguments but they seem to come from an economic and policy perspective, which is admirable and certainly two areas where it would appear that libertarians are sadly lacking (a common problem for ideological movements, be it their own fault or not). However, although there are some areas of policy with which I am very familiar, my arguments are intended to be moral. Libertarianism fundamentally is about the destruction of society, and to me this is far more important than a few economic inefficiencies or some deadweight losses. Although libertarianism itself has not had much electoral success, some of its ideas appeal to modern parliamentarians because it gives them an ideological smokescreen behind which to divest themselves of responsibilities. It also appeals the more rampant environmental polluters of the world, for whom libertarians have been very willing shills over the last 15 years. If you find a moral objection to phrases like “there is no such thing as society” embarrassing, well that`s fine, keep plugging on the policy and economic arguments. I`m sure that they will be better and more reasonably put by sensible you than by scornful me.
Nicholas Gray, your questions about WA Inc went unnoticed because I don`t know anything about WA Inc. However it is an interesting point you raise regarding business involvement in corruption. It takes 2 to tango, right? It isn`t just the government doing bad things in this instance, but business too.
Which leads to a general observation I have been forced to notice about commenters here, a complete refusal to accept that corporations and businesses might do bad things. Thus you are able to sneer about my shilling wages example (a real example from the “libertarian” period you aspire to). Particularly, I notice a complete failure of will when it comes to confronting the corrupt and nasty behaviour of modern corporations. Particularly, let us consider the global warming issue. We know for a fact that companies like Exxon Mobil have done a lot to deny global warming, including funding front companies to attack the science, smearing the reputations of scientists, putting pressure on governments to deny the science, funding parties which oppose global warming, and claiming economic ruin if they go along with the required changes. This isn`t the actions of one company but of a whole sector, the concerted efforts of which have only fallen apart recently as some of the companies break ranks when the legislative environment of their own countries begins to bite.
Tobacco companies also did this, and hid their own research proving the links to cancer while continuing to research ways to make their products addictive. The manufacturing sector ran similar attacks on acid rain activists in teh 70s; the woodchipping industry uses these tactics against environmentalists and environmental scientists alike – look at the way they got involved in the last federal election for an example of rank interference in social decision-making – and the arms industry is big on this activity in America, funding the NRA and having a very large effect on politics. These are not isolated incidents, but examples of corporations doing a lot to prevent changes which are necessary for everyone`s good. The consequences of this pressure activity are generally threefold: public debate is corrupted; science itself is attacked, and scientists are smeared and in some cases suffer significant damage to their reputation; and people die (for exampel from cancer or gunshot wounds) and get sick. These are not minor effects, particularly in the case of cigarettes.
Now let us suppose that a large company owns a water supply. Why should I believe they will behave differently when presented with this history of corporate activity? If a company were presented with evidence that its highly profitable activities were bad for human health or the environment, why should I suppose that it would behave differently to the above examples? We have 60 years of evidence of corporations doing this.
Now we move to the concrete example: the elimination of cholera. John Snow discovered the cause of cholera in Victorian england, and asked the local parish to remove a pump handle to confirm his suspicions. His work led to rapid changes in the treatment of water which required considerable infrastructure investment and led to teh saving of countless lives. Why should I assume that, if the pump were run by a profit-making corporation, they would not have fought his changes every step of the way? By modern standards they would have done the following:
1. denied the science
2. attacked John Snow and his reputation
3. produced their own dodgy research showing a different link
4. refused to allow research into their water supplies
5. funded front organisations to claim the science was wrong
6. claimed they would be bankrupted and everyone would die of thirst
7. upon finally admitting the truth, demanded minimal rather than best-practice changes
8. fought compensation in the courts for the thousands of families destroyed by their negligence
Tell me why, with 60 years of history of this kind of behaviour – and with the history of things like the battle against cholera as support for public ownership of essential services – I should believe that private ownership of water is a good thing. How does the evidence favour it?
(And why won`t you lot admit that libertarians have been the most willing shills for this kind of corporate obfuscation every step of the way?)
Flash, libertarians don’t deny the existence of society. They simply state the fact that society is composed of individuals. If a policy is not working for the individuals then it’s not working for that society. The socialist left and the conservative right use a collectivist argument to claim the existence of an entity (separate from the individuals) called ’society’ or ‘the common good’, then argue that it must be served by certain individuals forgoing their freedom or property in the name of doing whats ‘morally’ correct. This is really just giving the wants of one group of individuals a higher priority than another group without a rational basis. This is where the ‘no such thing as society’ comes from.
No one is denying that businesses do bad things. We are denying that they use initiating force.
Flash it’s nobody else’s fault that you’re alive. Other people don’t owe you just because you happen to exist. I’d say this is the underlying philosophical point regarding your view on coercion.
The point in time in human history you’ve happened to be born into probably requires you get a job in order to buy food. The only force at work is that of nature and existence. Why should anyone expect to forcibly obtain something of value? When does stealing become OK?
If governments didn’t have initiary force powers, businesses wouldn’t need to attempt to influence them. And what is wrong with attempting influence anyway. I thought you had faith in your righteous governments to do the “people’s will”.
This is what you previously stated in response to Nicholas’s assertion that libertarians (like most people) are skeptical of governments: You stated, “Government is a representative of the people, and implements the peoples`will”. Even to non-libertarians, this is a fairy tale. I know people that work for the government who are more skeptical than you seem to be.
Assuming a democracy, the only way to interpret your statement is; that it should be legal for the majority (also assuming a particular government descision has majority support) to force their will on everybody, in regards to any issue a majority (hopefully) of people want the government to regulate.
So if the use of initiary force/violence/coercion is legal for governments the best we could ever hope for is that the majority would agree with the particular application of force.
But since you bring up morals, isn’t initiating force wrong? For example, everyone throughout history has known that murder is wrong (except for societies that had human sacrifice performed by religious dictatorships, ie: governments). A less extreme example is censorship. Why is it OK for some art to be banned because a majority (hopefully) of people happen to dislike it enough to brand it as “offensive”?
Do we consider government to be a higher power in the way people used to think Monarchs were chosen by God and the blood line couldn’t be broken? Why is it OK for governments to commit certain crimes and not for people simply because their actions have (hopefully) majority support? The biggest gang wins? You must agree the system could do with some improving. Would it make sense to give governments more use of initiary force powers considering this faulty system. Why is it that you are so sure a more free alternative would be worse?
Flash, I thought that Nicholas’ statement that libertarians are skeptical of governments was fair. Why blindly trust governments? Their decisions are backed by an armed police force and a penal system! What business has these avenues of force? If you allow governments initiary force powers, you have no choice but to blindly trust their descisions. The more this is done, the more catastrophic the consequences. ie: communist countries/military dictatorships.
Historically governments have by far caused the most human death and misery. Of course, I think the people are partly to blame for accepting and being submissive to governments and not being willing to take responsibility for their lives. But this is mainly because they didn’t realise there were other possibilities.
Speaking historically: The beginnings of the Ancient Greek civilisation, the conolisation and first few hundred years of Nth America, the relaxing of religious law in Europe to bring the renaissance. Freedom has had the biggest impact on human prosperity. Many tribal societies also had high levels of freedom and lived happily for generations. Historically, governments were usually monarchies. They lived off the hard work of the people and fought wars to increase their land and plunder the hard work of their neighbours. It’s the same concept today.
Who are the most important and most idealised people in history? Those who did what was morally right and stood up to forced authority and establisment. Martin Luther, Jesus, Ghandi, Mandella, Galileo, Socrates, Martin Luther King Jr. to name a few off the top of my head. These people are immortalised, the governments at the time will or already have been forgotten. Those political leaders that are remembered are usually remembered for their heneous crimes and the number of people they killed, and are not idealised like the afroementioned.
‘Flash-heart’, ‘Government is a representative of the people’.
You said it.
What an empty statement!
Governments are composed of human beings like you and me. Even Kim Il-jong is a human being, much as we would hate to admit it. So were all the leaders of the communist parties past and present, and every member of the National Socialist Party. Every dictator who suppressed his people was a human being. Most governments claim to be working for their people’s benefit, regardless of type of government.
Perhaps you meant ‘Governments SHOULD BE representative of their people’. In that case, a democratic system would best represent the people, or do you have another idea? Continuous opinion polls on every subject?
You also claimed that the function of governments is to carry out the people’s will. Is this the same as the National Will or the General Will of the nation, as in French Revolutionary times, when guillotines were the one growth industry? When did I agree that wisdom would be found in numbers? Or is my agreement not required, because the Government, having the numbers, will be able to use force against me if I try to resist? What sort of Social Contract is it that doesn’t require my consent. It sounds just like one of those Mafia ‘offers’ which you can’t refuse, and that’s because it is! They’re both peddling protection, except that the Mafioso is more honest about it!
Well, time for you to go back to being a shill for the Statists. I hope you’re getting good money- because you sure do churn out lots of waffle! I only wish I was a shill for business- I’d be getting paid for all this then!
Hey Flash, while we’re at it, we do actually think that your idea of making sure no one is forgotten is a really nice sentiment! It’s just that the way you’re going about it has been tried in just about every variation imaginable, and it always fails. Either catastrophically like the USSR or gradually like France.
The way to ensure that there is enough wealth to go round is to have a society generating lots of it. That’s done through freeing up markets and letting people get on with business. Regulation like you suggest is counter-productive to this. If you have a society like that, there will be enough wealth to provide a safety net by some means (hopefully by private charity or a ‘Reform 30/30′ NIT system!). Not to mention people like Bill Gates and Warren Buffet who will realise that they’ve made far more wealth than they need and therefore use it to wipe a disease off the planet or something.
Let’s be honest, the less wealthy have a better standard of living in countries like this than in ones that have implemented lots of regulations to ensure that poverty doesn’t happen. Do you see any reason why your system would be any different?
Michael, “the way” I`m “going to go about it” hasn`t even been stated, so how do you know if it has been tried or not?
I appear to have elicited an outpouring of grief with my statement that governments represent the will of the people. However, I still have received no answer to my cholera scenario, and my (I think) quite reasonable claim that people have a lot of reason to suspect that business doesn`t serve our interests unless it is forced to. Come on kids, less distractions.
Also, while various of you assume that I am or am not an arch-socialist or lefty it`s worth bearing in mind that there are various streams of leftist thought which have been exceedingly critical of government as well as business. Anarchism, anarcho-syndicalism, unionism and the New Left in America spring to mind as immediate examples. Also Mandela, Gandhi, etc. Many streams of leftist thought also can`t be fairly classified in this regard because (like Castro in Cuba, or the early bolshevists) they were fighting for a large slice of society to have any say in how it is run (and being fought incidentally by … big business). It`s hardly fair to complain about their plans to institute a particular government when what they were fighting against was a murderous and repressive regime which imprisoned anyone who dared to complain about the predations of big business.
But this is not an excuse for you all to have a go at Paul Keating, or Castro, or whoever your latest bugbear is. Answer my point : why should I trust anyone except the government with my precious water, when they have proven themselves to be very reckless (as described in my previous comment)?
“What sort of Social Contract is it that doesn’t require my consent.”
Thing is, your parents accepted it for you. I would prefer it if there was an opt-out system, but we haven’t got there yet. The marketplace of ideas has been too slow-moving in that respect.
If you don’t like the social contract, move. As far as I can tell, social-contract-free places include parts of Africa, and Antarctica. Good luck. Be sure to send a postcard.
However, I still have received no answer to my cholera scenario, and my (I think) quite reasonable claim that people have a lot of reason to suspect that business doesn`t serve our interests unless it is forced to.
For the same reason car companies fit airbags to their vehicles. Selling water that is not going to kill you is a pretty good competitive advantage, don’t you think? Why does any product tend to get better and safer to use over time? Government legislation doesn’t tell companies to improve their products, a desire to make money is enough. Why do you think pharmaceutical companies bother researching drugs? Are pharma shareholders just benevolent, or do they see that there is money to be made from providing life saving drugs? Pretty damn selfish of them, profiting from you living longer, hey?
Brendan, tobacco companies did not provide safer products – they hid evidence of the harm their product was causing. I ahve given you 60 years` history of whole sectors of the corporate world hiding, defending and lying about safety and environmental damage. Go back to my example and explain how I can trust a large company like Exxon with my precious water.
I ahve given you 60 years` history of whole sectors of the corporate world hiding, defending and lying about safety and environmental damage.
And I have tried to demonstrate almost two centuries of selfish capitalists improving life for humans in the pursuit of the almighty dollar.
The fact that we now know about the health dangers of tobacco is testament to the superiority of the free market place of ideas. Tobacco companies could not stop anti-smoking lobbiests from demonising their perfectly legal product (and not to mention lobbying the government and getting advertising bans, compulsory warning labels etc. etc.). Even with all this extra information and scaremongering, people are still freely choosing to buy cigarettes. Are the tobacco companies evil, or are the suicidal smokers evil? Or is everybody evil and only through redemption of a government ban shall everybody be cleansed of their sin? Are people just plain stupid and not to be trusted, can not even the most concerted public education campaign prevent people from exercising their own free will?
Think about this. When the Exxon-Valdez crashed into the reef in Alaska, did they try to hide the environmental damage, or did they set about trying to clean it up? Compare this to the environmental track record of the state, from testing nuclear weapons in America, USSR, Australia, China, the South Pacific, India and Pakistan, to building environmentally disasterous and economically unsound dams in Egypt (Aswan Dam), China (Three Gorges). The state doesn’t have to say it’s sorry, and doesn’t have to clean up it’s messes.
Go back to my example and explain how I can trust a large company like Exxon with my precious water.
If you’ve ever bought bottled water, then yes.
Aghh! I’ve been moderated. Oh, the pain, the pain!
Aghh! I’ve been moderated. Oh, the pain, the pain!
Strike that, been unmoderated. Oh lord of the moderation, I thank thee.
Michael, “the way” I`m “going to go about it” hasn`t even been stated, so how do you know if it has been tried or not?
Well then enlighten us with your exciting new philosophy. I’m not saying you don’t have any new ideas, but I can’t form an opinion of them without knowing what they are! However, it might be the cynic in me speaking, but I don’t think your ideas differ too much from any of the interventionist variations previously discussed.
Wake up Dudes, this silly dichotomy between government and business. The problem is so bloody obvious. A. Camus, The Rebel:
The beggar starts by begging for justice and ends up wanting to wear a crown. He too wants to dominate.
The entire history of mankind, is, in any case, nothing but the prolonged fight to the death for the prizes of absolute power and universal prestige.
This childish point scoring game of govt vs. business forgets that in both cases it is people making the decisions and spare me the rants about evil bureaucrats etc etc. The problem is human nature not human institutions. “Everyone wants to change the world but no-one wants to change themselves.” Dostovevsky
The vast majority of pollution arises because people simply refuse to admit the obvious: you can’t keep pouring shit onto the planet and expect no downstream consequences. The fact is that scientists have played major roles in environmental causes, scientists not interested in ideology or point scoring but are intelligent and objective enough to know that the data clearly points to big problems requiring urgent action.
This is one of my big problems with the Libertarian perspective: this almost unbridled faith in business combined with the persistent condemnation of govt, unions, lefties, and just about anyone else who doesn’t fit into your tiny little box. Business, govt, greenies, whatever give people too much power and they can be real arseholes that do a lot of damage. *We* are the problem, not *Them*.
I don’t know how farming is done in Australia but in the USA we mine fossil water. That is, while some water for agriculture comes from rain and some irrigation is from water diverted from rivers, most of the water used in “the bread basket of the world” comes from pumping it out of aquifers under the ground. In the case of the midwest this is the Ogallala Aquifer which recharges at rate far less than the rate at which farmers are pumping it out.
How does a free market economy address this?
Currently in the USA we allow farmers to pump whatever amount they desire and as a consequence the water table is falling. (This is also the case in India and China.) At some point, there won’t be any left — thus the analogy to fossil fuels — at which time the USA will not only cease to export grain it will cease to be able to feed itself.
Maybe the first question is: should a free market economy even care about this situation? Is any sort of governmental regulation of fossil water mining just another form of unethical coercion?
The easiest first step to privatising infrastructure is just for the government to start charging like a wild bull for those times when that infrastructure is stressed.
So that with water its a matter of waiting until the rivers are below their average level and just charge like they are being sadistic about it.
With roads and rail its about charging like maniacs during peak hour. Then that enables you to charge like highway robbers for the use of the trains at peak hour as well.
That is the sides of the roads leading into town in the mornings and the trains leading INTO town in the morning but at that time the charges for trains going out of town ought to be nominal.
And vice versa during the afternoon peak.
Of course you’d want them to slash a bunch of taxes while they were doing this.
But if they over-charge during these times it will bring on the privatised alternatives.
Plus when the rivers were high people would take the opportunity to pump it up like crazy.
Justins right. Its just a problem of socialism.
Its got nothing to do with rainfall.
This is one of my big problems with the Libertarian perspective: this almost unbridled faith in business
It’s not an unbridled faith in business per se. It’s an unbridled faith in the human ability to further their own condition if they respect the individual and act rationally.
After all, if we didn’t have this rational, productive function within us we would have died out, or at best been just another species of monkey in the jungle!
[...] to S Lawyer for suggesting to me the post you will find by hitting this link. It is about water, governments and other things. Have a look. Ms Lawyer has a very interesting [...]
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Dead Soul — you are right to suggest that there is a natural tendency to want to control other people.
But you are wrong to suggest that the dichotomy is between government and business. There are many examples of non-government non-business activity and there are plenty of examples of government’s heavy involvement in business. The correct dichotomy is whether an action is voluntary or not. The opposite of government is not “business”, it is “non-government”, including family, red cross, garage sales & dog shows.
And there is nothing wrong with unions that come together voluntarily and act peacefully. The problem is that in the 19th century we had anti-union legislation and in the 20th century we had pro-union legislation.
A libertarian would prefer there to be no legislation regarding unions and allow them to live or die on the benefits they bring to their members.
Brendan, imagine my surprise when I navigated to that wikipedia page and found the section you linked to subject to dispute. You might like to try this from the PWSRCAC:
Note the use of the words “required” before Exxon Valdez’s responsibilities. They did not choose to clean up. Oh the differenc a word makes!
As for your description of the discovery that smoking kills as a victory for free exchange of ideas – that “free exchange” happened at universities, not in the businesses responsible for producing the cigarettes. And note that my question was not regarding who is “evil”, but who I should trust. Do you deny the activities of whole sectors of the corporate world in avoiding their responsibilities?
For example, regarding cars, here is a comment from the history of the Motor Vehicle Safety Act, and the organisation founded in 1966 (the NHTSA) with the task of forcing automobile manufacturers to incorporate safety standards:
“… Even so, they were opposed at every step by auto and equipment manufacturers…”
Do you deny these facts about corporate history? Do not weasel out of it by comparing to government negligence, we are talking here about the core of your ideology – market forces. Why should I trust big companies with my water given this history?
No one here seems willing to discuss this history of lying, obfuscation and ultimately forced compliance by whole sectors (automobile, oil, tobacco, manufacturing) of industry. Why not? And if you won{t admit it happened and is a problem, why should I trust your prescription for water?
With regards to the auto industry, people pay for the safety they want. Different people with different intentions buy the Subaru Liberty than buy the WRX. The WRX guy is spending more but doesn’t care that the safety rating is lower. The guy who bought the Liberty possibly chose it because it has the highest safety rating. Choice is good, and the WRX guy should be able to spend his money on performance if that’s what he wants. Safety would be in cars anyway because a lot of people want it. Also if you look at the ANCAP ratings the Subaru Liberty is probably the safest car in the country, and it’s quite affordable and costs well below luxury or sports models. No regulation would have bought this about. It’s due to a company trying to keep an edge though inovation in a vibrant market place. This research then permeates through the next generation of cars and everyone gets the safety, whether they’re buying performance or budget models. Furthermore, regardless of regulation, the best information regarding car safety comes from private voluntary organisations like the NRMA who make it well known what level of safety a car has.
So Flash, I don’t deny that the auto industry resists government intervention. Any industry that wants to get on with business will resist it. However safety features would still get into motor vehicles. And the highest levels of safety in motor vehicles was never put there by regulation. It was put there by companies doing expensive R&D to give them an edge.
I accept that many people (including people involved in business) have lied. If they have used lies to mislead people into forming contracts, that is fraud and is illegal (unless done by a politician).
I accept that many people (including people involved in business) have done bad things. And I certainly accept that many people (including people involved in business) act selfishly sometimes.
It of course goes without saying that politicians and bureaucrats also lie and do bad things and act selfishly. Unfortunately, these people also have access to the power of force.
History and theory suggests that the natural incentives that exist in a voluntary system should lead to a better outcome than an involuntary approach. Such an approach is also more moral.
The theory that voluntary interaction of selfish people leads to a good outcome is called “the invisible hand” and is the basis of much of economics. The explaination of the unfortunate incentives that exist in politics is the study of “public choice theory” and is relatively unambiguous in showing that politics does not maximise the “public good”.
In the example of a market for water it is clear that the government approach has made a simple error of introducing a price ceiling. The obvious consequence is excess demand and insufficient supply. The virtue of the market system is that the incentive to make money would lead them to set a market price without a demand-supply imbalance.
The benefits from the market approach don’t require anybody to be nice or benevolent or perfect or super-smart.
The problem with the involuntary approach is that it does require politicians and bureaucrats to be nice, benevolent and super-smart. Unfortunately, many fail to meet this criteria. It takes a very trusting (some would say naive) person to continue to believe in government control of economic resources despite the theory, history and reality that is lined up to show the failure of this approach.
John H.
The invisible hand is slow to grasp problems and it worth keeping in mind that the world is much more complex than in 1776, whether or not such vague analogies are appropriate in this day and age is problematic. Even the libertarian style(his definition) P. J. O’Rourke said Smith would be appalled at how we tolerate injustices in some countries in the name of economic progress. Too much hand waving, can’t get a handle on such a vague idea, cannot grasp why the invisible hand lacks the necessary substance to prevent abuses from business, government, or whatever.
I was a public servant for 10 years. Never lied to clients, never broke the law, always tried to act in the public interest. I worked for a major corporation, one of the biggest in the country. Saw them deliberately mislead their customers, treat some staff with contempt, and on one occasion even made some staff backdate documents to cover the corporation’s back. I came very close to going to the media on that one but corporations being what they are I couldn’t get my hands on the documentary evidence. I resigned.
I have seen workers again and again subject to unsafe working conditions, sacked because they had the courage to challenge wrongs, blackballed in industries. Unions do this, bureaucrats do this, but in business it is much easier to do. Approx 3,000 Aussies die each year from work related issues, the majority relating to toxic exposure. I have no doubt that toxin exposure is causing much more trouble than is currently revealed because there simply isn’t enough research on the issue. After all, who would be naive enough to think that a corporation would actually bother to investigate such issues themselves? Sometimes they do, often they just bury their head in the sand.
A current example. The research on trans fatty acids is very solid, has been for years. Dangerous stuff, one of my former collaborators once said to me that any food with trans fatty acids in it should be labelled with a skull and cross bones. Why won’t businesses eliminate TFAs from their products? Why won’t Abbott ban TFAs? Easy: costs too much money.
Dead Soul,
There are some relatively nice nations to live in and some utter hell holes. What differs between them is not the essence of human nature but the social institutions that prevale. Libertarians argue that it is free markets and respect for property rights and the idividual that make the difference. And socialists argue that it is something else. To dismiss the entire discourse and say that nothing matters because of corrupt and unchangable human nature is throwing out the baby with the bath water.
Do you think that the citizens of South Korea are richer than the citizens of North Korea due to superior human qualities? Or do you think the difference stems from institutional factors? I find the idea that such differences arise due to a variation in the quality of people is very flawed (not to mention outdated).
Yes people lie and cheat and steal. They do this under every system that has ever existed. However some systems are still superior than others in terms of generating prosperity and harmony for the masses.
Regards,
Terje.
I was a public servant for 10 years. Never lied to clients, never broke the law, always tried to act in the public interest. I worked for a major corporation, one of the biggest in the country. Saw them deliberately mislead their customers, treat some staff with contempt, and on one occasion even made some staff backdate documents to cover the corporation’s back.
Not saying that the corporation didn’t act immorally or illegally, but l bet it did more publc good over the same period than the public service. I also work with public servants and I am amazed at how bad they are at spending public money, despite being excellent at equity and diversity, having open and honest dealings with industry, and apparently always putting the public interest first.
I heard an interesting question a while ago: who has done more good for humanity, Bill Gates or Mother Teresa?
Michael S,
Gates or Teresa?
Doesn’t that depend on if you’re a Mac\Linux\pc user?
Well, I’m personally 70% Mac and 30% Linux. Don’t own a PC (but my better half does)……..and I’d still say that weasel Gates wins out!
Terje,
My principle argument here is that the market is often too slow and too “naive” to address long term issues that emerge from short term strategies. The synoptic illusion today is a bigger problem for the average consumer than it was 20 years ago. It is not possible today to make adequately informed decisions about a whole range of things, and a great many of these things can cost us a fortune down the line. Trans fatty acids are a good example of that. This problem of being adequately informed will only increase. I think it is a principle challenge to libertarian ideas and previously on this forum I have put forward one approach to address that problem. A commercial approach, not a government one. It is not enough to remove government interference and hope for the best, to promulgate libertarian ideas much more creativity is required, what we must do is demonstrate, in detail, how the market can address so many issues currently undertaken by government. But if we persist in simply stating, oh don’t worry, the market is much more efficient at solving these problems so when we remove the government hey presto the solutions will be forthcoming.
Whoops, forgot to end it(skipping between forums again dammit).
But if we persist in simply stating, oh don’t worry, the market is much more efficient at solving these problems so when we remove the government hey presto the solutions will be forthcoming
…
we will be laughed at. Rightly so, for our rhetoric comes dangerously close to that of socialists: don’t worry, the government will take care of it. Don’t worry, the market will take care of it.
More libertarians must adopt the attitude of yourself and John H. That is, instead of playing the blame game all the time, they need to turn their minds to creative approaches to addressing problems, not taking cheap shots at this or that. Now that takes considerable maturity and rationality.
Well the market is more efficient.
Lemma getting us into billions of dollars in debt for the infrastructure is the ultimate in hubris.
He lacks the ability to wave a wand in his meetings and influence the millions of people necessary to make that strategy work.
But if his first step is the one I suggest…. that is to cut taxes but crank up the prices in a way I outlined above… then the market will get to work solving the problem for him.
What can you do in meetings? You can run them with some efficiency, you can follow up on the action statements arising from them with some overkill, but its not magic.
Its not rhetoric we are talking here.
Its cold hard reality.
Cold hard economic science.
The invisible hand is very fast to move on things. But not if we don’t have clarity in property rights.
We need people working on caveated property rights for infractructure.
We need to get the light-touch-regulation right.
But I just don’t see economists working on this stuff.
Lemma is in so far in above his head with the idea that he’s going to borrow for the infrastructure…. Its just incredible.
A lot of us won’t be sticking around here just to pay these outrageous debts back.
I had an epiphany after I left. I recovered nicely, thank you. My brainstorm was- we already have a private water market! Mount Franklin water bottles are everywhere, and I know you can still get Perrier mineral water, if you wanted to drink a Frenchy product. I’ve never heard of any of these companies being sued because they didn’t care about the quality of their product, even though they are run by filthy capitalist exploiters, and not by saints from the government.
Any claim that this different to what we’re talking about is merely one of scale- a water market is already there, and could expand.
And I keep noticing that many nonlibertarians refuse to concede one of our points- that we are equally distrustful of governments as businesses! I converted Flash-heart to the libertarian cause when I made the point that WA Inc. proved that politicians can be just as unprincipled as capitalists, and he admitted that it takes two to tango- agreeing with me! Therefore Flash-heart must now be a Libertarian! (And whilst government action may have been responsible for controlling Cholera, it also banned DDT, and we now know that an outright ban was bad- better supervision would have allowed it to be used to control malaria, which is making a comeback in Africa. Only governments could ban it outright.)
Nicholas, John, you still haven’t answered my question. John, you used the “a few bad apples” argument in defense of my evidence that whole sectors of industry have been colluding in practices across time and place to hide the deadly nature of their product, resist entire theoretical concepts essential to our wellbeing, and refuse to implement essential changes. Nicholas, you use the ludicrous DDT ban example (not true) as a counter defense and both of you try again to divert the question to say “government is just as bad”.
We are talking about your prescription for improvement here, not the status quo. So John, can you find a way to show that my examples are just a few people lying? Given they occurred over 60 years and involved multiple sectors of industry, this doesn’t seem likely. Can either of you (any of you) explain why the models applied in all those different sectors of industry would not apply in water?
As defenders of market solutions and the superior moral outcomes that come from business taking over essential services, you need to confront, address and explain these examples. No-one trusts these corporations, and you need to explain why that distrust – gained from 60 years of watching bad behaviour – is wrong.
Particularly John, you have never addressed the global warming example. It is the most sophisticated example yet (although the smoking one is the most vicious). You need to come up with explanations for or solutions to this activity before anyone can trust your policy prescriptions, let alone your ideology.
DDT was taken out of the hands of the individual consumer was it not?
THATS-A-BAN!!!!!
Could and African with no government connections go into town and buy DDT at any generall store?
If not….. THATS-A-BAN!!!!!
Either fill me in on the proper history or lie about this matter no more.
“Particularly John, you have never addressed the global warming example. It is the most sophisticated example yet (although the smoking one is the most vicious).”
No I’m afraid you are in error on this matter. You are talking anti-science nonsense.
Do you have any evidence for the likelihood of catastrophic warming?
Do you have any evidence for the idea that a bit of human-induced warming during a brutal pulverising ice age is a bad thing?
Clearly you have been duped.
Nicholas,
Let me argue the other side just to be provocative.
The difference between competing companies that sell bottled water and competing suppliers that sell tap water to the home is the extent to which distribution channels are linked and the extent to which the product of the various producers gets mixed before it is delivered to the consumer.
So for instance if we had two water companies with two separate piping systems running to all the homes you would have similar competitive pressures and accountability for quality as you have in the bottled water market. However if you had a single distribution network (ie a monopoly in the set of pipes entering the home) and you only had competition at the source (ie between dams and desalitation plants etc) then you would have a quite different market because the products get mixed and their is no direct accountability between consumer and producer. Accountabilty is in that later case mediated by the monopoly owner of the distribution system. Now the distribution system may be a government monopoly or a private monopoly but either way it is not like the bottled water market because the bottled water market is not a monopoly.
There are certain economies of scale associated with a single reticulation system. I don’t know what the free market would do however I suspect that the reticulation system would continue to be mostly monopolistic in nature. Certainly far more so than in say telecommunications which broke that barrier with wireless technologies.
Regards,
Terje.
P.S. Of course with rainwater tanks and by trucking water there are alternatives to the fixed plumbing system.
P.S. Solving the problem of petro-chemical smog in cities makes the drinking of rainwater a much more viable option.
We can get three and four sources of water competing with eachother if at first we get all the local councils on board and if we get that massively high prices for pumping from any given river when its below its average depth…
… or when it is no longer running all the way to the ocean.
The high prices will bring the private competition if the local councils are all enablers for this.
As soon as any given river is then over its average level and the cost of pumping water out of them briefly becomes nominal then thousands of pumps will crank into action…. pumping the water into thousands of tanks that people everywhere will have invested in.
By making this water essentially a free good its clear that it is government that is causing the problem.
Same with road congestion.
Graeme, while your high prices method would provide heaps of incentive to diversify sources, reduce usage, etc, it is completely politically unfeasible because any government whether local, state or federal that tried it would be turfed out of office quicker than you can say “Do you have any evidence for the likelihood of catastrophic warming?”.
In a democracy you have to think about what is politically possible, as well as what is moral/efficient/utility-maximising. This is part of what Flash_heart is saying.
Flash_heart, you are carrying on as if you haven’t been repeatedly refuted.
Are you still running the line about how the reason we can’t abolish governmental ownership and control of water is that people will starve or thirst to death? Please admit that that line of argument was wrong.
Are you still running the line about how it’s ‘coercion’ if people don’t get paid for not turning up to work, because they would have to do something they don’t want? Admit that was absurd.
You are the one who asserted that government ‘represents’ society. Why haven’t you answered the question how a once-in-three-years election with all the issues bundled in together, can be more representative of what people want, than direct purchase of what they want, and not being forced to purchase what they don’t want? Why did you just evade that point? Were you hoping we wouldn’t notice?
If a businessman who has a direct material incentive in not poisoning his customers is not concerned about poisoning them, then why would a government official, who gets paid the same whether he poisons them or not, be any better proposition?
The status quo is that I have shown reason why governmental ownership or control of water should be abolished, and you have not shown any reason why it should not.
Petulance, name-calling, hyperbole, assuming what is in issue, evasion and sulking don’t count.
flash — I didn’t use “a few bad apples”. I accept there are liars in the world, but on the basis of overwhelming evidence and the theory I’ve repeatedly explained, markets & a free society are better than government at coordinating resources (including in the water industry). Talking about the relative merits of government v markets is not “diverting the question”. It is the question.
This thread has nothing to do with global warming, but I have addressed global warming (and smoking) at length in other threads.
No its not politically unfeasible as it comes with tax cuts.
This sort of thing has been done before.
All the subsidies come off and the prices rise and things are healthier from there on in.
So the tax cuts are dropped when the price “becomes nominal”? I thought you were advocating a very dynamic model, where prices would vary month to month. Hard to do that with tax rates.
John, you said “a few people lie”. I have presented you a great deal of evidence that it is not a “few” people in question, but a sophisticated network of colluding organisations who have spent a lot of moeny and time denying that their activities cause any harm. You will not address this. I posted a series of examples of corporations colluding to protect their business at the expense of human health, along with an example of exactly how they would do the same in the case of clean drinking water. You refuse to either a) accept that they do these things or b) address how we can prevent them from doing these things. Instead you (and others) argue against these facts from your untested theory.
The fact remains: scientists have repeatedly identified problems, subsequently proven without a doubt to be true, which have serious consequences for human health. Corporations – in whole sectors of the economy, not just occasional individuals – have denied the problem, fought against it, cried poor and attacked the messengers before finally giving in. They have in every instance been dragged kicking and screaming to change their behaviour by public and political pressure, usually at its strongest from governments. Smoking is the best example, but global warming much more serious. You claim that these same organisations – proven liars, with a history of sabotaging any science that conflicts with their goals – should be put in charge of a resource which is precious both for humans and the environment.
You really have to explain how they will behave differently this time, and if they won`t how we are going to control them. If you can`t do this you haven`t got a policy. Simple.
Actually governments have usually been dragged also. It is generally private groups that have raised the alarm and promoted the issue. And there is heaps of evidence of governments doing harmful things.
The problem is that those with the power to control (through coercion and violence) have historically not been reliable with that power. They may have done some good on occasion but on the whole they have done far more harm. In terms of institutionalising power there is no evidence to support the idea that giving more power to governments will on aggregate lead to better outcomes although it is obviously possible to find specific examples where it probably has. However most of the evidence points the other way.
This is a classic false argument of less government versus better government. I can easily support arguments for better government however I don’t think more is the same as better.
“So the tax cuts are dropped when the price “becomes nominal”? I thought you were advocating a very dynamic model, where prices would vary month to month. Hard to do that with tax rates.”
I am adovcating a very dynamic model.
And yes prices would vary month to month and incredibly abruptly at first until the private investments had been made which would have the effect of reducing the peak price AND smoothing out the abruptness of it all.
TRINIFAR- sorry to take so long to reply, but we have our own local nuisances to take care of. Actually, Australia has the same problem with our bore water- we’re draining the water faster than it can be replenished. I don’t know what the answer is either, unless it’s this desalination system that our politicians keep talking about. We’re having a State Election, so I don’t know if it’s all just ’spin’ waffle, or if there’s some serious ideas in there.
SAY TAYA- you’re right about the pipes, but perhaps people will simply order some water from the various competing water companies, and a truck will deliver all the water as ordered. Or piping could belong to the local Government, and companies could compete for business amongst the local utilities.
Flash-heart- I think we’ve argued each other to a stand-still. I am not going to embrace the state as my new best friend, nor am I a shill for evil, power-hungry business interests. I will continue to view them both as human groupings, and thus as out to get me. The only difference seems to be that governments claim and enforce a monopoly (of laws and interference) in an area, and businesses would like to, but have to put up with competition. Yes, businesses can be evil. I agree whole-heartedly. My mother died of Lung cancer, and cigarettes were a major factor in that. But governments can also be wrong, not just WA Inc, but Victoria years ago, when a State Government felt it could pick winners, and the whole state lost, and everyone had to pay.
Another definition of libertarian could be- ‘Someone who is cynical of anything big, economic or political!’
I doubt that retail consumers in a private water market would encounter much price volatility month to month. Like mobile phone subscribers they would be mostly insulated from price movements by retailers keen to maintain customer loyalty. Unlike the market for petrol a residential water market would be largely subscriber based.
Lets take this competitive infrastructure to its logical conclusion.
And we see that we might have 1-2 types of natural gas piped in… 2-4 electricity providers…. 2-4 optical cable links for informational services (ie TV, phone, internet)….. then we’d have perhaps TWO-TYPES of water with 2-3 suppliers for the low-grade stuff and 2-4 suppliers for the guaranteed high-grade stuff suitable for drinking….. then you might have …. 2-3 wet garbage and sewerage disposal competitors……
When we look at matters in this way we see that it is not really worthwhile to dig up the street and stick a cable in it and then cover that cable or pipe over with dirt.
It makes a lot more sense having comprehensive tunnelling for the big city.
And we just have to get the sort of norms of doing business for local and state government that will encourage a free enterprise version of INFRASTRUCTURE AFFLUENCE.
When Galbraith had that line about private wealth and public squalor he had a point. And I think its because we haven’t sorted out just how it is we go about giving investors…..
….((((in what has been thought of as INFRASTRUCTURE or PUBLIC GOODS)))))
….. the same sort of square deal that an investor has when he renovates his own business.
We need to get to a way of doing things that lets us crap all over places like Singapore, Amsterdam and Toronto, in terms of “PUBLIC GOODS” but have us doing things in a more free enterprise way.
With all those competing services potentially going down a single main street the local council of an inner city suburb may get a request from (lets say) an electricity supplier to dig underneath one of their roads….
….And then the council might say…. listen. We have certain charges and compensations we have to pay for blocking any road… And that will have to be taken into account.
…. But if you organize to not only dig under our road… But also to dig in such a way as we can potentially fit all these various services in the same tunnel and have tradesman walking around back and forth underground….
… Under those circumstances we’ll foot the bill.. and you will only have to pay the interest on the total it ends up costing you…
… And you won’t even have to pay that for very long…
…. Because as soon as we can get someone to SHARE this tunnel with you we will only charge interest plus 10% and we’ll split that cost between you and the new guy.
…. And then when a third guy comes along we will only charge interest + 20% and then we’ll split it all three ways….. So with three guys there you will only be paying 40% of the interest charge of the initial cost of the project….
>>>>>>>>>>
The deal would be that the provision of these tunnels was guaranteed to be financially self-contained for many years. Not using it to build giant libraries… But merely using it to start more and more tunnels and pay off the debts of the scheme itself and build up a fund for the starting of more projects of this same nature.
I want to point out that there are potential military implications to all this.
So you’re proposing government owned and built tunnels in order to fascilitate private sector competition in water, electricity and telecommunications. Oh and military manouvers under my front nature strip. Hmmm. I might decline on that option.
Flash: “John, you said “a few people lie”.”
Actually flash, I said that “many people have lied”. Now including you.
http://alsblog.wordpress.com/2007/02/26/governments-water-shortage/#comment-4932
We all accept that lying happens. Now we need to work out whether we should put more power in the hands of a violent/coercive institution (ie government) or put control back in the hands of organisations and people that can only act voluntarily.
You want examples of how the private sector works better — the world is full of them. Look at the market for food, flowers, cars, clothes, mechanics, haircuts, beer, steel etc. I don’t need to respond to every possible mistake or lie in history to be able to notice which institutions are better at managing and coordinating resources.
It’s strange that you bring up global warming again. Despite the evil energy companies, most people believe in AGW — which destroys your original point. And the activities of companies are not coercing anybody, which destroys your silly coercion point. And are you suggesting that energy companies should be nationalised, and that natinalised companies would act better? Once again you seem to be flying in the face of theory, reality and history. The simple fact is that the market system is better at coordinating resources for the best outcome. Your fear and irrational hatred of free & voluntary organisations doesn’t change the facts.
What exactly are you scared that the evil water companies are going to do anyway? Lie to you about fluride? Deny the secret links between water and cancer? Deny that water vapour contributes to global warming? Eat babies and club baby seals?
Right.
But one day we hope to go to freehold and natural law.
Everything I say is aiming at the potential for anarcho-capitalism.
And I’m not a gradualist either.
I believe in going hell-for-leather and freeing things up before we all get seriously old.
I’m not a gradualist…… I’m a MULTI-STAGE-TRANSITIONIST…
I want us to map out that multi-stage transition and go after it super-duper fast.
For example with the guns.
I want to have a situation where under certain conditions any bloke over 35… whose been resident in the country at least (lets say) 20 years… hadn’t been convicted of a violent crime in a similiar amount of time… has his weapons rigged so only HE can use them… has them secured where its very hard for people to thieve them… And has an investment in non-lethal weapons…
Well I’d want such a person to be able to put together a massive armoury.
I mean a real Soldier-Of-Fortunes arsenal.
And this is not gradualism. Because I wouldn’t want to add any restrictions that are already in place.
And if that was working I’d want to bring the age down two-years every year until some problems started occuring.
And I’d want to straight away open up all non-lethal weapons to everyone.
Now this is not gradualism..
But it is a multi-stage approach.
And I think this very-fast-in-all-areas multi-stage approach is the right way to go.
But it would make sense for the local councils at first to own the tunnels.
Until the tunnels were so ubuquitous that there was in fact some competition BETWEEN tunnels.
And then you could sell off these tunnels to small investors piecemeal.
You might start off with caveated and regulated property rights.
But its all aiming at freehold and natural law.
And when these tunnels are freehold and natural law with many tens of thousands of small investors owning these tunnels then there are defense implications you can bet on it.
It sounds a bit cooky to me.
For people worried about the increasing economies of scale from infrastructure leading to monopoly rents, there is an easy market answer.
If infrastructure leads to a monopoly position then there is an incentive to build the infrastructure. But if somebody else is going to build infrastructure and get monopoly profits then it’s in your interest to build it earlier… make a loss for a while (before the infrastructure is economic) and then get the monopoly profits. Then somebody else wants to build it even earlier. In the end, the lure of monopoly profits will encourage people to build the infrastructure sufficiently early so that there will be no monopoly profit (just a nomral market rate of return).
The consequence for consumers is that they do pay a price above the perfectly competitive level… but they get their product earlier (and to a higher quality) than they otherwise would.
By converting private monopoly to public monopoly we lose these benefits and decrease the incentive to invest in infrastructure. And there is precious little evidence that public monopolies run more efficiently than private monopolies at the best of times.
Private monopolies are more interested in profits that price. In the case of a water monopoly that sources it’s water supply from other private operators (eg the dam owner and the desalination plant operator) then it would be interested in the margin it could charge for each litre of water and the volume it could sell. The later tends to mitigate gouging on the former. Of course it could also charge a general flat access fee where gouging would be more likely.
As to Johns point above I’m not sure how this applies when it comes to privatising an existing government monopoly. Obviously the bid price for such a monopoly will tend to price out any benefit to the final operator but how does that benefit the consumer? There is no earlier building because the infrastructure already exists.
“It sounds a bit cooky to me.”
Its really the only way to go when you think about it.
You do want private competition between all the suppliers of these goods right?
And you do want small investors to know where they stand right?
Just think about it for long enough and it won’t sound cooky to you no more.
I mean they could sell these things off pretty early on in the piece.
But what you want is for the owners of the various pipes, pipe connections, optic cables, covered wires and so forth to know where they stand.
If you sell the tunnel off to Macquarie Bank too early they don’t have that clarity.
And the local council has to lock itself into a deal with these various investors contractually so that these investors know where they stand.
Because otherwise either the big boys or the council can just bitch-slap these people around.
So its down the track a long ways before you ought really sell all the pipes off as well.
When we opened up the telecom market we really screwed up.
Because we sold all the underground shit, and the telephone wires and Telstra as a single package.
But the initial idea is that you seperate it like 1. a road and 2. trucking companies using that road.
So you have your road owned at first by the government yet you have all these competing trucking companies…
…. And the privatisation of the roads has to be seen as a seperate problem. Don’t get me wrong. The roads ought to be privatised but its a seperate problem and by no means and easy one.
But with the Telephony market we sold of the roads and the trucking company to the same trucking company and then strong-armed that trucking company to let others use that road of his.
Now this was just silly.
This wasn’t the right way to go. Although on a superficial level it might have seemed to be a more FREE-ENTERPRISE way to go.
We have to work harder on privatising the road then we do the trucking company.
Now we eventually want it to be all freehold and natural law.
But we don’t necessarily sell everything off together and under the same regulatory framework.
So yes the tunnels would take a while to privatise into unregulated freehold.
You might sell them off under LIGHT-TOUCH-REGULATION so that the investors in the pipes know where they stand and can maintain and increase the value and capacity of their investment.
You can see that a totally unregulated competing tunnels scenario is some ways off.
Perhaps thats what you are thinking is cooky.
I wouldn’t say cooky. More just a long way off. I think some light-touch regulation would be needed for a long time to protect the pipe-and-wire investors who will be, after all, making the whole deal viable from the getgo.
Not necessarily. In some instances a monopoly makes much more sence. The question is whether the monopoly should be private or publicly owned.
It was the right way to go. There is loads of competition from alternate wireless technologies and the competition increases every year as the technology improves. And even without competition it still makes more sence to have it in private hands.
The structural seperation that you allude to was the same thinking that caused the privatisation of British rail to go so baddly. There is a good article on it here:-
http://www.libertarian.co.uk/lapubs/econn/econn091.pdf
The only thing I would have done differently with the Telstra privatisation is that I would have broken up the fixed line network into four or five national operators each with a different initial geographic coverage. The break up would have been such as to organise the operators like squares on a multi coloured checker board such that each operator was national in scope but only had about 20-25% coverage overall. Within a city like Sydney then all the operators would have a presence initially but in different suburbs. They would be free to overbuild new infastructure in neighbouring suburbs if they saw any competitive opening up. As such there would be the threat of wireline competition but without much duplication.
However I still think wireless technologies offers sufficient competitive threat. And Optus cable has increased competition in the major cities.
Well John, Nicholas and Terje, you are resting your entire faith in corporate control over vital resources on the back of a theory which fails to explain the actual behaviour of corporations over the past 60 years. Go for it.
John, I don`t have to provide examples of what the water companies might do; I merely have to point out that if a problem dangerous to human health or society arises, they are likely – on past form in every sector where it has been relevant – to lie, obfuscate and hide it; and they will only do anythign to fix the problem if a government or other powerful agent forces them to. I can, however, provide you with an easy example. We recently showed that human activity can affect the carbon cycle, and are still arguing with corporations and their shills about the obvious reality of this phenomenon. If in the future we discover human activity is affecting the water cycle, we will need to adapt our water extraction and consumption techniques to manage this. Based on the global warming experience, do you really expect me to trust corporations to do this? I really can`t be bothered watching a 10 year debate in which powerful corporate actors stifle important changes just to protect their profits, again.
Interesting factoid:-
SOURCE: http://en.wikipedia.org/wiki/Water_privatization
“We recently showed that human activity can affect the carbon cycle, and are still arguing with corporations and their shills about the obvious reality of this phenomenon.”
Dude.
Thats all a hoax.
I know where you are coming from but you ought to come up with a better example because CO2-emissions are good.
You might want to look at my multi-stage-transition approach.
I mean I don’t like the idea of selling everything to MacQuarie bank and these guys get all cosy with the politicians.
That not my approach.
But you have got to be quits with this global warming hoax.
We will be colder in the 2030’s then we are now and it won’t necessarily be very pleasant. And the climate may well start cooling a good deal earlier then that.
We are in the midst of a brutal, pulverising ice age.
This is what the science tells us. The leftist-alarmist lunatics posing as scientists might say something else but they are either idiots or hopelessly compromised individuals and you ought pay them no mind.
At least until they come up with some evidence for their crap.
John
Yes, because government fought the companies through its government-funded scientists and won a long, unnecessary battle which could have been avoided had the energy companies behaved better. Because they weren`t willing to, the interests of the people have been protected by an arm of government (the scientific research establishment) and by the many governments (such as Japan, NZ, the European nations, etc.) who were willing to stand up to the corporations.
JustinJefferson
I don`t have to answer this question, because I know that people do what is right when they choose to work in public office. You can answer the question yourself, though, by answering this related question: Why did the parish remove the water pump at John Snow`s request? They were being paid either way, and removing the water pump was more use than leaving it there. So why did they remove it?
Answer this question, and you have answered your hypothetical as well. I prefer to live in a society where people do things because they are right; not because they will be punished if they do something others don`t like. The latter society is a society based on fear (be it fear of litigation, fear of imprisonment, or fear of loss of income). The former is a society based on will, and the pursuit of ideals. Given our wealth and intelligence, people are very easily able to manage the problems which arise in the former society through mutual agreement. Given our selfishness and greed, we are unable to manage the problems which arise in the latter.
“In some instances a monopoly makes much more sence. The question is whether the monopoly should be private or publicly owned.”
Well thats A question. But its not the right one.
A private monopoly can only make sense when the monopoly has outcompeted all the others, evolving out of a level playing field.
So you therefore need the POTENTIAL for competition at least.
And we don’t have that now.
If under the POTENTIAL for competition some magnificent entrepreneur managed to buy up all the pipes well I’m fine with that.
But its no good if you don’t even have the viable realistic potential for many players in the first place.
No dude… you’ve missed the point of it.
Think of a powerfully effective big business.
No wait a minute.
Think of 5.
These marvellous corporations don’t come about by a one-off government sale to some deep-pocket consortium.
“In some instances a monopoly makes much more sence. The question is whether the monopoly should be private or publicly owned.”
Thats a very glib statement and someone like flash-heart is right to be dubious.
I think it should definitely go through a stage of many small players.
IF down the track some hyper-efficient big suppliers grew out of that well and good.
‘Yes, because government fought the companies through its government-funded scientists and won a long, unnecessary battle which could have been avoided had the energy companies behaved better.”
What on earth is all THIS about.
This is a total fucking fantasy. Thats not what happened.
What happened is leftist lunatics have launched this propaganda effort that has everyone duped.
They have no evidence for this hoax of theirs. And they have got things totally the wrong way round.
If you try and talk to the culprits they’ll cut you off just as soon as they figure out you know what you are talking about.
I SEZ:
When we opened up the telecom market we really screwed up.
Because we sold all the underground shit, and the telephone wires and Telstra as a single package.
TERJE SEZ:
It was the right way to go. There is loads of competition from alternate wireless technologies and the competition increases every year as the technology improves. And even without competition it still makes more sence to have it in private hands.
SO I SEZ:
Terje.
It WASN’T the way to go. It was far far better then not privatising at all. But they still screwed it up. Even to this day they have all sorts of regulations on Telstra and all sorts of community Quid-Pro-Quo requirements.
When you sell this shit off you have to do it right.
Of course it was good that they did privatise it. I almost think you are trying to talk as if I’d said that privatisation was a bad thing.
Privatisation is a good and necessary thing.
But they fucked this one up and we ought to learn from this.
The road and trucking analogy still holds. You seperate the socialist road from the socialist trucking company. You sell off the trucking company straight away and make it as easy as possible for private trucking companies to compete against the newly privatised trucking company.
If some massively successful trucking company takes up 90% or 95% of the business after a period of many small players competing thats fine.
So long as the regulations, or lack thereof, make it easy for 1 man with a truck and some savings to try and compete.
But the roads should be sold off and regulated SEPERATELY.
They may be privatised the week after or 5 years after but a great deal more thought has to be put into it and it must be done seperately.
Now its true… You have rail, airplanes, helicopters and so forth that can compete with the roads and you can have cars and taxis, competing with the trucks.
But you don’t jumble the trucking company up with the roads in the first instance or we have the ongoing problems that we’ve had with Telstra.
Where we have government plausibly and perhaps in-actual-fact having to strong-arm Telstra all the time to make this deal work.
Because now all the other telephony companies are reliant on Telstra to a very great extent.
And yes eventually the thing works itself out with satelites and the rest of it.
But we wanted the best way to do it and not the second or third best way.
And the best way was to seperate the trucking company from the roads in the first instance and in the first instance having a lot of little guys competing……….. And the big blokes growing out of the competition of the little guys.
Not having the big guys come out of a deep-pocket consortium picking up all the fat from a one-off sell-off.
Because that brings the already rich and the politicians together to make a killing.
And its a denial of evolutionary economics.
flash — you reject free and voluntary exchange because some people lie and because you disagree with what some people have said. Non-sequitor. What you say is not an argument for government ownership or control of resources.
Your rants against free speech are also based on a jaded and simply untrue reading of history. There is nothing to fear from free people or organisations saying whatever they want in a free society and no evidence that stopping their free speech makes a country better.
Free people aren’t perfect and neither is a system based on letting people be free. But unless you can give a reason why government ownership & control is better than voluntary exchange between free people (contrary to most theory, history & reality) then you aren’t making any useful contribution to the discussion of ideas.
Note the use of the words “required” before Exxon Valdez’s responsibilities. They did not choose to clean up. Oh the differenc a word makes!
You admitted yourself that the “required” clean-up scheme failed miserably. Exxon probably invested as little as possible to meet government expectations because that was all they had to do. And yet, when the proverbial hit the fan, a private company was able to mobilise a massive effort when it was clear that their initial “required” effort had failed. They could have gone to the government, cap in hand, and claim that they’d met government stipulations in safety – see we have a certificate here to prove it – yet they decided that from a commercial point of view they’d better do something about it.
I’m not claiming that the market is perfect, only that it is better than government solutions. I see you didn’t respond to any of my examples of state sponsored environmental disaster likes nuclear weapons testing and dam building? I might have added the state of Soviet oil industry before the the break-up, or China’s Great Leap Forward, which had people building smelters in their backyards. How about the release of cane toads in Queensland that have subsequently become one of the greatest threats to biodiversity ever faced in Australia? Tell me again how we can trust the government to not make mistakes? That is what you are claiming, isn’t it?
The fact is is that people are fallible, we do not deny that at all. The harm of people’s foibles are minimised when transactions are voluntary, both from a utilitarian point of view and a moral point of view. As Judge Kirby could well learn, there is a massive difference between catching HIV from voluntarily having unsafe sex, and having 19 terrorists fly hijacked planes into buildings. Voluntary versus involuntary, moral versus immoral.
‘I know that people do what is right when they choose to work in public office.’
Yes? The socialist disasters of the 20th century were just some kind of strange coincidence, were they?
How do you ‘know’ they do what is right?
Now I’ve got a home website! I’ll be writing in more regularly now.
Hey, FATFINGERS! My parents say they can’t remember ever signing no social contract, so are you lying, or just mistaken? As for Faintheart and Verdurous, they’ll be back, but I don’t think we’ll ever agree on anything. We Libertarians occupy the (de-)center ground, being decentralists, and are wary of left and right and heavy central parties. We’ll just have to agree to disagree.
Interesting article on page 5 of todays “The Australian” newspaper.
The article says the Brisbane gets most of it’s drinking water from the Wivenhoe Dam. The dam is currently only 19% full and Brisbane may soon face level 5 water restrictions (ie rationing). However in January 11% of the water consumed from the dam was used by the Tarong and Swanbank coal fired power stations during electricity production (ie it evaporated due to coal fired heating).
There is nothing wrong with consuming water in the production of electricity when water is plentiful. However when water is scarce it’s alternate use value rises. Under a free market price mechanism (or even a well setup regulated price mechanism) power plants would be discouraged from producing in such locations as the dam level fell, and where they did the price of electricity passed on to consumers would encourage conservation.
Whilst I don’t have all the relevant details at hand it does seem like Brisbane is burning coal to boil away a most precious water supply. It may be more appropriate to start importing some more electricity from NSW (and let national electricity prices rise accordingly).
If anybody knows what these power stations pay for the water they consume please let us know.
^test^
But we’ve got to get the pricing down to the individual river level.
On the Wholesale level, when the river is some designated amount below average the level, the price for water to be pumped from that particular river, ought to start rising exponentially.
What would happen then is the coal company would wind up buying and storing water when it could get it cheaply.
And when they couldn’t get it cheaply they’d alter their production processes some to get by with less of it.
The people who run the damn ought to be a seperate retail outfit who has to buy their water from the rivers according to the river level… just like anyone else upstream.
But we’ve got to get the pricing down to the individual river level.
On the wholesale level, when the river is some designated amount below average the level, the price for water to be pumped from that particular river, ought to start rising exponentially.
What would happen then is the coal company would wind up buying and storing water when it could get it cheaply.
And when they couldn’t get it cheaply they’d alter their production processes some to get by with less of it.
The people who run the damn ought to be a seperate retail outfit who has to buy their water from the rivers according to the river level………….. just like anyone else upstream..
Hard for the given technology. Steam turbines need boiling water. If the cost of coal plus water exceeds the price of electricity you are going to stop producing (and reduce consumption of water and coal). That would no doubt be the appropriate response if drinking water was running scarce.
One final example of bad government, as proof that politicians don’t always have the best interests of the ‘public’ at heart- the War on Drugs. This is a ‘War’ they can’t win, and won’t get out of, because admitting defeat would lose face. The ban on marijuana and other drugs was never about actual concerns, but about being seen to do something. The cost in terms of prisons being built and maintained exceeds any costs that de-criminalisation would bring. People do know, or can find out, about the harm that these drugs could do. And, just as Prohibition in America was a great boost to criminals, drug prohibition is feeding crimes and criminals.
Contrary to what some commenters want to believe, Governments can get it very wrong! (And I can recommend the video ‘GRASS’, narrated by Woody Harrelson, for a look at America’s drug history!) For a local look at injustice, read the book ‘Cannabis and Cancer’.
A recent report from the American Thoracic Society stated they found no evidence of lung, head, and neck cancers from smoking marijuana. Other studies have indicated that cannabinoids can be of benefit in regard to the following conditions:
some non-hodgkins lymphomas.
Dementia (Mole Pharm, Oct 6, 2006, where the results were better than all current drugs for dementia.
Parkinsons – can help prevent dystonias from L-dopa therapy.
Multiple Sclerosis
Cannabinoids have been demonstrated to have greater antioxidant potential than vitamins E or C (PNAS, July 1998, Hampson et al).
A CMJ study by Fried et al claiming that smoking marijuana actually increased iq scores. Hmmm ….
Asthmatics I have known claim that pot helps. This may seem strange but is concordant with the known effects of cannabinoids.
Glaucoma
Cannabinoids, via the cb 2 receptor, are strong anti-inflammatories, which goes some way to explaining their anti cancer effects because chronic inflammation is associated with cancer.
All off the top of this aging skull and I haven’t studied it in years so I suspect there is more to be said. All of the above is concordant with the known pharmacology of cannabinoids. Fascinating stuff but you won’t see any of the above in the wider press. The research community has been pushing for greater research for over a decade now. However the govts resist this and pharma companies aren’t interested because it is a natural product. No-one wins because governments like to talk tough about drugs and pharma companies are more interested in dollars than cures.
However, teenage smoking of pot is quite dangerous. It also appears to have a strong effect on academic performance. My personal view is that one of the best ways to ward off dementia is get stoned once or twice a week. The War on Drugs is driven mostly by the Right. Howard even tried to pressure the State govts into taking a stronger stance. In this arena Reagan was a complete idiot.
I smoked lots of pot as a teenager and it didn’t endanger me.
Interesting article on the war on drugs over at mises.org today.
Hiya Nick, thought you’d decided to ignore my aside.
“My parents say they can’t remember ever signing no social contract, so are you lying, or just mistaken?”
You really asked them? Or are you assuming? I have no idea who you are or who your parents are or what your family history is, but I can see one obvious way they may have accepted the contract – emigrating to Australia.
If they were born in Australia, then the social contract blame reverts to your grandparents. If not them, their parents. And so on.
I know you won’t accept any of the above, so what do you think about this hypothetical? Any other libertarians are invited to reply as well.
Libertopia reigns (if that’s not an oxymoron). A small group of people set up a commune, all participants uncoerced. They establish the rules of their commune as a social democracy, and children of participants are subject to the rules as well. The children can leave, but if they stay, rule-following only.
How is this different in principle to the government we have already?
Fatfingers,
It probably isn’t so different although few of our ancestors were actually consulted in this process. However whoever set up the system thought to include within the system the means to change the rules. And if they hadn’t done this we could always take it apon ourselves to launch a revolution (ie abandon the rules).
If our ancestors had decided that anybody that was black is to be a slave what would you do:-
a) accept the rule and be please about it.
b) fight to change the system.
c) leave.
We don’t have to accept the world as it is. We can work to change it. And as part of that process it seem entirely reasonable to use logic and reason to pursuade others to join our ranks.
I’m not a libertarian because of some notion that it is the apriori proper state of being ordained by God. I am a libertarian because all the evidence I have seen, as well as the best and most persuasive arguments I heard, lead me to believe that smaller government means a better society. In other words I am most certainly trying to leave the system we have but I’m not doing it via an airplane ticket.
In any case libertarians don’t regard children as chattels that may be bound by their parents contract. If you agree (uncoerced) that your first born child will live in my house according to my rules then that does not bind the child to the deal forever more. Humans are not merely the means for others to achieve their aims; humans are an end in their own right.
Regards,
Terje.
Thanks, Terje. You’re right about the origins of the modern nation state, which is why I said “in principle”. For your counter-hypothetical, obviously I would choose b or c (depending on my situation), because I’m not a monster.
Yes, the social contract is subject to endless change. This is one of its good points. That you seek to change it for the better is great. Rafe Champion is a strong supporter of a better one, too, not abolishing it.
Your point about libertarians and children is not as clear cut as you might think. David L thinks parents have the greater right to say what their children do than the state, and in general he’s right. But it has the corollary that children are subject to parent’s rule/whim.
There’s also the tricky subject of benefits received. Say a pair of parents move to Australia for a better life for themselves and their children. Their children benefit from Australia’s social contract. Should the children be allowed to exit the social contract without liability for those benefits? Yes, they didn’t agree to receive them, but that takes us back to the parents choosing for the child.
That said, it is the parents paying for the benefits through their taxes, so I repeat – I am in favour of an opt-out system at age 18, or whatever. I expect it would be fiendishly complicated, though.
Parents provide for kids (food, clothing etc) so parents rightfully have a greater say in the life of kids. Governments don’t feed anybody.
There is no “social contract”. There is merely a social landscape. You can be born in the jungle or the desert and you make the most of it, however it is not a contract. Likewise you can be born in a communist nation or a liberal nation but again it is not a contract. Contracts imply consent and agreement not resignation or indifference.
The term ’social contract’ was first mentioned by Hobbes, in his book about the state, called ‘Leviathan’, i believe. Hobbes extolled the state, and the king who was at its’ center, and claimed we were all bound to it, as man in nature outside society had a worse life than inside society.
As for opting out, I have fantasized for some time about starting a new libertarian nation in the Kimberleys. I chose this because it is remote, beautyful, and next door to Indonesia! As soon as we publicly declare Independence for Libertopia, we sign a peace treaty with Indonesia, and allow their troops in for friendly exercises, thus stalling the commonwealth until we get international acceptance.
Some how I don’t think they would wish to upset Australias territorial integrity in that manner. And how exactly do you “allow their troops in” without the okay from the Australian government. The government has a lot of hardware invested in preventing almost exactly that scenario.
Terje Say Tay-a, If we were a sovereign country, I think we could invite in whomever we want! That’s what sovereignty means! And that’s what we would be proclaiming in any declaration of independence!
And I think Indonesia would be glad of a chance to rub Australia’s nose in it- ‘How does it feel to lose a part of yourself, Australia? Remember East Timor?’
And I don’t know if Australia’s got the hardware to keep them out, not if we had surreptitiously built an airport before declaring our independence- then the Indonesians could be flown in, putting Australia in a quandary. Another reason for choosing a part of Western Australia is that The Principality of Hutt River is still there, and has its’ own website. This is the farm that declared itself independent in 1970, based on a legal loophole that may still be there. And if you read up on the American War of Independence, you will see that Power politics (dragging in other countries) helped the Yanks in their battles.
History shows that sovereignty means very little unless you have the capacity to defend it (or else allies that will). Maybe it should not be like that but it is. You seem to acknowledge this by hoping to cultivate favour with the Indonesians. However there is nothing in it for the Indonesians (unless they want to invade our new nation or else Australia) and so I can’t see why they would bother signing up to the deal. Also Australia would find the invitation of Indonesian troops to be singularily hostile and would terminate the project before it had even started. As much as I like the idea of starting a new libertarian nation I don’t much wish to get shot in the process.
You may however enjoy the history of Tonga which is I believe the only polynesian kingdom to have resisted being conquered by Europeans. It essentially did this by some clever treaties with multiple European nations.
I was speaking hypothetically when discussing all this, and I know it wouldn’t be simple, but if anyone did try to carve a piece of Australia off, that would be the place to do it- good water supplies, sun for solar power, and mountains you could defend from! It also has some bays you could convert into harbours, to start a city. Not easy, but doable!
It is also near to Indonesia, so you could quickly arrange a friendship treaty with them, and lessen Australia’s options.
I would have thought that Darwin would be the best location to start a libertarian society. Libertopia would probably be best begun as a city state, in the style of the Greeks. A libertarian revolution would generally have to start on economic terms, and setting up a special economic zone in the NT is in the realms of the possible and may even be able to generate bipartisan support. Imagine an Australian version of Singapore or Hong Kong, an economic powerhouse fueled by low taxation, stable law, easy access to natural resources, and independent of the state politics that blights the rest of the nation. It could fundamentally change the plight of native Australians through the demand for labour, even if Aboriginal affairs were still managed through Canberra, the wealth of Darwin might draw them out their imposed (self or otherwise) poverty.
The biggest problem with Darwin though would be the weather, classical liberal civilisations have thrived mostly in temperate climates, like Britain and America’s East Coast in the 18th and 19th centuries. Hong Kong and Singapore though do give hope that a tropical environment is not an anathema to economic development. Air conditioning is an important transaction cost in Australia’s northern climes.
I think NZ is the best bet.
I’ve always loved the idea of Darwin being (artificially) developed into a Singapore/Hong Kong/Dubai style trading port. This is exactly what Australia needs. It can have seperate laws to the rest of the country pertaining to things like trade, taxes, drugs, prostitution, alcohol etc. Darwin’s remoteness would mean that unwanted crossover into the rest of the country would be minimised thereby allowing the freedom to experiment with different styles of governance and for business to go crazy. Not to mention that it would be a Las Vegas style social/holdiay venue for people who like that sort of thing. Put in some protections for the local environment eg Kakadu, protect the locals by telling the guests and business residents that if they leave the city the crocodiles will get them, maybe pass a law or two on waste management and levy a 1% GST as the only tax, and then let nature take it’s course!
Artificially as in using lots of taxpayers money?
Artificially as in developers creating an amazing built environment, à la Dubai. Artificially as in supported where need be by things like a (privately owwned) desalination plant and maybe a nuclear power station or something. Artificially as in completely morphing the natural environment by doing things like piping sunlight into buildings through fibre optics or whatever to create really functional environments for business and pleasure.
Artificially as in giving people free reign to impose human creativity on the natural or existing environment within defined limits like the city.
I say artificially as, having spent a fair bit of time in Darwin and really liking the place, it ain’t going to be a Dubai without lots of artificial stuff. And Terje, although I know it might contradict all of my ‘tax, regulate and ban’ positions that I’ve argued in all my previous arguments, I’m not advocating spending tax payers money! I’m advocating government being kept out of the way! Wow, how unusual for me!
I’d call that real development not artificial development. However I was just checking.
I have been to Darwin once. I loved it. But then I love most places that I visit.
I’d call that real development not artificial development. However I was just checking.
I agree the distinction is a bit dubious. My point is if you tried to do a Dubai by redeveloping everything and creating your own islands etc, in other words completely change the natural environment, people get upset. However over time the city develops anyway and completely changes the natural environment. I reckon go in early and do it with a broad sweep, through only having laws that protect the external environment, but letting developers go crazy.
When I chose the Kimberleys, it was precisely because it is still undeveloped, and thus we could cheaply buy up andsettle the country we want with less difficulty than in an already-existing city, And we would be able to keep our long-term goals secret, with less other people around, until we declared our sovereign independence.
This was all based on the challenge of where you could start a new nation, starting of from libertarian scratch. I still think we could reform Australia, so I’m all in favour of working within existing societies, as well.
I think such a libertarian openings only really occurs when new frontiers open up. Maybe when we settle mars.
What a strange direction this post has headed in. The Kimberley’s, the Top End – all just waiting to be exploited- oops- I mean developed into a libertarian wonderland – as artificial as can be – completely devoid of any resemblance to their natural state. The illusion of divorcing oneself from nature. Hmm. The pilgrims all over again. Dare to dream.
Check this out:
http://freestateproject.org/
Anyway, what is your solution to our water shortages?
Dare to dream.
Beats taking the easy option and doing nothing because you don’t have the inclination, courage, morality or constructive nature to work towards improving your own condition. And heaps better than taking the pathic path of trying to dream up reasons why other people shouldn’t improve their own situations because you’re afraid of being left behind!
Claim Antarctica for fresh water, and ship the stuff over here! If the stuff’s just going to melt anyway, we may as well put it to use.
Nice to know you survived the Water wars, Verdy. However, the talk on the Kimberleys was mainly hypothetical (regretfully). If I were rich enough, I might try it, but only my dreams are rich, at present.
So I’ll stick to reforming Australia from within, by striving for less laws, and allowing private mores to predominate.
Have you guys looked into Second Life? I haven’t had too much time yet, but there’s a potential libertarian frontier right there… and there virtual dollars even have an exchange rate (ie, money you earn in-game can be exchanged for real-world cash).
Hey, Fleecer, you’re ripping us off! Second Life ISN’T REAL! Now if we could really move there, I might go for it.
Over 20 years ago my sister was involved in feasibility study of shipping ice bergs to the Middle East. Not feasible. However, to Australia is an interesting proposition but I imagine Melbourne would be the most northerly point.
Heh – yeah, I know Second Life isn’t real… and I don’t think they really consider themselves libertarian either – but it’s a virtual world with only a few rules, and one where people can make real money.
It’s an interesting experiment, and one I’ve been meaning to check out…
Shipping icebergs? lol… sounds expensive
Hey, here’s a thought… maybe desalination is the answer to (alleged) rising sea levels
The real money you make in virtual worlds is subject to real tax.
True – but it’s not taxed in game (As far as I know).
There’s an interesting question, actually: would it only be subject to taxtion in “the real world” when the value is realised (ie, when you cash out)? If so, then you only need to take it out when you want to spend it (and therefor only pay income tax on portion you spend).
In-game banks have already developed… though being a new world, there is some concern over which ones are scams:
http://iblsjournal.typepad.com/illinois_business_law_soc/2007/02/virtual_bank_re.html
That said, running a virtual bank could be interesting…
“Shipping icebergs? lol… sounds expensive”
My father was going to embark on a pilot study of doing that (to Australia) but was due back on the projected date of my birth, so was vetoed by my mother.
I was two weeks overdue.
I still think reform from within is the key! We need to make libertarian ideals seem preferable to real life! Perhaps an intelligent gamer could come up with Free Life, a virtual libertarian alternative to the mundane world, where we could explore libertarian solutions in a created environment. Then you could explore concepts like- what if Australia becomes the world’s first totally libertarian country- could it survive?
How about it fleeced? Do you know any games designers?
Nick, I agree with you. While that sounds far fetched now, as our ability to model things gets more sophisticated we will be able to demonstrate the viability of libertarian solutions.
However, I still like the idea of having a Hong Kong style enclave that has different laws i.e. less laws than the rest of the country. This would also demonstrate their viability.
Michael- I agree, but I think we’d need to start fresh, which is why I keep fantasizing about the Kimberleys. If we were to start an enclave, it would be better to be independent of Australia, so it could make and enforce its’ own laws. And, as I mentioned, the Big K has rain for fresh water, and lots of sunshine for power most of the year. I think the feds would claim that they’d supplied the railway to Darwin, and that we were getting fat off their equipment, if we just took over that city.
Time for bed. BYE!
Nah, don’t really know any games designers, but games design is a big project anyway… maybe somebody will, but Second Life comes close at the moment. In fact, it will be interesting to see how laws develop in this community… people are bound to start asking for “protection” sooner or later (but at least all “work” is virtual – so no labour unions)
I’m going to make it one of my exercises over the next few months to look into Second Life… who knows – maybe the virtual world will show us the way!
What seems to be missing is that water is a shared resource.
For instance when I divert say a river to my business I deny people downstream access to that water, similarly I would somehow have to prevent people upstream from diverting that same river to their business else my (expensive) operation would not have the raw material.
I could do this either by having a private army of mercenaries, or I would have enforce it in law. Now I do not think that private armies are a valid option, so we would have to make laws that allow some people to divert rivers while preventing most others to do the same. Thus competition would be highly limited by government, while enforcement of these laws would be a cost to the tax payers
As I see it, government will need to have a strong role in the water supply no matter if it is privately or publicly owned.
Of course if there is no rain, we would still run out of water! We could start recycling water or desalination, but both would be more far more expensive operations and only be profitable when there is a shortage of the current sources.
Just my $0.02
“What seems to be missing is that water is a shared resource.”
That is why there is a shortage of it.
Hers is something I heard recently- that the U.K. water market is already privatised! Is that right? Do we already have a working model we could point to? Can anyone tell us about this?
I read somewhere that it is cheaper and better quality and has less leaking pipes than the government run supply in Scotland. However I don’t know if this is true or if the benchmark is a fair one.
The market is an effective way to share scarce resources. It is far more effective than rationing. Price controls and below market pricing is generally a sure way to create a shortage. Look at the rental market in New York.
terje, Market pricing is just another way to ration water. It does not mean that government owned companies can not set prices according to the costs both operating and future costs. For proffit companies will benefit from a shortage and have therefor no financial incentive to ensure sufficient supply. Sure you could make laws to counteract this, but again who will enforce those laws and how long will those court cases take?
By the way I have not heard of a man made law that can make rain…
I have tried to outline some of the possible problems with private ownership of our water supply, I want to make sure that every one understands that I believe that 99% of business people are honest, hard working and mean to do well. We have to understand that whatever the outcome, there will always be possibilities of shortages and the cost of water is about to rise drastically since all the easy options have already been taken…..
Verzonnen,
Lets say that the pipes remain owned by the government (ie distribution and retail is government owned) and the government buys the water from private dams, desalination plants and recycling fascilities (ie production and/or capture etc is privately owned). Those private entities would have to compete and innovate to sell to the government monopsony on the basis of both quality and price.
Such a pricing arrangment might not be a perfect free market but it would give the government operator some clear signals about scarcity, some clear benchmarks on the cost of leaks and competitive supply alternatives. And if they largely passed the prevailing costs on to consumers (ie user pays) then demand would adjust according to prevailing scarcity.
In short I see no difficulties at all in privatising the dams etc. It is the privatisation of the distribution pipes that is arguably problematic.
Regards,
Terje.
“Market pricing is just another way to ration water.”
Privatisation of water supply gives people a profit motive to tap more sources of water. That is why it is so good.
When the price of oil rose, there was record levels of oil exploration. A market indicates by prices which resources are scarce and therefore need more production. What incentive does the Govenrment have?
Price also finds new supplies through elliminating waste. If the price goes up people fix leaks, turn off taps and find ways to reduce the amount of water used in their processes. They put in rain water tanks for the garden and grey water systems for the toilet. The example of water used in coal fired power stations is also an example in which the location of electricity production effects scarcity of water. If Brisbane drinking water becomes really valuable then it makes sence to produce more electricity in other places instead of using up Brisbane drinking water in local cooling stacks.
I did the sum recently and my house in Sydney (which is not huge) gets enough annual incident rainfall to supply 90% of my water needs. All I need is a tank to capture it and a pump (worth a few hundred dollars) to create pressure. Now at the moment this makes close to zero financial sence because town water is so cheap, however if the price of town water was to rise then this is an alternate source that would come online quite quickly (and then stay online indefinitely). It is how we got our household water supply when I grew up on the farm so it is hardly radical. It would also reduce pressure on the stormwater system.
With Sydney being one of the wetter cities in the world (more rainfall than London) it is crazy that we should have a shortage of water. The shortage is largely explained by three factors:-
1. Rain water tanks were illegal for so many years.
2. The government monopoly (Sydney Water) has not built dams as the population has grown and has been plunded for revenue rather than reinvesting it’s income.
3. Prices are too low and too fixed.
Terje, in reply to your points;
1) Are rain water tanks still illegal, if not why bother bringing it up?
2) Maybe that is the case, see my comments regarding “government monopoly”
3) We seem to agree that the price of water will go up regardless if we privatize or not.
I have tried to show that privatizing the water supply will still require a huge cost to the tax payer in new laws and enforcement of those laws. This will be in addition to the higher price of water. See my earlier post.
The term “government monopoly” surely is meant as a joke, as the government is all of us. If we do not like how our elected representatives perform we just vote them out. Then again I do agree that democratically elected governments are week on issues like these because they use the price of water to bash each other (like little children) in election campaigns and are not thinking long term. My preference would be to fix the politicians, maybe we could employ a kindergarten teacher to moderate their behaviour
But on a more serious note, how how are we going to deal with a private company when the owner decides to run the system into the ground and decides to go oversees after taking the proffits? Or when an oversees based company runs the system into the ground?
And the only way we could get true competition if we have multiple water pipes running under the streets owned by different companies, how will this increase efficiency? If we do not have multiple pipes who will own them and ensure that they do not leak and waste water?
I am not trying to convince you guys that private ownership is bad, to be honest I don’t even know if it is bad or not, but I do expect private ownership will result in more expensive water in direct costs and even more expensive when taking all the extra costs to the tax payer. However I am trying to point out some of the issues and costs associated with private ownership that seem to be overlooked.
If you or any one else think I am wrong on some or even all issues, please educate me.
“I have tried to show that privatizing the water supply will still require a huge cost to the tax payer in new laws and enforcement of those laws.”
How? Why does it need any laws other than general commerce laws?
“The term “government monopoly” surely is meant as a joke, as the government is all of us. If we do not like how our elected representatives perform we just vote them out.”
Okay, what could we do about terrible service from Telecom in the 1980s? What can we do now about Telstra’s reluctance to roll out genuine broadband…sweet FA.
“But on a more serious note, how how are we going to deal with a private company when the owner decides to run the system into the ground and decides to go oversees after taking the proffits? Or when an oversees based company runs the system into the ground?”
They get bought out…someone else pays the capital costs and bears the risk. Which is less riskier than starting a completely new business venture, which happens all of the time. How exactly do they accumulate massive cash profits while not maintaining the system?
“And the only way we could get true competition if we have multiple water pipes running under the streets owned by different companies, how will this increase efficiency? If we do not have multiple pipes who will own them and ensure that they do not leak and waste water?”
That is not true at all. Water being piped to you competes against wells, rainwater and recycling. Very few goods do not compete against substitutes. Furthermore, the duplication arguments are not complete. There may be a benefit in duplication as different systems (e.g, urban, industrial and rural) may have to be piped through the same area. Making them re-route arbitrarily isn’t efficient.
“If we do not have multiple pipes who will own them and ensure that they do not leak and waste water?”
Do you know how much water Sydney water wastes? Can you name any resource that gets wasted in the same way that has a market price?
Mark, maybe you missed my earlier post, but let me repeat it…
For instance when I divert say a river to my business I deny people downstream access to that water, similarly I would somehow have to prevent people upstream from diverting that same river to their business else my (expensive) operation would not have the raw material.
I could do this either by having a private army of mercenaries, or I would have enforce it in law. Now I do not think that private armies are a valid option, so we would have to make laws that allow some people to divert rivers while preventing most others to do the same. Thus competition would be highly limited by government, while enforcement of these laws would be a cost to the tax payers.
The term “government monopolies” is a joke! I explained that clearly. Fix the government if they make bad laws, legislation or contracts are needed to ensure sufficient supplies no matter who owns the water supply.
A private company could continue the current practises and do minimal maintenance thus reducing the cost, when there is a shortage of water it would raise the prices in order to ration water, when the system is in need of some major overhaul the owner would sell it of and walk of with the proffits, it’s not even illegal and business wise this might even be considered moral. The new company would raise prices even further in order to pay for the maintenance.
I have no idea how much water is wasted, but I bet it is a lot. lets spend the money and fix that as much is practical, you surely got my vote on that. I did found this link however; http://www.smh.com.au/articles/2003/10/21/1066631385778.html?from=storyrhs
I have no idea how they know it is only 10% Personally I suspect it to be a lot more. But my question was, who do you propose should own those pipes or should we have multiple pipes from competing companies?
If you are talking about recycling your own water and collecting water from your own roof as Terje suggested I am all for that as well. (Remember people, make sure the roof has no toxic materials on it) A well would not be limited in it’s collection area by property boundaries, I can imagine the court cases already..
But I think the only solution to a water shortage will result in having a massive over supply during the good years and regardless if we reduce our water usage by 75%, at some point in the future there will be a sortage again. And a shortage is good for business specially if it can raise the prices…..
“For instance when I divert say a river to my business I deny people downstream access to that water, similarly I would somehow have to prevent people upstream from diverting that same river to their business else my (expensive) operation would not have the raw material.”
Okay, how do you do that in the first place?
You have to own the surrounding land and so on.
1. Site values emerge as a kind of rationing system.
2. Since water downstream can be sold on later at a higher value if it is cleaner, there is an incentive not to pollute. This could be managed by forward contracts.
3. You can only do what is feasible. The costs of diverting water outside a natural watercourse are virtually prohibitive. Diverting the water elsewhere simply creates abundant water to where it is diverted.
“The term “government monopolies” is a joke! I explained that clearly. Fix the government if they make bad laws, legislation or contracts are needed to ensure sufficient supplies no matter who owns the water supply.”
You are pulling my leg aren’t you? How are the voters in Bourke going to influence decisions made with respect to the lane cove tunnel next Saturday? Keep voting the Government in and out to ensure cheap, reliable water 365 days a year? How is that going to work?
“If you are talking about recycling your own water and collecting water from your own roof as Terje suggested I am all for that as well. (Remember people, make sure the roof has no toxic materials on it) A well would not be limited in it’s collection area by property boundaries, I can imagine the court cases already..”
Is your roof toxic? Can’t you buy purification kits? Haven’t you heard of groundwater rights? Groundwater rights alter site values and therefore land prices help again to ration water.
“But I think the only solution to a water shortage will result in having a massive over supply during the good years and regardless if we reduce our water usage by 75%, at some point in the future there will be a sortage again. And a shortage is good for business specially if it can raise the prices…..”
We had massive oversupply in about 1992. We had floods and full dams. There was no incentive for the Government to build new dams though. Water tanks and private dams were restricted in NSW under Bob Carr (it was fairly wet in 1996 as well). How will you ration water or any other goods without a) prices or alternatively, b) queuing?
A shortage is not good for business. Prices rise because the marginal costs rise. What firm wants high marginal costs? Prices ensure that competitors see a potential for profits if they can lower prices and expand supply. This won’t happen in Government owned water suppliers.
Mark, it’s obvious that you are not willing listen, I have no idea what else to say that would show to you that in the case of water supply, private ownership will result in HIGHER costs in both the cost of water and the added increases in taxes! In the long term, private ownership WILL NOT prevent droughts.
I have always painted my roofs with a non toxic paint, that warning was meant for those who where not aware that roof paint can be toxic. I just did not wanted those toxins end up in our water, I was not using the water of my roof for my personal use.
New laws will be also be needed to make sure your private well does not run dry by a neighbour tapping more then their fair share and to deal with contaminants leaching into the soil. Good luck with monitoring how much water I pump out of the ground btw. If you meter my pump I would just drill a second one if I felt the need and have that one hidden so are we going to send the cops around to search homes to make sure we are not stealing water?
I also said that regardless if water supply is in private or public ownership the price for water will go up. So your objective of rationing water by price is met in either case. I just hope those on a pension can afford the water, else we will have to subsidize the water.
But since I am not getting trough to you Mark and you rather make it personal, I have to conclude I am wasting my time and this will be my last post on the subject.
“Mark, it’s obvious that you are not willing listen, I have no idea what else to say that would show to you that in the case of water supply, private ownership will result in HIGHER costs in both the cost of water and the added increases in taxes!”
Explain how.
“In the long term, private ownership WILL NOT prevent droughts.”
Who says we need to stop droughts – we need to harvest water, recycle it and manage it properly.
“I have always painted my roofs with a non toxic paint, that warning was meant for those who where not aware that roof paint can be toxic. I just did not wanted those toxins end up in our water, I was not using the water of my roof for my personal use.”
Are you too silly to buy a water filter anyway? No, of course not. Why bring it up?
“New laws will be also be needed to make sure your private well does not run dry by a neighbour tapping more then their fair share and to deal with contaminants leaching into the soil.”
What new law? Contracts are made all of the time and courts enforce them all of the time. Courts enforce tort law like trespass all of the time as well.
“I also said that regardless if water supply is in private or public ownership the price for water will go up.”
It probably should – but only private allocation will have incentives either through social aims or profit to expand supply and possibly have cheaper water in the future.
“I just hope those on a pension can afford the water, else we will have to subsidize the water.”
Make up your mind – do you want to ration water and have no shortages or do you want cheap water and shortages? Do you think less well of people waste resources anyway?
Hey, Mark, I suspect that Vernny is a closet Flash-heart. He should read some of the earlier comments.
Re Britain’s water, some comments to a query of mine in Samizdata.net leads me to believe that it was privatised, and there seems not to have been any great clamour to have it come back into public hands. Britain has more water than we do, and I’ve never heard of them having droughts, but the principle seems the same.
On English droughts: the area forming the old Duchy of Kent is actually a desert.
My understanding is that the annual rainfall in Sydney is higher than in London.
compared to
In other words the annual rainfall in Sydney is over twice the annual rainfall in London.
Terje, does this mean that we should ship our excess to London? Could we charge market rates?
Nicholas,
No. It means that nature gives us very little excuse for Sydney having a water shortage.
Regards,
Terje.
Access to water is a basic human right! See http://www.who.int/water_sanitation_health/rightowater/en/ . This is something private corporations or the free market cannot be trusted to implement.
[quote]“Privatization” of water services is often a controversial issue, and the involvement of the private sector in water delivery has accelerated over the past decade. In many countries, private sector involvement has extended beyond selling water from trucks and supply of infrastructure to the full operation and management of water delivery systems.While governments under international human rights law may permit private sector involvement, their responsibilities remain the same. Steps must be taken to ensure that the sufficiency, safety, affordability and accessibility of water are protected from interference as well as ensuring that everyone will enjoy the right in the shortest possible time.Where it is involved, the private sector should be encouraged by governments to participate effectively in ensuring people’s right to water.[/quote]
The assumption that governments are more trustworthy than private persons in safeguarding human rights is simply nonsense. The worst abusers of human rights are governments: they are orders of magnitude worse than private persons. Just look at the twentieth century. Only politically-motivated blindness, or sheer ignorance, could ignore this obvious fact.
The idea that governments are in a position to talk down to others from a position of moral superiority, or greater technical know-how, is nonsense too.
To refer to the UN’s pronouncements as an authority on human rights is nothing short of laughable. This is an organisation that gives equal voting power to states no matter how abusive of human rights they are. This is an organisation made up of the worst human rights abusers in the planet. The organisation that appointed Libya to the chair of human rights. The organisation whose peace-keeping troops stand idly by watching machete massacres, and then spend their spare time raping 12 year-old girls.
You are also ignoring the issues and begging the question. Even if water is regarded as a human right rather than a good or service, the question is how best to provide it. The idea that it can best be done by vast centralised government bureaucracies whose functionaries get paid the same whether they make the right decisions or the wrong ones, is wrong.
The irony is that it is the advocacy of governmental control of water that is causing the problems you are trying to solve.
Access to water is a basic human right! See http://www.who.int/water_sanitation_health/rightowater/en/ .
This doesn’t really mean anything. It’s like the UN Universal Declaration of Human Rights. A hodge podge of negative natural rights, good and bad ideas and nice intentions which allude to obligations on everyone and can be used to justify lots of bad actions. Just because it was created doesn’t make it a consistent philosophy that will deliver better outcomes. It’s no different to the standard socialist type thinking of legislating out poverty. It doesn’t work. It just delivers the worst outcomes possible and makes everyone poor but the corrupt and criminal elements. And then prevents people from being able to work their way out of the situation.
Putting a proper market value on water is one of the first steps to properly managing this resource. If society then wants to make it a ‘right’ (which of course it isn’t, society is just being benevolent) then give people the minimum amount of money to buy the amount that their ‘rights’ entitle them to.
Suzy, many debates have been lost because of inadequate definitions. If, by ‘right’, you mean that people should be free to look for clean water, then you are right. If by ‘right’ you mean that someone else, probably everyone else who makes up ’society’, is obliged to provide a product or service, then you should be using a word like ‘duty’, or ‘obligation’, or ‘onus’. And I say that you would be wrong.
If I, as a member of society, can be compelled to provide the wants, or the claimed wants, or needs of another human, in what way am I not a slave?
Isn’t freedom from slavery a basic human right?
Hasn’t it been 200 years since Britain outlawed slavery? If I can be obliged to cater for someone else, where will it end?
A libertarian might choose, of one’s own free will, to help someone who needs it, but that’s a lot different to being told by a mob (democratic society) to help another person.
Isn’t pleasure a basic human right, also? Are you good-looking, Suzy? A society dedicated to fairness might decide that you will make me happy by sleeping with me tomorrow, and a new, but uglier, man the night after tomorrow- I’ll only get real pleasure from having sex with a good-looking woman. Then I’d be happy! And isn’t happiness a right-duty-obligation?
Also, I have a basic human right to have surfing holidays paid for under compulsion by other people.
Justin – surely that is a universal right.
I’ve been pondering the competitive alternatives to town water piped to the home. One of the alternatives I mentioned already was rain water tanks for self reliance. The other option offered by Mark Hill (and others) was to have water trucked in. It occurs to me that having water trucked to the home is not really feasable unless you have a tank to store the water in. And if you have such a tank I have trouble seeing why you would not just use rainwater to fill it (assuming rainfall such as we get in Sydney). So it would seem to me that rainwater is the only real significant competitive alternative.
Wells?
Thanks Mark. Good point.
Although in certain parts of Sydney the water table is quite badly polluted.
Options then are:-
1. Town Water
2. Rain Water + Tank (trumps truck + tank)
3. Wells (not an option everywhere)
With any resource, paticularly with politically sensitive utilities and fuels it is my view that a neutral policy, encouraging the use of mnay alternative sources is the way to go.
This is simply because we need people to find out what the costs are.
It might be dirt cheap to use solar power to run a well and water purification system for someone near Macquarie Park. How could you generalise this for the entire Sydney area, for all of the different river catchments?
Having a range of alternatives which are chosen by setting market prices will be superior and generate more abundance as opposed to market prices for one line of supply.
What does this mean in practice with relation to the ownership of the existing town water reticulation system in Sydney, or any other Australian city?
1. That the retriculation system be allowed to have competitors such as wells, tanks and home retriculation systems.
2. That the retrculation system values the water properly. Better maitenence will follow and much of the water use will fall.
3. Sydney would possibly have private desalinators, if they could turn a profit without subsidy.
4. Reserves are no longer limited to rainfall, but various sources.
5. That environmental planning restrcitions go and dams may be built where property rights and water allcoations allow.
1. This appears to be the case already.
2. I agree this appears to be a problem at the moment.
3. Okay. Private dams as well I presume. Is this prohibited at the moment?
4. Understood.
5. Environmental planning restrictions may be a problem but surely they are a general problem effecting all manner of infastructure and not merely water infastructure.
Presumably their will be some discrimination applied to suppliers in terms of the water they wish to pump to the consumer via the common reticulation system. The water within that system gets mixed after all and the consumer has no way to reward or punish the source supplier for poor quality.
5. Agreed. I think this is a large problem for Australia.
If consumers start reducing net consumption of delivered water (via raintanks, wells, home retriculation and purification and higher efficiencies) without supplying water (ala selling electrciity back to the grid), then I would say the firm is punished.
Mark,
I’m working on the assumption that reticulation system is still owned by the government. So for instance if the reticulation system is government owned but the dams and desalination plants are private and some virus comes out the consumers tap they can only blame the manager of the reticulation system. They can’t pass their scorn back to the dam owner or the desalination plant owner. As such if the reticulation system is government owned it has a responsibility to manage input quality.
Even if the reticulation system is private the consumer still can only blame the pipe owners for quality problems introduced at the dam or the desalination plant because the consumer has no means to identify the source of any contamination.
I can’t see access competition working the way it does in telecommunications. So consumers that use town water and producers that deliver via town water piping are all beholden to the pipe operator. Consumers can only assess the service as a whole they can’t pick and choose between source providers on the basis of quality.
Regards,
Terje.
In short town water viewed from the perspective of the consumer is in essence one single supplier and not multiple suppliers.
N.B. It is different in Telecommunications to a large extent because they use a star topology to deliver services to your home whilst in network terminonology the water system is more like a bus topology. You don’t have a discrete pipe from your house back to some centralised hub. In telephony you have a discrete copper pair back to the telephone exchange and what you hook up to there is something that can be controlled on a per consumer basis.
Water tanks are pretty inefficient anyway – you get greater economies of scale from a new dam. The big advantage of water tanks for consumers, is that they have control of the water – they can wash their car, water their lawn 7 days, whatever…
At the moment, we have the ridicilous system of selling people water, but telling then what they can do with it and when. It’s irrantional.
Water is a bit more difficult than electricity… with electricity, essentially anybody can become a supplier by feeding energy back into the grid. You can’t do this with water of course because of the various quality controls (even getting a tank connected to mains for top-ups requires licensed plumber to ensure no backflow, etc)
With the water tanks – the freedom issue makes them a big plus for me, but I still think they’re not worth the money – even with the rebate (which is just wasting taxpayer dollars instead of my own). The other problem is, I simply don’t trust the government not to decide, at some point down the track, to start charging me for the rainwater I collect.
On an emotive level the freedom issue makes me want a water tank. I’d almost be happy if water prices went up enough to let me rationalise the cost. However the numbers simply don’t stack up at the moment.
“Water tanks are pretty inefficient anyway – you get greater economies of scale from a new dam. The big advantage of water tanks for consumers, is that they have control of the water – they can wash their car, water their lawn 7 days, whatever… ”
So they are good. Compare eating at a restaurant to eating at home, or buying food solely from large supermarkets compared to food vendors at sporting games.
Having less resttrictions on water from tanks makes it worth some extra money, yes (which says a lot, considering it’s of non-drinking quality), but the figures still don’t quite add up – even with the government rebate.
Plus, these advantages are artificial (since the water restrictions are artificial), and there’s no guarantees there won’t be restrictions/penalties/whatever applied to tanks in the future. That’s the problem when you have a system of arbitrary government intervention.
The cost of water needs to go up – even if this was offset with price reduction in some other government service so as to remain (mostly) cost-neutral, it would be a positive step… they could then eliminate restrictions, and with water charged at a rate higher than what it costs to produce more, you’d have companies falling over themselves trying to find solutions/new water sources.
“Water tanks are pretty inefficient anyway”
They are not inefficient for storing water if the water is pumped from a river when the river is above average level.
What we want is to charge for water coming from rivers on the basis of how high the river is. So that when its above average all the pumps start running. And people everywhere are filling up their tanks.
Dam owners are water wholesalers. Whereas the river itself is like the primary product that needs to be priced according to its level in the first place.
The price of water (from the various rivers) ought to be going up and down all the time in accordance to the various river levels and this will likely be reflected even at the retail level.
So potentially even people in the suburbs, seeing that the water price has suddenly dropped, could be rushing to turn the water on to fill their tanks, in the same way that people in the past have run to get the clothes off the line when it rains.
What I’m saying above brings into question whether the public dams ever really needed to be built in the first place. Whether they were ever economic. Since the water would have been privately stored if drawing from the rivers had been priced according to the method above.
hey, umm i dont really get this website coz im only on it 4 some assignment but i reckon the governments desicions are always stupid and worthless.Water should be used and taken care of responsibly and if they cant handle it thats there problem. i love zac efron so much and 4 lyf xoxox mwa mwa
Luv alwayz…rose xo
Water Available For Australians.
Political talk about water rationing is all the go. We are even having save the Water Week. Water Minister Malcolm Turnbull has not once mentioned the word dam. But he talks a lot about spending $10 billion on water rationing of the Murray Darling, which is about the only river system in Australia he seems to know about.
There would be something between 35 and 50 times as much water as is in the whole of the Murray Darling system running into various oceans north of the tropic of Capricorn.
Not a single word from any politician about that. And nobody talks about plans to harness and use it either. But in recent times entrepreneurs have been denied the right to do so.
Consider the magnitude of the available water in northern Australia’s river systems, against that of the Murray Darling Basin:
* The Murray Darling Basin (MDB): 22,700 gigalitres.
* Queensland’s north-east coast: 91,500 gigalitres – 4 times that of the MDB.
* Gulf of Carpentaria: 130,500 gigalitres – 5.7 times the MDB.
* The Timor Sea rivers: 81,200 gigalitres – 3.5 times the MDB.
* MORE GREAT WATER PROJECTS
1. Fitzroy River in WA.: The Fitzroy’s catchment area is larger than the state of Victoria; in full flood the Fitzroy’s volume of water is second only to the Amazon. It has an annual run-off of 8 to 11 million megalitres; by comparison, the Sydney metropolitan area has around 4 million people and uses one-half million mega litres a year.
2. Ord, Victoria, Daly Rivers: The Ord-Victoria Project could be one of the greatest irrigation projects in the world, right on the doorstep of Asia’s huge and growing population centres. Water expert Prof. Lance Endersbee recommends that the Ord and Victoria be developed in combination, on a vast scale; the Daly River has huge potential as well.
3. The Roper River has significant development potential.
And there are many more including the Fitzroy here in Queensland. It pours an enormous volume into the ocean almost every year.
327 words. Sent 19.10.07 [I sent this to that useless pest Malcolm Turnbull and he did not even acknowledge receipt of it.]
In response to the water tanks debate and takes being inefficient…I damn may be cheaper but as Justin points out in the original post, most of the dams are inland when all the rain and people are on the coast. By making people have tanks you not only make them responsible for their water usage, you are putting the collection systems where it rains.
On a side note i love it how the government spends millions telling us when and how we can use water, but then will water their parks and verges in the middle of the day in a howling breeze. No wonder we are in this mess!
Just out of curiosity, does anyone think privatising the River Murray is a worthwhile idea? The main problem I see with it is that since the owner would sell to the highest bidders, there is a risk that the ‘environment’ will miss out. That is, all the water may be sold before it gets to the river mouth.
Have a look at the Ok Tedi mine example in the other thread. Note the parties involved and those concerned and think through what might have happened if there was tradeable permits or property rights attached to the riprarian land.
[...] commented about this on a 2007 libertarian blog entry, “Government’s water shortage”, (can’t directly link to the comment, but mine is #218). A few of the libertarian types sought [...]
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