
Harvard Quietly Amasses California Vineyards and the Water Underneath - laurex
https://www.wsj.com/articles/harvard-quietly-amasses-california-vineyardsand-the-water-underneath-1544456396
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philipkglass
The aquifer depletion was caused _by_ irrigated agriculture in the first
place. It's pretty rich hearing vineyard owners like the Steinbecks complain
about Harvard buying land to take the underlying water. Until very recently
[1], profitable vineyards could deplete water under their neighbors' property
without limits or compensation. Profitable vineyards could afford deeper wells
and larger pumps; if it hurt shallower wells on nearby properties, tough luck.
My grandparents' land neighboring vineyards owned by the Steinbecks and others
underwent a distressed sale in 2013 because the groundwater had been badly
depleted.

The Paso Robles groundwater crisis is just the end-stage symptom of an
unsustainable process that has been going on for decades.

[https://waterinthewest.stanford.edu/sites/default/files/Case...](https://waterinthewest.stanford.edu/sites/default/files/Case%20Study%201.%20Paso%20Robles.pdf)

Irrigated agriculture came to dominate this region only in the last decades of
the 20th century. Relatives on my father's side started dryland farming on a
property near Paso Robles in the 1910s. That property enrolled in a well-
monitoring program in the 1970s. The trend line was clear by the 1980s: water
levels dropping over time. But irrigated crops like grapes were more
profitable -- at least as long as growers didn't have anyone pricing or
otherwise limiting groundwater withdrawal to sustainable levels. Now the same
growers who fought water limits are alarmed that Harvard might take the water
they counted on claiming. I hope that it's a wake-up call for growers to
support truly sustainable water usage plans, lest they lose at their own game
to even richer out-of-state entities.

[1] It appears that there are new limits on groundwater extraction for
agricultural use in California, but if I read the article correctly they're
not really enforced yet.

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sjg007
The "I drink your milkshake" approach to life.

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r00fus
While the scene from the movie was evocative, I prefer to use the original
term, _parasitism_.

~~~
rangibaby
what was interesting to me was the "milkshake" phrase is quoted verbatim from
something said by senator Albert B. Hall. He was jailed for accepting bribes
to sell US-owned oil reserves for cheap.

[https://en.wikipedia.org/wiki/Teapot_Dome_scandal](https://en.wikipedia.org/wiki/Teapot_Dome_scandal)

~~~
solidsnack9000
_Sir, if you have a milkshake and I have a milkshake and my straw reaches
across the room, I 'll end up drinking your milkshake._

[https://en.wikipedia.org/wiki/Albert_B%2E_Fall](https://en.wikipedia.org/wiki/Albert_B%2E_Fall)

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kylec
Financially, Harvard is a hedge fund that also happens to own a university

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ordinaryradical
I honestly think I wouldn't have a problem with this if they zeroed out
tuition for students. That is the glaring absurdity of the Ivy Leagues.

I was in a program that more or less guaranteed some portion of its graduates
to be perpetually in debt because the skills imparted, while taught by some of
the most brilliant practitioners in the world, did not translate into real
world earnings. I hate the idea of college being purely an exchange of money
for future earning potential, but programs like mine I think are unethical at
cost even as they are virtuous in learning.

Our culture needs non-STEM genius, that keeps the republic alive. Forcing
people into a cauldron of debt for it is reprehensible.

~~~
whitepoplar
I think we need to rethink the concept of a university from first principles:
How much does it actually cost to provide the best education in the world? A
sizable library, an old building with empty rooms, and professors? I'd bet you
could make instruction 5x better with 5x lower costs than we have today. The
real problem isn't building/finding a campus, though, it's figuring out how to
make the cheap version of Harvard more prestigious than Harvard itself.
Universities run on prestige and people pay vast amounts of money for social
signaling (to others and even themselves).

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coliveira
Ivy Leagues are clubs. People are not paying for education, but for the price
of participating in the club.

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Konnstann
Ivy League undergraduates are paying for participation in the club. Ivy League
grad students are paying (in the case of masters) for access to research
institutions with top PIs and vast resources, as well as connections in their
field.

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rdiddly
So if you have Harvard-type money now, you can buy land that will be
disproportionately valuable in 20 years when water is a problem. An excellent
and unusual example of wealth concentration... with a bit of a Dr. Evil / Lex
Luthor vibe about it too!

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cmuguythrow
This is the plot of Chinatown
[https://en.wikipedia.org/wiki/Chinatown_(1974_film)](https://en.wikipedia.org/wiki/Chinatown_\(1974_film\))

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seltzered_
Somewhat related to California Water: There’s a documentary about California
water use in Central Valley by land owners used for pistachios, pomegranates,
etc. being crowdfunded right now:
[https://www.kickstarter.com/projects/7331688/pistachio-
wars-...](https://www.kickstarter.com/projects/7331688/pistachio-wars-killing-
california-for-a-snack-food)

The story originated in the 2013 essay “journey through oligarch valley”:
[https://www.nsfwcorp.com/dispatch/oligarch-
valley/](https://www.nsfwcorp.com/dispatch/oligarch-valley/)

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petermcneeley
Harvard's average real annual return is 10.2% (Piketty's book "Capital" p569)
You need a team of very talented investors to get these types of returns y/y

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savanaly
Isn't that almost exactly what, say, the s&p 500 returns? [0] And you don't
need a team of anyone to buy and hold that.

[0] [https://www.investopedia.com/ask/answers/042415/what-
average...](https://www.investopedia.com/ask/answers/042415/what-average-
annual-return-sp-500.asp)

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scrumbledober
the real test is how well Harvard's fund does in year where the s&p 500 is
doing poorly.

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longerthoughts
No, the real test is sustained performance over time in the form of an
average.

If the S&P 500 falls 10% in a given year, I can hold 100% cash, light 5% of it
on fire, and outperform the S&P 500 - that doesn't make it a sound long term
strategy.

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incognition
Are we also omitting the fact that it's a nonprofit and therefore has grossly
better tax treatment?

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wheelerwj
thats not how taxes work... I am not a lawyer/cpa but if I understand
correctly, any investment income harvard receives would be taxed at the normal
rate for that type of activity.

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hunny9080
How much non-campus land does Harvard own? Their troubles with dealing with
their overseas land made the news earlier
([https://www.bloomberg.com/news/articles/2018-09-06/harvard-s...](https://www.bloomberg.com/news/articles/2018-09-06/harvard-
s-foreign-farmland-investment-mess)). Do other universities do this too?

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techsupporter
By way of further example, and because quite a few universities also do this
by "accident" of having land left over after either moving or redoing their
campuses, the University of Washington owns approximately 10 acres in downtown
Seattle, including (notably for various court cases about where the authority
of the university, as a non-political arm of the State of Washington, and
municipalities intersect) 4th Ave, a city-maintained street of public use.

[https://en.wikipedia.org/wiki/Metropolitan_Tract_(Seattle)](https://en.wikipedia.org/wiki/Metropolitan_Tract_\(Seattle\))

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oasisbob
Off-topic, but it's very normal for private entities to own public streets in
the US. At the time when these areas were platted and lots conveyed, the
streets were dedicated to the public use, but were not deeded to the
municipalities.

As a general rule, in most US states the adjoining landowners are assumed to
have fee simple ownership and reversionary rights to the land underlying the
streets. As a public policy matter, courts are loathe to create situations
where tiny little bits of land are separately owned and can't be put to
productive use. (the strips and gores doctrine.)

For WA, Holmquist v. King discusses this in depth.

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kolbe
[https://outline.com/CwVvyu](https://outline.com/CwVvyu)

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hiei
Thank you

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hervature
I thought I had seen this before:

[https://www.reuters.com/article/harvard-water/harvard-
buys-u...](https://www.reuters.com/article/harvard-water/harvard-buys-up-
water-rights-in-drought-hit-wine-country-idUSL1N0V02Z320150122)

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mooreds
If anyone enjoys dystopian science fiction, "The Water Knife" plays out the
groundwater/climate change scenario in gripping detail:
[https://en.wikipedia.org/wiki/The_Water_Knife](https://en.wikipedia.org/wiki/The_Water_Knife)

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sunshinelackof
I'm not sure how water rights work in California, but I think in many places
on the west (coast) water rights are not transferable to avoid speculation
over what--now more than ever--needs to be a public resource.

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zachguo
Is there any way for common people to invest in water assets or rights?

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s3xham
Freshwater speculation in the future is going to make a lot of people rich,
given the current undervalued nature of fresh, clean, drinkable water. The
kind that sustains life.

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peteretep
If I was a climate-change denier, this would probably make me reconsider that.

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slacka
Another source, with a softer paywall:

[https://www.thestar.com/business/markets/2018/12/10/harvard-...](https://www.thestar.com/business/markets/2018/12/10/harvard-
quietly-amasses-california-vineyardsand-the-water-underneath.html)

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true_tuna
Posting paywalled articles here is just advertisement for a subscription
service. Anyone who already subscribed doesn’t need discovery and anyone who
doesn’t can’t read the article.

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time-domain0
HMC appears to be exploiting Tragedy of the Commons for profit: they'll have
the most land and the deepest wells while homeowners run dry as they rush to
suck everything they can out of the ground as fast as possible.

