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I've never been as afraid of fresh water shortage as a lot of other people seem to be precisely because it is exactly the kind of shortage that is solved by market forces. Freshwater getting scarce? OK, so the price goes up. Now there's more incentive to conserve water by replacing fixtures for low-flow variants, letting your lawn die (why do you really need one in a desert anyway), and using more efficient irrigation methods in agriculture. The price of water still keeps going up? Then the price of meat goes up because growing crops to feed animals become more expensive, and people eat less meat. Meanwhile, increased price makes desalination more profitable, and more plants come online.

I don't see it as anything rising close to a civilization-ending threat. Seawater is abundant. Freshwater can be made cheaply enough. We are extravagantly wasteful with water as it is, and that can be fixed easily enough as it becomes more expensive.




Remember Arab Spring?

People in the West believe that it was about "freedom", but it was about food and life getting so expensive normal people needed to spend most of their salary just on it. Poor people not being able to eat well or not eat at all as there were no jobs.

People will revolt if they can't buy food because it is very expensive. That is the civilization ending treat: war.

War is really the worst experience you could experience. I will remember things I have seen in Congo all my life.

For example WWII was created because Germans lived a miserable life paying for WW1 and Great depression. Just interest in the WW1 debt grew faster than their productivity meaning they were slaves forever, just like Greece is today.

Americans were very careful not making the compensation for war for Germany excessive in order not to repeat History.

People will choose whoever person that promises an easy exit for their problems, and the easiest thing is to steal from others. You don't have water, you take the places that have water, like the Golan heights.

And that is war.

For market forces to work you need a long time. Inventors will only discover innovative methods after working for decades in a problem.

Letting your lawn die? This is a really stupid idea. I have worked in Sahara desert precisely helping people stop the desert just putting vegetation in place(that holds sand and makes soil so wind does not move it).


The Arab Spring happened precisely in those countries that were already totalitarian and dysfunctional anyway. If not this crisis it could've just as easily been something else, like what's going on in Turkey right now. A lot of the Middle East petro-states are only propped up by their oil wealth, the profits on which go mostly to the elites, with token handouts and subsidies for everyone else. They've already had to subsidize food and water for a long time in order to prevent their societies from revolting, and increased costs due to desalination is thus only a difference in degree, not kind. As for the World War II comparison, well, the world is simply different now in a huge number of ways. So while I don't disagree with the examples you bring up, I just don't see them being relevant to developed democratic societies, which I believe can solve these problems. A lot of the remainder already has problems anyway, and water scarcity is one of a laundry list of problems on their plate, which also includes displacement due to rising sea levels, climate change, you name it.

As for letting your lawn die, what I really meant but didn't say because it doesn't sound as pithy is to replace your lawn with landscaping or native flora that require much less water to maintain. There are many parts of California, Phoenix, Las Vegas, and other places that are all essentially desert, and rapidly tend back towards desert in the absence of voluminous irrigation. It makes no sense to waste thousands of liters of water per lawn per day keeping non-native grasses alive in the middle of a desert. For the cost of only several months' water you can replace your yard with something that doesn't need watering and won't blow away in a storm, the simplest and cheapest replacement being gravel.


>The Arab Spring happened precisely in those countries that were already totalitarian and dysfunctional anyway.

But they were nonetheless capitalist. There were market forces at work to fix the problem, but it failed . Which still is a powerful argument against your thesis.

Sometimes the hand of the market isn't sufficiently incentivized by starving broke people. Sure they would pay, but can they?


They were (and mostly still are) heavily statist countries. "Capitalist" they were only if you would think about this word as a scale. Like North Korea being slightly capitalistic.

Those countries though lack attributes of classical capitalistic societies like

- proper ownership titles and their protection from third parties, including the state

- low barriers for market entry

- free(r) flow of capital, including across their borders

All of these were practically absent in those countries. Good luck establishing your broadcasting service being a christian/jew/<minority> and without connections to the feudal rulers/police/military.

Which capitalist society does employ it's military to produce basic goods, like milk?


Were the actually capitalist? When I think of the Middle East monarchies dominated by an inherited nobility that controls all of the wealth and gives handouts to keep the lower class from revolting, "capitalism" is not what comes to mind.

I feel like I'm being mistaken for a staunch libertarian here, so I want to point out that I'm not that at all. I do think there is a big role for government investment to play in society, including in providing drinkable freshwater. This was the Israeli solution, and it's increasingly going that way in California as well. I'm not advocating for strict market-force-only supply-and-demand, but rather just pointing out that wasteful uses of water will go down as the price of water goes up, which it should be allowed to do rather than being subsidized in order to control wasteful uses. The cost of having enough water to drink and to cook with is measured in the low cents per day per person in the US. A single penny gets you over two gallons from the faucet where I live. And I'm in favor of safety net programs to prevent people from dying from illness, hunger, or thirst.


I think the point here is as in Israel, there needs to be a system, government, and culture that makes a free market possible. In the case where such a system is corrupt or instead offloads the costs onto another group of people, such a system falls apart and you have revolution as a result.


Exactly. While the parent comments correctly claim that many Middle-Eastern countries are technically capitalist, they do not provide a fair system where anyone with the capital can set up shop and start offering products/services. There is a large amount of bureaucratic red tape and often lack of property protections that scare away genuine capital.


At least to start, the problem was totalitarianism and corruption, not capitalism.

"But when he put them on sale, three inspectors from the council asked him for bribes. Mohamed refused to pay."

http://www.bbc.com/news/world-africa-16230190


That's crony capitalism, which is what you also have in Putin's Russia. The government decides which private enterprises will succeed, and in return the owners give the governmental officials their political support and immense bribes. It is not nearly as efficient and adaptive as the considerably less corrupt version of capitalism in Israel or the US.


I tend to agree. But the devil is in the details.

When it comes to agriculture and industry (the largest consumers, by far) demand and supply isn't as elastic as you make it out to be. And that's exacerbated by volatility, both in demand but especially in supply--a drought isn't always a slow decline or even a simple precipitous drop in supply but often manifests in wild fluctuations.

That kind of environment makes capital investments, including investments in such things as desalination and power plants, risky and thus quite costly. So it's no surprise that most of these desalination plants are either government owned or otherwise heavily subsidized. That's not exactly the outcome one would expect of the free market if it were as simple as implementing a proper pricing scheme.

Rather, I think the takeaway is that water is one of those areas that proves that while the laws of supply & demand are utterly inviolable, price signaling can't always be readily accomplished through basic monetary schemes. Because of far reaching and pervasive externalities that make price signaling difficult. (Consumer pricing is obviously well suited but only the tip of the iceberg.) And because the capital investments required push the envelope of what the capital markets can efficiently handle. And yet because water is so fundamental its one of those areas where even governments (at least, well-functioning governments) can be relatively responsive. Those that don't handle it well tend to be winnowed out rather quickly--either by change of government or just societal collapse.


Theoretically the volatility should be priced in to the elasticities (it's just a backward looking concept so providers of capital can see how erratic these demand and supply issues are).

Also what do you mean by the term "monetary scheme"?


By "monetary" I meant pricing in cash or equivalents, generally between individual economic agents. I don't know what the correct terminology might be.

I was alluding to the fact that politics is also a kind of market for price signaling. Regulatory schemes are a signal to either reduce supply (literally, as in the Federal regulatory scheme for the wholesale electricity market) or to otherwise stop externalizing some cost. Economists quantify that in terms of the effect on market pricing because it's a much more useful and mature model for analytical purposes, but fundamentally that's just semantics. Political power is subject to the dynamic forces of economic laws like anything else, we just lack the ability to quantify it as well.

I like to think of government as just another large firm, and its product is legitimacy. Government does have the power of violence, but from a regulatory perspective (as opposed to criminal law perspective) that's often irrelevant in the aggregate. For example, in San Francisco there are many thousands of illegal in-law units. But never would the government go around house-to-house to enforce the law, and rarely do so even when given notice. The politicians would be voted out of office the moment anybody caught wind of such a thing.

The problem with water is the externalities, some of which are extremely difficult to price. So it's irrelevant that we can use e.g. futures markets to mitigate volatility.

Imagine that overnight somebody said that Silicon Valley is unsuitable for technology firms. Everybody needs to get up and go somewhere else. We could probably price the immediate effect fairly easily--cost of relocation, for example. But now consider that the economy of the entire Bay Area and indeed of all of California depends heavily on the technology economy. What's the cost of all the unemployed engineers who didn't get relocated? The cost to the companies and people serving the tech industry? The cost to the state of not only lost revenue, but of past and present budget allocations. Of unemployment? Of crime? Of the path-dependent evolution of economies, generally? Some of that is impossible to know given our current understanding.

And how do we internalize some of the benefit that will accrue to where ever those companies migrate to? Theoretically that should be possible, and ideally that would be done to minimize disruption.

Now imagine somebody told you that if the government intervened and did X, Y, and Z, then the tech industry was viable and could stay, at least for the time being. At best everything will continue as before, at worst there'll be a moderately slow wind down. But in any event things will be much more stable.

What do you think is going to happen? Are we (society) going to choose to develop a futures market for pricing the volatility, or are we going to turn to government?

Whatever we do, the environmental forces against the tech firms will remain, it's the mechanisms we employ to manage the direct and especially indirect costs that is different.

That's water in a nutshell for many areas of the world. For example, the entire economy of the Central Valley of California is dependent on agriculture. In total dollars the immediate benefit of agriculture to the California economy is surprisingly small. But there's a reason California bends over backwards to sustain the industry. It's not just about corporate campaign money. Again, the industry is small by dollar amount. And if the costs of sustaining agriculture were so inefficient you can be sure other corporations would be using their political donations to fight such laws.

After all, it's _easy_ to import water. We don't need futures markets for water, or even to build desalination plants. Certainly not in California where there's more than enough water for residential use. The most efficient solution to drought is to import industrial and agricultural products which rely on water. But for various reasons there's a limit to how far countries wish to go down that track, or at least how quickly they want to.


> And that's exacerbated by volatility, both in demand but especially in supply

This is usually dealt within the framework of commodity markets and the purchase of futures, but you won't be able to buy water there. We have abused water as a resource and created water rights for millenia.

At least we're moving in the right direction now:

http://fortune.com/2014/06/25/water-futures-markets/


It might not be a civilization-ending threat, but it affects several outliers.

- If you live on less than $1 a day, rising food/water costs is a big deal.

- If you are in a land-locked country, desalination isn't an option.

- Desalination plants aren't built over night. In the meantime droughts would have consequences.

- If water became a major percentage of the cost of food, it would shift what crops are grown. Towards monoculture and away from diversity. The poor would especially be constrained.

- If we let our lawns die, we'll see more property damage due to soil erosion.


> If we let our lawns die, we'll see more property damage due to soil erosion.

Replace them with native plants.


Xeriscaping a lawn in an attractive way is significantly more expensive than laying sod or grading+seeding. Simply letting native weeds grow takes years and you're left with massive erosion problems in the meantime. In many locales, regulatory agencies will crack down severely if your yard is producing erosion run-off because it clogs sewer lines and clouds streams. A lawn of native weeds also looks pretty bad.

Xeriscaping is a fine option and when done right, it looks gorgeous...but doing it right is beyond the means of the average homeowner.


Laying sod, grading and seeding only became cheap due to volume demand and peer pressure; it could swing the other way, once momentum was gained. Lawn care could become more fulfilling in taking care of different plants. One man's weed is another man's salad. It's all in what you have become accustomed to in your life.

Personally, I have never maintained a lawn. Unlike my neighbors, I didn't cut down almost all of the native trees, so I have native landscaping, and it looks 100X better than flat, mowed lawn. It has wildflowers, and 'weeds' that flower and add to the beauty. I simply rake leaves in the fall, and keep my walkway clear to the house with stone from my property.

The way manicured lawns and homogeneous homes depicted in Tim Burton's 'Edward Scissorhands' film was spot on to me except in real life most condo communities would not allow the differently colored houses, or at least limit the palette. I grew up in Brooklyn, but found this out when I tried to change my carburetor in my mother-in-laws driveway, and I was told you cannot work on your car in your own driveway. No thanks to that life!


replace most of the lawn with gravel.


It's actually way cheaper to simply pave a yard on a new construction house with gravel than to sod it and install an irrigation system, which is essentially required in the kinds of deserts I'm talking about.

I know if I were buying a new house today, one of which had several hundreds of dollars per month in required water costs to keep the lawn alive, and one of which did not, I'm going with the latter one every time. Especially because you know the lawn is going to die on the former anyway at some point in the future when more severe water restrictions come into play and watering your lawn is (rightfully) prohibited.


We've done all three to our yard in Oakland, and its great. We xeriscaped most of our yard, with plants fed by drip irrigation. We put in a small patch of grass (about 300 square feet) with a sod called "native no-mow" that is literally that: it gets long and we don't mow it. We do have to weed it occasionally. The rest is covered in gravel.

The project wasn't cheap, but it wasn't that outrageously expensive, either, especially not compared to the cost of housing. We have to irrigate some, but nothing like what a lawn would need. And we have a nice outdoor space to hang out and entertain in, way nicer than concrete.


Or weeds. I've noticed parts of my lawn that got infested by chinch bugs died off but were replaced by weeds. The weeds were a combination of dandelions, clover, and other east coast weeds. I mow over the weed patches and they look just like cut grass. I wouldn't mind a whole weed lawn if the HOA and my partner didn't care as well.


Neighbours will complain and city will fine you. So better let the fucking lawn die. /sarc


A lot of cities in the US that are experiencing severe drought have prohibited watering lawns. So they won't fine you for letting them die, just the opposite -- they'll fine you if they catch you watering your lawn to keep it green.


City will fine you if you let wild plants grow instead of grass. So you will be fined either way - you have no option but let the lawn die.


What city will fine you for not growing grass?


We got fined for grass being too tall (Toronto). I assume if we don't have grass at all it will be the same thing.


Large swaths of Orange County.


"If we let our lawns die, we'll see more property damage due to soil erosion."

I've heard this before, and I've tried to imagine how that would work. The lawns I see in just about every city, most of them are surrounded by streets and usually sidewalks and sometimes curbs, too.

I try imagine what'd happen if the grass all just died and soil erosion started to kick in. Where's the soil going that's now going to erode? Is it liquefying in heavy rains and flowing up and away over the roads?

I just can't picture how lawns are doing all that much to prevent soil erosion, but would love a more detailed explanation.


Flash floods during monsoon season could definitely play their part in that, but I imagine wind has a lot to do with it too. Without grass to keep everything in place and help hold the moisture in, the wind picks up the dry soil pretty easily. Dust in heavy wind is kind of like a low-powered sand blaster, so property damage is a legitimate concern there too.


Yes, but it may destabilize the economy. The price may go up by such a degree that a significant percentage of the population can no longer afford food, which may lead to social unrest.

I'm not sure if your attitude, that supply and demand fixes everything, is the most probable outcome.


They're right, supply and demand fixes it - you price out the poor people, they die, then demand is reduced.

Capitalism usefully values human life at circa zero when resources are limited, or when there are lots of humans available to feed in to your luxury goods supply chain.

See, no problem.


It's not entirely zero though. I learned/was reminded of this by 'Capital in the 21st century': Poor people make up society, when they are pushed over a certain line of comfort they will apply pressure to the system to rectify.

In these situations rectification can mean one of several things: Decapitating all who are or seem to be in power or inflating currency until being rich loses its meaning.

Obviously those two solutions are not very attractive to the capitalist market players, so there is an incentive to form structure with the goal of sustaining society. Though history shows capitalist markets are not good (enough) at forming that structure (thus their heads roll).


Value, or market forces, supply and demand are inherent in any system where the numbers of people of more than a few are involved.

The poor don't get priced out and die as you write. A potential market attracts problem solvers, yes, to make a profit (not a dirty word always), and new solutions are found to new problems - that is technology. Sometimes it creates new problems, hopefully less of a problem, and the cycle continues. Look at Cuba for what happens when you are cut off from trade, don't allow individuals to decide what they want to be when they grow up, and don't utilize technology and your natural resources efficiently.

I don't think any system, Capitalism, Socialism, what have you, allow you to meet and greet 7 billion people and get to know them to determine what is best for each individual, so yes, I'll go with market forces, supply and demand unless you have the ability to create something from nothing. These things emerge for the most part, and are not fully intentional constructs.


No, you've never been afraid of water shortages because you live in a first world country and earn thousands of dollars per month, plain and simple. If you were living with 2$ a day and rising food costs meant a meal cost 3$ I would like to see you sing a different tune about "food is expensive? just eat less meat and let "the market" figure it out".


When prices rise, the result is that the poor have less. The poor will have less water and less food, and those that are already on the edge will dip below what they really need. "People" won't eat less meat; poor people will eat less meat. As the share of income spent on food is much higher for the poor to begin with, they will feel the worst of it. You really don't want to go back to the days when class differences manifested in basic nutrition.


You'll do massive economic damage that harms the poor if you price control or subsidise any commodity, including water. The economy is the way it is because of millions of individual decisions that factored in volumes of information that you could not fathom. Creating a law that with a stroke of a pen overrides the decisions of millions of people on resource usage, based on a simplistic formula created by a couple hundred people in a legislature, is incredibly reckless.


> You'll do massive economic damage that harms the poor if you price control or subsidise any commodity, including water.

That depends on how it is done, Venezuela showed how not to do it. I think a good option is to also provide commodities by non-profit companies run by the state and then use their costs plus a profit margin as a cap for commercial competition. If water, electricity and basic foods become too expensive people suffer and one finally will face revolts - which pure commercial entities are not necessarily incentivized to prevent (just pulling out of a market when the suffering becomes too great might be more cost efficient for them).


Venezuela did enough damage where it becomes obvious that intervention fails. Just because the damage done by intervention is not apparent, doesn't mean it's not there. It's the hidden damage, that is caused by milder forms of authoritarian intervention, like that seen in mixed economies, that is the most dangerous, because it is not diagnosed and cured so it continues sapping the economic growth of the country for decades on end.

>one finally will face revolts -

One should not be cowed into instituting authoritarian measures. If there is a law-and-order issue, that should be dealt with directly by punishing violent protest.


So the "most dangerous" interventions are the ones that are so subtle we can't see the damage they cause?

I would have thought the most dangerous interventions were ones that tanked the economy and caused widespread poverty and desperation. But yeah, slightly reduced economic output sounds worse.

I do love the untestable nature of this assertion, too. The underlying claim here is that all interventions cause economic damage, even if we can't detect it. This is analogous to claiming that microwave ovens increase the risk of cancer, even though we can't detect it.


Yes exactly. They are allowed to continue hurting the economy for decades.

>I would have thought the most dangerous interventions were ones that tanked the economy and caused widespread poverty and desperation. But yeah, slightly reduced economic output sounds worse.

The compounding effect of slightly reduced economic growth adds up to a lot over the long term. Much more than a big one or two year drop in GDP. You can do the math and see what I mean.

>The underlying claim here is that all interventions cause economic damage, even if we can't detect it.

To clarify, you probably can detect it but like all economic phenomena, we don't have absolute proof that so-and-so economic policy was the cause of the damage. We only have a reasonable cause to believe it is the cause.

The problem is that the majority of the electorate are not well-versed in economics so unless the damage is extremely obvious they're not going to react properly and correct the harmful policy..


Decades of sightly reduced economic output is worse than violent revolution? Really? Do you not place much value on human life?


There are better ways to prevent violent revolution than instuting socialist policies. Three decades of 2% lower per year economic growth adds up to 80% of the base year's GDP. I imagine that at a much lower cost, you could prevent revolution.

And you're totally misunderstanding my position. I am arguing for economic development because it is the most effective means of saving and enriching human life.


2% lower growth is huge. I'm pretty sure this isn't something that would go unnoticed for decades. You're arguing that minute interventions have enormous effects that everyone is just to incompetent to measure and so wet need to appeal to beliefs rather than data.


There is no way to easily show the electorate that the policies are responsible for 2% less growth per year. The policies that affect growth are instituted gradually over the course of many decades. It is not obvious that the growth rates would be higher if those policies were not in place and there are huge vested interests who spend considerable amounts of resources on propaganda to convince people that those policies are not responsible for slowing growth. So the electorate is not going to necessarily be motivated to repeal those policies.

>You're arguing that minute interventions have enormous effects

First of all, not all the interventions are minute. Social Security or Medicare redistribution, is not minute. But the effects take a long time to manifest themselves. Lower levels of private sector investment only manifest themselves as less growth in GDP statistics years later, and can even boost GDP statistics in the short run.

Second, thousands of minute interventions over the course of decades do have enormous effects.


> It is not obvious that the growth rates would be higher if those policies were not in place

You're right. It's extremely nonobvious, because you're not making an argument from a position of fact but from a position of principle. Which is my point.

If GDP is 80% lower than it should be, I think you'd be able to demonstrate that.

You know who had experienced absurd GDP growth? China. Not that I think the Chinese model is what we should strive for, but I don't know how interventionism is clearly bad when interventionist governments like China have been growing so aggressively.


>It's extremely nonobvious, because you're not making an argument from a position of fact but from a position of principle. Which is my point.

It is not obvious because it would require a person reading many pages of dense economic data. Obviously the average voter is not going to do that.

>but I don't know how interventionism is clearly bad when interventionist governments like China have been growing so aggressively.

China's economic growth increased substantially after it instituted pro-market reforms in the early 1980s. It also imposes far lower levels of income redistribution in the form of social welfare spending as a percentage of GDP.


> This is analogous to claiming that microwave ovens increase the risk of cancer, even though we can't detect it.

To be fair, the control group would be difficult to say the least. The same is true with the economy. So yea, it's very possible there are behaviors we can't detect.


> You'll do massive economic damage that harms the poor if you price control or subsidise any commodity

Source?

Is it possible the unfathomably complex economic machine will simply adapt to the subsidy? If the subsidy was limited to a couple liters per person per day (e.g., sufficient to ensure survival), could this be less reckless than letting people die of dehydration?


My childhood was during the last years of Soviet Union. I saw first hand how incredible was damage from price control and government distributing food and basic necessities. Everything disappeared. Often in shops there was only empty shelves and when thing came one has to spend hours in a queue. It is so sad watching Venezuela going the same path with the same disastrous results.


There's a vast continuum between the Soviet Union and modern Western economies, all heavily regulated. It's not a binary choice. Food, in particular, is subsidized in most prosperous countries. Today we know that both Soviet-style communism and Hayek-style free-marketism have the annoying tendency to result in people starving, which is why both approaches have been rejected by Western countries, that, in general, try to aim at some middle ground.


>Today we know that both Soviet-style communism and Hayek-style free-marketism have the annoying tendency to result in people starving

It's very annoying when people make bold statements like this without any evidence or factual support. Please provide some examples of free market economics leading to people starving.

>which is why both approaches have been rejected by Western countries, that, in general, try to aim at some middle ground.

I don't know if you know this but Sweden was the most free market economy in the world from 1870 to 1950. After it adopted social welfarism in the 1970s, its growth stagnated. It fell from being the third richest country in the world to the 17th. Imagine how much higher its standard of living would be today if it had maintained the rate of economic development it had in the early 20th century.

You assume that since Western electorates have chosen a particular path, it is the optimal path. I see that as hubristic.


> Please provide some examples of free market economics leading to people starving.

In a completely free market, how does someone without money not starve?

> I don't know if you know this but Sweden was the most free market economy in the world from 1870 to 1950. After it adopted social welfare is in the 1970s, its growth stagnated.

I have no idea if this is even remotely true, but I'll assume for a moment that it is. Does the fact that Sweden adopted welfare not tell you something about the consequences of their free markets? The free market was just so awesome that they passed welfare for all the rich Swedes who didn't need it?


You can't compare the isolated instances of people starving in developing free market economies, e.g. the US circa 1880, to the mass starvation and economic strangulation caused by communism.

>Does the fact that Sweden adopted welfare not tell you something about the consequences of their free markets? The free market was just so awesome that they passed welfare for all the rich Swedes who didn't need it?

People are shortsighted when voting. They are easily misled by election promises that give them short-term benefits at the expense of long-term development. In the long run it is much better to sacrifice short-term benefits for greater long-term growth period that will maximize the rise in standard of living and life expectancy.


Certainly I'd choose a free market over communist Russia. But I'd take modern American it European policies over the raw free market. I'd like to not starve if I go broke.


Because you have zero risk bias. Faster economic development reduces overall risk of mortality more rapidly than lower rates, and there is good theoretical and empirical reason to believe the unadulturated free market maximizes the rate of economic development. This holds true even if risk of starvation is not zero percent in an unadulterated free market.


Until you exhaust your resources. Then you just die.

The only thing a free market does perfectly is use resources as fast as humanly possible. Efficiently, of course. Why waste resource you can't profit from?


Even resource conservation is done better in a free market, because it responds to anticipated future shortages by raising the current price of the commodity, leading to more responsible consumption.


>Source?

This is logical extrapolation, and it's more or less validated by empirical evidence. It's not scientifically proven because we're dealing with incredibly complex phenomena where there are always potential confounding factors, but a reasonable case can still be made based on real world events.

See Venezuela for an extreme example of the consequences of interventionism.

The theory that intervention does harm is based on the fact that this complex system we know as an economy exists the way it does because of carefully weighted decisions of millions of people, each trying to meet their own needs in the most efficient manner available to them that does not cause harm to others (since harmful action is generally illegal in a market economy [there are edge cases of courses, like misleading advertising]). That carefully wrought symphony of welfare-maximizing human interaction is crudely disrupted by authoritarianism any time a legislature signs a law in effect that forces millions to act a certain way, that they otherwise would not have, or refrain from engaging in some voluntary interaction that they otherwise would have engaged in.

An authoritarian intervention to force several million to do some action to benefit several other million is going to have innumerable unintended consequences, that could not possibly be a net positive for the world.


Whoa, authoritarianism? Who said anything about authoritarianism? All prosperous economies are quite heavily regulated. You sound like that messianic group in the 40s and 50s of Milton Friedman, Mises, Hayek and friends who believed that the market solves everything. No one is proposing communism; no need to dig up the politics of the Mont Pelerin Society.


All regulations on voluntary market activity are a form of prohibition, where engaging in some voluntary activity is punished by prison sentences or expropriation of wealth. That is textbook authoritarian intervention. Just because it is popular and the most powerful countries do it does not mean it is not authoritarian.

I don't believe that markets will solve everything but I do believe that the best chance we have to solve problems is through voluntary market action as opposed to authoritarian action.


> That is textbook authoritarian intervention.

It's really not. It's not authoritarian when a democratically elected government creates regulations that it's citizens want. That's just governance.

Otherwise every law a government passes is authoritarian, in which case the word is meaningless.


Any law that punishes a voluntary action is authoritarian, whether it has a democratic mandate or not.

Not all laws punish voluntary action. For instance, a law against theft is not authoritarian.


Theft is a voluntary action. The thief is taking an action of their own volition. Your definition is flawed and meaningless.


I should clarify, when I say "voluntary action", I mean mutually voluntary or consensual action, where no one's person or property is violated.

The idea of being free to act in any way other than violating the rights of others (though violence, theft, etc) is a pretty widely accepted principle of a free society.


Nearly all laws are passed under the belief that someone is victimized when the behavior is but prohibited (or required).


The vast majority of such justifications are hollow, and usually premised on the idea that adults are too incompetent to make correct consumer, employment, etc decisions for themselves. E.g. laws against selling dangerous products like drugs to adults. The arguments for such laws are only appealing to the sound-bite digesting 20-second-attention-span crowd. I'd argue that they'd never stand in a court of law.


> The vast majority of such justifications are hollow

Eh, depends on the law in question. Banking regulations, for example, protect consumers and the broader economy from short sighted actions in the part of bankers. I don't think the justifications are hollow given the history.

> and usually premised on the idea that adults are too incompetent to make correct consumer, employment, etc decisions for themselves.

Well, if you believe citizens are too short sighted to vote rationally, then I don't know how you can argue that they are not too short sighted to make other decisions rationally.

But more to the point, some laws are truly intended to protect people from their own decisions (often in the context of hardships, such as usury laws), but many are intended to protect society as a whole, where the belief is that individuals are harmed collectively by the actions of others.

> E.g. laws against selling dangerous products like drugs to adults.

I don't feel like drug laws and market regulations have much in common.


>Eh, depends on the law in question. Banking regulations, for example, protect consumers and the broader economy from short sighted actions in the part of bankers. I don't think the justifications are hollow given the history.

A regulation that prevents me as an adult from investing in a high risk instrument is not protection against aggression (which is a justifiable prohibition). It is nanny state authoritarianism and denies me as a banking customer options because of an assumption on the part of busy-bodies that I can't be trusted to make wise investment decisions for myself.

>Well, if you believe citizens are too short sighted to vote rationally, then I don't know how you can argue that they are not too short sighted to make other decisions rationally.

Can't you see that this argument can be made more compellingly against your position than mine? If you think consumers are not smart enough even to make purchasing decisions for themselves, how could you possibly entrust them with to elect politicians that will impose thousands of force backed mandates and prohibitions on the economy, that intimitaly affect every aspect of our lives, and determine the winners and losers among thousands of companies?

Either we accept the precepts of liberal democracy, and assume an adult has a right to determine their own path in life, or we give into fascism and make decisions for them. If we choose the latter, there's no principled reason to preserve the right of the masses to vote.

All of the arguments given for prohibitions on mutually voluntary actions to "protect society" or "protect consumers" seems like hollow justifications for authoritarianism to me.


Justification for restricting individual actions should be based on empirical study of whether or not they harm others, not on an a priori creed that appeals some simplistic logic. What constitutes a free decision cannot be decided by the decree of a mid-20th-century fringe think-tank. For example (although this example, too, is very simplistic), capturing a bird and putting it in a cage restricts its individual freedom. But if it is discovered empirically that 98% of birds of that kind are unable to resist the draw to some sound at a particular frequency, then playing that sound is also a restriction of their freedom. In other words, "free" is not defined by math, but by the actual study of the behavior of actual people in actual societies. I'm not claiming that careful studies are always or even usually, conducted, but nor is it the case that freedom is defined arbitrarily.


>Justification for restricting individual actions should be based on empirical study of whether or not they harm others, not on an a priori creed that appeals some simplistic logic.

Harm others or harm themselves? Or are you referring to the restrictions themselves, and whether they harm others? I don't think the threat of imprisonment should be used to restrict human action that is nonviolent. This is not just libertarianism. This is common sense and basic decency.

As for private property rights and their scientific justification: they are the manifestation of the first possession principle that is found in game theory experiments to be an emergent behavior that maximizes social welfare, and which even other animals exhibit.

Violating property rights, by prohibiting financial transactions outside of state licensed banks, or demanding a percentage of all earnings made in private trade be transferred to politically appointed authorities, is often a great contributor to the concentration of wealth, and maintains the status quo, so your intuition that anti-authoritarianism and private property rights serves the rich is wrong.


Just to give concrete examples from humans, it is not clear to me why private property is an a priori untouchable liberty, while economic pressure is declared to be kosher and categorically different from physical pressure. Both require actual empirical study of their interaction with human behavior to determine which is an essential freedom and which isn't. In fact, there seems to be no logical justification at all for the categorization done in this Mont Pelerin tradition. Rather it seems like arbitrary choices that miraculously happen to justify the status quo, and ensure that the power of the rich (economic) is deemed ethical, while the power of the poor (numbers) is deemed an encroachment on freedom. This system of ethics is transparently self-serving.


> where engaging in some voluntary activity is punished by prison sentences or expropriation of wealth. That is textbook authoritarian intervention.

That's not what authoritarianism means. When society restricts some individual freedoms that's not always authoritarianism. You personally may not like it; you may be ideologically opposed to it, but that's not enough to make it authoritarian.

https://en.wikipedia.org/wiki/Authoritarianism

Otherwise, every possible society would necessarily be authoritarian for a simple reason: a society comprises more than one person. For simplicity assume there are only two. Either person A is allowed to do as they like -- including things that may restrict B's freedoms -- in which case the system is authoritarian, or there is some social mechanism in place that forbids A from behaving in this way, in which case the system is also authoritarian.


>That's not what authoritarianism means. When society restricts some individual freedoms that's not always authoritarianism. You personally may not like it; you may be ideologically opposed to it, but that's not enough to make it authoritarian.

I'm referring to the more generic meaning of authoritarianism, as in imposing authoritarian measures, from Google:

au·thor·i·tar·i·an adjective favoring or enforcing strict obedience to authority, especially that of the government, at the expense of personal freedom.

Personal freedom means being able to do anything you want outside of violating other people's person or property without their consent. The idea of being free to act in any way other than violating the rights of others (though violence, theft, etc) is a pretty widely accepted principle of a free society.

That means any consumer protection law, that restricts the right for a party to offer a particular product/service, by fining or imprisoning those who do, is authoritarian.

A law against theft or murder is not authoritarian.


> Is it possible the unfathomably complex economic machine will simply adapt to the subsidy?

Not only possible: it happens all the time. There are very few industries in the US that aren't subsidized by the govt one way or another. Agriculture and oil being one of the best examples.


We can safely assume, based on some sensible and self-evident axioms, that the adaptation is less economically optimal than the actions that would have been taken absent the authoritarian intervention.


>Source?

Any recent news from Venezuela.


That's such an easily solvable problem that I wonder why people even bring it up. Just distribute all the extra profit from the water sales equally among the population. The poor will get a check more than large enough to pay for the increased cost of water.

Alternatively you could just subsidize water use up to some threshold and then charge more for every additional gallon.


> That's such an easily solvable problem that I wonder why people even bring it up.

Edit: initially, I didn't think your first plan works, but then I realized people need water to survive. You can charge anyone an arbitrary amount if the alternative is death by dehydration.


I think he has a point if water market didn't need to generate profit for a private company.


So then you get to have all the fun issues surrounding nationalised utilities ! (nb I personally feel there are some things that should be public goods, water being one of them, but saying it's a simple solution is naïve)


The water can be nationalized. But the government still needs to put a price on it to prevent overuse. If the price is higher than the operating costs of the water system, then they have profit they can redistribute to the people.


Metering water seems reasonable but there are upfront costs to more widespread adoption (financial + political/social) + a bureaucratic layer (with all the associated complexity/corruption issues) that would need to be implemented for metering plus nationalisation, so while I'm [quite possibly naïvely] personally in favour, it opens a very large can of worms.


Your first solution sound like it would just inflate prices.

Your second doesn't appear to account for any cost increases except for directly used water.

This approach seems rather over-simplistic.


The first plan only inflates the price of water, but makes up for it. It's exactly equivalent to letting everyone have an equal share of the water, and letting them decide to use it or sell it.


But everyone can't have an equal share of water, because there is already not enough water to go around in the first place.

Unless you mean everyone will get only one cup of water. But then, the farmer will be fucked, because one cup of water is not enough to farm. And if the farmers can't farm, then you'll have another set of problems on your hand: NOT ENOUGH FOOD.


That's just nonsense. There is more than enough water for everyone's basic needs and then some. The problem is people using excessive water on their lawns, agriculture, or industry. And to some extent toilets, showers, and cleaning, which are all nice but could be reduced or cut in a crisis.

If a rich person wants to buy extra water to use on their lawn, they can. But they need to find someone willing to sell it, and offer them enough money to make it worth it.

If it really gets to the point there is only 1 cup of water per person per day, well then so be it. Everyone gets exactly 1 cup of water. That's perfectly fair. What's not fair is giving 1.5 cups to one person and 0.5 cups to another. Just because they are rich or a farmer or whatever.

Such a situation would create huge economic incentives to find more water, to conserve existing water, to reuse waste water, etc. The point is to get the benefits from a free market with incentives, but to distribute the benefits equally among the population.


I agree with the free market part. I disagree with the equal redistribution part.


Unless the efficient market hypothesis is bounded by time, it doesn't really help.

Saying that eventually we'll realize what the correct price for an asset should be is incredibly unhelpful if we've already done permanent damage to ourselves or our environment.


This is an excellent addition to EMH.


There's another side benefit to desalination that nobody seems to have mentioned here yet, which is solar ponds, as you can use the resultant "waste" brine to make the required halocline. Solar ponds are a means of generating usable energy from the storage of solar energy within a body of brine. Israel actually made headway with this tech in the 80's, but shelved it as there was no real urgent need for it - but there's new interest in it as a renewable energy source.

Anyway, wikipedia gives a bit more background: https://en.wikipedia.org/wiki/Solar_pond


There is a good episode of the podcast 'Econtalk' on this subject. My take-away from listening to that is that supply and demand and setting the price according to the supply would solve most of the world's water problem. Except that's not the way it's done.

They mentioned so many silly subsidies and flat out craziness going on in the water markets that it made templated C++ code seem sane in comparison :/


And how would you regulate the market? How about the poor?


With the poor you can give everyone a free allowance and charge over that. Regulation is complicated though.


Yup. The fresh-water problem is an energy problem, and it's getting solved.


I've always thought areas where desert meets the sea present incredible opportunities.

It has heavily under utilized land, abundance of insolation and plenty of water that could be desalinated

If we grew crops in these areas, then both food and water would be a function of energy.


This ignores another key component of agriculture- nutrients in the solid. Land that hasn't had a diverse ecosystem on it for decades isn't going to have the required nutrients.

Sure you can dump additives in the ground and boost this years crop but that isn't going to create long term healthy soil which can support farming. Fertilizers are just another dependency on fossil fuels.

Water is certainly a part of terraforming a desert, but only a part of it.


> It has heavily under utilized land, abundance of insolation and plenty of water that could be desalinated

Southern California is one such place where the desert meets the sea. It is not underutilized, but it is undergoing a massive drought.


It's also a pricing problem. Shortages happen when the price is not allowed to rise.


Well I'm glad you guys nailed the problem in three tweets or so.


Not all big problems have complicated solutions.


Then why aren't the big problems with simple solutions solved already? If your answer is something along the lines of "politics", or "coordination is hard", or "people are stupid", I'd argue that those factors are part of the problem and a solution should account for them.


There's a difference between solving the problem (which it has been) and municipalities/governments/etc thinking the solution is palatable.


Water rights are way more complex than platitudes pulled from a high school economics class.


Endless economic troubles happen when governments try to repeal supply&demand or deny its existence. A topical example is the drought in California mixed in with the political distribution of water rights.



Except the market doesn't let society prioritize. In CA, a big part of the water issue was what goes to humans vs farmers. That's not something that the market should be solving, that's for policy, because things like almonds being a status symbol in China cause major issues locally and distort the picture of supply & demand.


Even beyond that, lot of those farmers bought the right to access a certain amount of water when they bought their land. Taking it away from them is like taking property away from someone in SF because they didn't pay enough for it back in the 80s.


Eminent domain is a thing. When public good demands it (or when cronyism pushes it through), we do in fact take property from private citizens.

The idea that farmers' water rights are inalienable seems absurd to me. A state can be in a drought but farmers needn't curb their usage at all?

If each suburban plot of land in California hypothetically came with a guarantee of 100k gallons of water a month, there would be no doubt that this would be cut immediately when a drought hit. It's only farmers' lobbying power that stops their water rights from being restructured wholesale.

With that said, I do think agriculture rightfully gets a lot of water allocated. Much of it seems wasted, though.


Certainly eminent domain is sometimes necessary, and I agree some form of it will probably be necessary to solve California's problem, but I wouldn't exactly associate it with "letting prices rise" (the statement by the poster who started this line of thought).

The free market had its say when these water rights were sold, taking it back from them with eminent domain so we can charge more is not the free market.


Weren't these water rights sold a hundred years ago when the aggressive agriculture and population didn't exist?


When the government decides who gets water and how much and for what purpose, the inevitable result is inefficient use, gluts, and shortages, often at the same time.


Why is that inevitable? In fact most of CA's water allocation is driven by the free market (and local counties), not the government. Unfortunately it means that things like almonds get way too much water compared to what's useful by society or locals (since much is shipped abroad), and deregulation means farmers pump water from underground that can't be replaced for temporary gains. These are just some examples of where the market fails.

I suggest you watch this very informative talk by the water board director to the MIT alumni club last year to help clarify your POV: http://m.youtube.com/watch?v=rShYQVZvX-k


When people have pumps on their property that drain a common aquifer, it is a tragedy of the commons situation, not a free market one.

http://www.cnbc.com/2015/05/28/west-coast-drought-why-califo...

Doesn't look like a free market to me.


Demand curves are human idealizations. They are not real.


Energy is a huge problem in many areas where access to freshwater is threatened. Wealthy nations can afford to get their water in whichever way they want. Nobody's going to pay for a RO plant in, say, Syria.


I urge you to look at "Climate change in the Fertile Crescent and implications of the recent Syrian drought" [0] linked to in the article. It describes mass displacement in Syria following a severe 3 year drought, which in turn have contributed to the conflict there.

While not every drought is going to lead to a civil war its a dramatic example of how the type of market adjustment you are talking about is not a smooth, painless experience.

[0] http://www.pnas.org/content/112/11/3241.abstract


I'm guessing you haven't read the Grapes of Wrath? Any ideas why the Dust Bowl wasn't solved by market forces?

It actually was civilization ending in affected areas of Oklahoma, Kansas, and Texas. And the massive migration that ensued had negative impacts around the country too.


Market forces prevented the Dust Bowl until the US govt induced settlement by farmers who used techniques that were ecologically incompatible in the longer run. It was a mistake and civilization learned from it and resources were revalued accordingly. I suppose that the US govt is a market force of sorts, but probably not what the parent comment had in mind.


What happens if the [state|country] upstream taking water is the source of your shortage? What happens if you have no leverage to make them stop?



I'm in the UK, and recently tried to make sense of my water bill as I've a change in how our waste is managed. We are off the sewer network with about 50 houses with a treatment works. An annual water bill from average figures for our region (different water companies), is about £400 for a two person household and £600 for four. You pay more for your waste removal than clean water intake. Waste is measured against clean water intake.

We are now looking at a figure of over a pound per day for waste removal. The figure feels steep to me. If I could separate liquids and solids easily, then actually I could dump both in the garden. If you have the space then composting seems like a great solution. And would save flushing all that clean water down the toilet.


Modern plumbing, freshwater, and waste removal is literally one of the top five inventions of all time for increasing lifespan and quality of life. You don't realize how good you have it until you go try to live in a village that doesn't have freshwater or wastewater disposal, where you have to trudge miles per day to fill up large heavy containers from sources that are already polluted anyway, and that needs to be further treated with boiling before it's safe to use.

So in that context, it's absurd to think that £1 per day is steep to get all of those benefits. Back when I had a house our water bill was way more than you're paying, and I would've been willing to pay way more still. Having fresh safe water available at the flick of a tap whenever you need it, and all waste products disposed of without spreading contagion, is a modern day miracle.


Rather than a miracle it's a partially solved engineering problem. Using potable water to transport poo seems rather wasteful, when a low tech composting approach is rather simple.

Or perhaps the sewerage network should be replaced with a multi-purpose, transport network, or some other innovation.

You can process your own waste by pumping air basically through black water, all very good. But at the same time you can just throw a turd on the compost heap if you have the room, and nature will do its thing, and you'll build up your soil.

Education of good habits and some simple practice goes a long way.


Separett Privy 501 is a toilet seat that makes it easy to keep liquids and solids separate.

http://www.greenevelien.com/1Eco_3water.php#composttoilet


I'd have thought that was quite simple. My partner however has IBS, and each sitting is a shit storm. They have no control and that wouldn't work for them apparently. That's the biggest barrier for us.


The problem with this kind of thinking at least in developing and undeveloped countries is water is seen as kind of right and most of the time expected it to be free. Most of the time there will be a political out-lash if water is commodified.


Desalination plants are expensive and take a long time to build. It's not something that can be built to react to market forces. The Sorek desalination plant in the article started construction in January 2011 and was operational in October 2013 at a cost of 400m USD. It's owned by the government. So, really, the market did not solve this.


>> "do you really need one in a desert anyway"

Do you really need to live in a desert? Why would a human civilisation choose to live in a place that lacks an essential ingredient for life? It seems we choose to do this in deserts all over the world so there must be a reason.


First of all they usually settle within walking distance to a source of fresh water - some areas in Israel are the great exemption here.

And there is plenty of reason:

* historic: a lot of trade routes for sought-after goods went through deserts

* economic: rich fishing grounds just off the coast - see Western Sahara for an example (Boujdour and Dakhla being the main cities)

* economic: a lot of nomadic farmers live in deserts because they provide just enough food for the livestock

* politics: keep disputed areas occupied (Israel and Western Sahara as examples)

* politics: borders - these things tend keep people from freely moving to more hospitable areas

* nature: some think deserts are beautiful (count me in)

* spiritual: very low population density and a very tight connection to the forces of nature appeal to some people


Because it looks like human civilisations choose to live everywhere.


Because the desert might have other things humans find useful, such as minerals.


99.9% of the people living in Phoenix and Las Vegas aren't there to mine minerals. This is just a complete non sequitur. For an actual example of towns that exist primarily to supply labor for resource extraction, look at the Canadian towns in the Alberta tar-sands region. They are much, much smaller.


Many of them probably live in Phoenix in part because they like the climate--thus, there is something there that people find useful.


In The Netherlands they are testing the growth of potatoes on salt water.

So we can also try to adapt to salt water


That's because the salt water penetrates deep into the land due to the topography of the Netherlands.

There Dutch have practiced salt water farming and management for a long time. That said you can't drink salt water ;)


Strictly speaking you can drink salt water. But it wouldn't hydrate you since you would still be thirsty.


C'mon, everyone knows what drinkable water is. You can technically also drink boiling water, or battery acid for that matter, but nobody would classify those under the category "drinkable liquids" which is what we're talking about here.


Lots of food wastage as it is, so that would just close that gap. After the media panic wears off, it'd stabilize at a lower wastage rate.


Global warming will be fixed in the same fashion - via a mass market, technological solution.


There is one problem with that - the farms that have water rights that means they can make almonds in the desert.

If there were a free market for water I would agree with you, nothing in the world will end a shortage of anything faster than a free market.


If almonds grow better in the desert than anywhere else, then people should continue growing them there and import water from elsewhere. It's easier to move water than sunlight.


How does Dubai do this? I like the idea of piping water about, but could it change local eco-systems/weather?




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