that is kind of disconcerting here is that there are clear winners in the drought - people who have water rights and who sell these rights at record prices as it is just much more profitable to sell the rights than to put that water to productive use. I wouldn't be surprised if these people haven't had any effect on the state water politics.
On the other side, once price gets high enough, some enterprising folks will charter some big tugboats and start towing icebergs to CA :)
if somebody can use it better why would you get assigned rights to the shared state resource like water in the first place? It is not like the water is collected on your land or pumped from your well (such cases would have at least some logic behind it)
Because the state generally arbitrates what the 'best' use of a shared resource is sub-optimally, usually according to politics, rather than economics.
Hence when the state allocates water you get a situation where crops that would be grown at a loss when paying for water, like rice and almonds, are given severely discounted access to water to encourage misallocation of water from profitable uses to unprofitable ones.
In a market economy when someone does something stupid, like thinking it's a good idea to grow rice in a desert the market responds by making their business unprofitable. In a political economy when someone does something stupid, everyone else goes without so that morons can grow rice and almonds in deserts. Therefore almond farmers being somewhat non-moronic will sell their water rights to people who need to take showers rather than grow almonds because they are at least intelligent enough to understand that more money is better than less money.
For an example see, any centrally planned economy, ever.
> For an example see, any centrally planned economy, ever.
We're pretty centrally planned here in Denmark, and it works well. :)
The key is to centrally plan infrastructure, but not everything. Electricity, healthcare, heating, oil/gas production, transport, education, and other basic infrastructure is mainly centrally planned, but plenty of the economy isn't. Things are also not always centrally operated (transit is usually bid out to private companies to operate), but infrastructure, energy, and other common resources are generally centrally planned. I think overall this produces results that are less chaotic and short-term-profit-maximizing, and more sensible.
Central planners can also use market mechanisms where appropriate, so planning and markets aren't exclusive. For example, the university system is 100% public and generally rationally planned, but there are also market mechanisms within it that reallocate funds based on various metrics, such as tying # of admissions slots in various fields to employment outcomes. I don't think it's perfect, but I strongly suspect a laissez-faire market would produce worse outcomes.
(You do, of course, also need a functioning civil society, so that the planning isn't abysmally stupid, but that is basically a prerequisite for democracy to work at all.)
The key is to have a country 2x the size of Massachusetts (one of the smallest states in the US) — Denmark is the 133rd largest country. Using a country of your size with a population only 2/3rds NYC to argue for global planned economies is incredibly disingenuous.
A more apt comparison would be China or the former USSR.
Rather than consider the USA as a single monolith and comparing to a single European nation like Denmark, compare to the equivalent monolith (the EU has 46% of the area, 158% of the population, and 103% GDP of the USA). Most EU countries have heavy central planning for all the things _delirium mentioned, probably all EU countries if you use the USA as a baseline.
Right, the EU is more applicable if you compare each country to a US state. US States typically do have central planning, like doling out these water rights.
Yes, I think generally medium-sized countries make more sense than giant ones, for many reasons. Though even the U.S. can do central planning when it wants to—the interstate highway system is an example.
As for China, we'll see. It's a huge country that I think would be chaotic under just about any system, but their current vaguely mercantalist, sort-of centrally planned quasi-capitalism is doing reasonably well, producing strong economic growth— with its attendant social problems. Would a fully market-oriented economy without the strong role of the state work better? I don't honestly know. I don't know how you'd even go about testing that kind of counterfactual.
If you want a vivid illustration what the free market does to a product, which is a natural monopoly you need not look any further then the UK train system.
It's not only considered the most expensive, but is also in line for the price of the most atrocious train network anywhere in Europe.
Another great example is broadband in the US.
Both are market economy in action.
Now, I'm not claiming that centrally planned (and usually government operated) infrastructure is the best choice in any case. What I do argue, however, is that there are a lot of examples where the free market doesn't know best, enables operators and companies to make indecent and unfair profits, while shafting the populace at the same time.
> For an example see, any centrally planned economy, ever.
Just an example to counter that absolutism: The city of Prague has one of the best public transport systems just about anywhere. You can get to anywhere within in the pretty big city by tram, bus and metro. Day and night.
It could never provide this level of service if it would be forced to operate under free market forces.
Yup, free markets love monopolies. Government regulation is necessary, but it should be aimed at stimulating competition, not protecting vested interests. Of course, in the real world corporations have shown themselves to be rather gifted at regulation capture, so we often see governments providing regulations that harm consumers in the name of protecting producers.
I'd guess that the rights were assigned in the past, and they made sense then. In the present there are different, better uses for the water, but the rights have not been reassigned.
On the other side, once price gets high enough, some enterprising folks will charter some big tugboats and start towing icebergs to CA :)