The drought in Georgia is causing Atlanta to panic. The typical governmental solutions are being used: banning watering lawns, etc. So of course the main source of water for Atlanta is 15 feet below average and they may in fact have only a few months of water left. What Atlanta (and it seems no other city) has tried is this: raising the price of water. If you have a shortage of something, the price of that thing should go up, since the supply is down relative to demand. Raising the price will reduce demand. If there were a free market in tap water, this wouldn't be an issue, and I wouldn't have to be on here talking about something that is obvious to every Econ 100 student within the first week of class. But since this is something regulated or directly controlled by governments across the country, we do have to talk about it. Why won't politicians allow prices to go up? They don't want to hear complaints. I guess it's better to let people not have water rather than lose a vote or two. That's because our leaders 1) are cowards, even in the face of a crisis (which wouldn't be a crisis if it weren't for them, by the way) and 2) are too ignorant of economics to have been elected in the first place.
You may guarantee that if there is a shortage of something, it is because the government interfered with proper pricing. When the price of something is too low, people use too much of it, and supply goes down too quickly. Atlanta has a water shortage because the government has kept the price of water too low. Raise the price of water to reflect its true value, and there would be no water shortage looming on the horizon.
And don't give me this nonsense about it harming the poor more than the rich. Such arguments come from people who are merely envious of the rich and would prefer that the poor not have water so long as the rich don't either. I know this to be true because this is going to be the outcome of such a policy, and everyone with even half a brain knows it. So you have to wonder what the true motivation of such people really are (well, you might wonder -- I don't).
1 comment:
The media obviously doesn't want to understand the concept you brought up, about the people who would rather there be no water for anyone than to follow basic economic rules, to ensure that there is less waste and more water for everyone. Funny how few people understand that a true free market in resources equals conservation of those resources.
This blog is impressive, and I like your statement of objective in the header. Keep up the good work.
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