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Comment by refurb | Hacker News Reader

What would happen if the gov't did nothing?

1. Water would become more scarce in California. Not everyone would get what they need.

2. Price of produce would go up, since there is a smaller supply.

3. We'd start to import more produce (either from outside the country or other states) because the price is the same or lower than the new, higher CA price.

4. Other farmers, who don't grow what CA grows, would start to because it's more profitable as prices rise.

The gov't doesn't really have to do anything. That's the beauty of the free market.

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I'm puzzled at the down votes you're receiving. I think you have a valid point and I generally have a similar perspective, but, in this case, it overlooks a significant externality: the destruction of the environment as rivers are pumped dry and (albeit, artificial) reservoirs run dry. Further, your solution could make the additional extraction of water quite profitable, which would further the destruction.

The straightforward solution is to internalize the externality via a progressive tax on water usage. Then, as you said, the free market can regulate itself.

Note: I'm not a fan of taxation, but it can be a good solution to managing externalities.

it overlooks a significant externality: the destruction of the environment as rivers are pumped dry and (albeit, artificial) reservoirs run dry

Not sure I understand. The rivers would run dry because of no rain, not because we're taking water from them. Remember all this water we're using for irrigation was just ending up in the ocean anyways.

Is the California produce you buy bone-dry? Probably not. It's full of that precious water. A lot may wind up in the ocean as runoff, but a lot gets exported from CA too. It eventually winds up back in the ecosystem, but the point is that it will take eons to get back into the acquifers.

Or, do what we've done for roadways and electricity in this country (and to a lesser extent oil and water), and expand a "water grid" from the southwest to the midwest, and southeast... transporting water from water-rich locations to more drought-prone locations.

The government is not an independent entity. Farmers (by which I include agribusiness corporations) vote and donate heavily to political causes. Further, the government is not a monolithic entity; you have the governor, various other elected officials, and then all the legislators in the assembly and state senate, plus all the people that California sends to Congress Washington DC. There are a lot of people who live in inland California whose economic well-being depends directly or indirectly on agriculture. As long as they participate in the political process, government is going to serve some of their interests because they keep electing people to vote for that.

This is the big trouble with libertarians right here. You keep being politically marginalized because you don't seem to appreciate that government is not some alien thing imposed from without, but the distillation of multiple (and often competing) collective interests. Just as 'war is a continuation of politics by other means,' politics is is a continuation of business by other means. Your 'free market' solution is only going to function if you exclude a bunch of people from the political process because their continued participation has become a major inconvenience for everyone else. As someone with technocratic inclinations I sometimes wish we could do that, because I think the farming lobby frequently epitomizes greed and stupidity. But shutting farmers out of politics would be a huge violation of our constitutional design, not to mention political suicide.

but government is doing something, they are pricing water too low currently artificially incentivizing farming and over use of water

But farmers aren't the only consumers of water, so is everyone that lives in CA. The issue as I see it is the drought combined with agriculture combine to drive the price of water up and it's unlikely the corrective (forcing farmers to migrate out of state to water rich locations) will happen before critical levels are hit for servicing residential populations and their needs.

Water is allocated via water rights. Not sure the specifics, but I would guess the gov't has water priorities and wouldn't let SF go dry just to keep the farms going.

Farmers are not the only consumers of water, but they consume approximately 80% of it. We are nowhere near running out of drinking water.

Let me see if I get this right: if the government doesn't do anything, the beautiful free market will automatically redistribute a scarce resource evenly between all the interested parts. Got it!

In any case, 2), 3), 4) doesn't seem to produce any beautiful fix for 1) in your list, apart from maybe stabilizing produce prices.

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