A Libertarian Viewpoint on Water (Part II) with Prof. Walter Block and Peter Nelson, P.E.

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Peter Nelson returns and joins Walter Block to provide a follow-up discussion on their book Water Capitalism. Walter and Peter discuss a wide range of libertarian issues ranging from specific water-related examples of libertarian water thought to the framework in which their libertarian water construct would exist. It’s a long but interesting interview that will be sure to make you think twice about water.

In this session, you’ll learn about:

  • Why Walter and Peter believe privatizing water resources is the most efficient approach to water use
  • Walter’s motto
  • How Walter and Peter would approach privatizing water rights
  • How the current economic regulation paradigm developed
  • Why Walter and Peter would rely on legal torts rather than regulation to frame their economic model

Resources and links mentioned in or relevant to this session include:

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12 thoughts on “A Libertarian Viewpoint on Water (Part II) with Prof. Walter Block and Peter Nelson, P.E.

  1. Kathy Nguyen

    You are right about a podcast spurring me to comment. I enjoy being challenged by new ideas about water. As a water resource manager with 16 years experience I have never heard a more ridiculous and dangerous approach to managing water resources. Water is not a commodity and the hypothesis that some inherent morality that is imposed by ownership will protect water resources is so uninformed. The example of price differential. Esteem farmers and urban dwellers is asanine. Farmers are getting untreated water and urban dwellers are paying for highly treated potable water. An urban dweller can also access untreated water for pennies but if they drink it or cook with it it could kill them.

    1. Dave McGimpsey Post author

      Kathy – Thanks for listening, and I’m glad you were moved to comment! I want to respond in greater detail and length than is reasonable for this forum – it’s a complicated topic. In short, I think a libertarian approach to water is more useful in theory than it is in practice. I will try to get a blog post put together that sums up my thoughts on this topic (but it won’t be soon based on my current workload). Appreciate you listening and sharing your thoughts! Best, Dave

  2. Mitchell Ryan

    Thank you for having Peter Nelson and Walter Block on to discuss these ideas. These concepts are very foreign to all of us when applied to water. You have to understand, Water has been thinking and writing about economics for decades. He’s authored or coauthored over 500 scholarly articles published in the peer-reviewed literature on these concepts. When you ask Dr. Block, who will enforce the rules or who will adjudicate, it’s analogous to asking him “who will build the shoes?” if the government had heretofore been in charge of shoe making.

    I encourage people not to dismiss these ideas simply because you thought about it for 5 seconds and you don’t see how it would work. As Peter stated so nicely, this system isn’t perfect, but it is a more moral and just system, and as Dr. Block IMO obviously laid at the listener’s feet, the best and quickest path to wealth and abundance and the end to water scarcity while improving water quality.

    1. Dave McGimpsey Post author

      Thanks for listening, Mitchell! Really appreciate your comments. As I responded to Kathy, I have a number of thoughts on this topic that are too long to post on this comment board. (One of the benefits of being the moderator). Will have a blog post at some point in the future. Thanks again for listening! Dave

  3. Pierre

    As much as I like debate and intellectual challenge, I must say that I don’t understand this podcast at all. The reasoning process itself is so odd that it is hard to deconstruct. The speaker starts with stating that “water should be privatized” and then explain how to do it. The is a dogmatic approach to water management and it is based on major flaws on underlying assumptions:

    1. The speakers point out problems but no solution: water moves. It does not stay still. How can we distinguish my drop of water from yours? How can we assign property right? Same goes with radio waves btw. These questions are not answered.

    2. There is no comparison of the efficiency of assigning property rights to water vs. other methods, such as direct government management. What about the cost to enforcing these property rights?

    3. How can someone be an anarchist and want property right? If there is anarchy, who would enforce the property rights?

    4. There is no discussion about fairness of markets.

    5. There is no discussion about the efficiency of market. There are so much externalities about water, how can that be captured in a price? This is not discussed.

    6. The authors discount real physical problems with a wave of their hands: “I want the ocean’s fish to become farm fish”. They probably want water to stop moving. Good luck with that!

    The speakers remind me of the obscure 1960s/1970s abstruse discussions between Marxists, Trotskyists, Leninists and others extreme-left minority movements. It feels like they live in an alternative reality where they discuss about abstract concepts completely disconnected from the physical reality of our world.

    1. Dave McGimpsey Post author

      Pierre – Thanks for listening! And for your insightful analysis. As I intimated in the opening, this interview didn’t go as I expected. That was my fault for veering off track and biting around the edges of political philosophy. Walter and Peter are obviously Lockean in their thought on the state of nature as they proposed anarchy. I come down more on the side of Hobbes when thinking about what the state of nature was (as contrasted with social contract theory upon which I diverge from Hobbes), and my market power comment attempted to (clumsily) get at that point, even if I perhaps didn’t recognize it at the time. Again, more thoughts on this in a future blog post. Fascinating discussion, though, and I thank everyone for their comments. Dave

    2. Mitchell Ryan

      Water molecules in the ocean are not scarce. In the case of the ocean, the property rights would extend to the ocean floor. Just as air molecules are not scarce on land, nobody would assert ownership of the actual air as if they could contain its movement.

      I also find it interesting that you rail on the guests for pushing abstract concepts right after you introduced the concept of “market fairness” which is the ultimate abstract concept. Many of these concepts, as was stated in the podcast, are widely accepted for many aspects of life. Dr. Block’s resume is over 140 pages on his bio if you want to know more about these topics and how property rights would be enforced by private regulatory agencies.

      1. Pierre

        Interesting perspectives guys. Let’s argue :), let’s say I own 1 km2 of ocean floor. The water above the ocean is mine. I can pump it to use it however I want. Right? But if I do that, water will move from the rest of the ocean to make up for pumped water. Therefore, what should we do? Build walls around my ocean plot? That does not seem practical, this is very costly and not efficient… and we haven’t talked about pollution, which can also move from one plot to another.

        Also, do I own fishes as well? They move too. Let’s assume that I could be able to force them to remain in one place by building walls. Many would die because they are migratory species. Eels, sharks, tuna, dolphin, whales would die… To put this in economic terms, the disruption of ecosystems would result in destruction of environmental capital and a loss of value. Thus, privatization is probably not the most ideal tool. Maybe another form of management would be more efficient, such as treating ocean as a global public good and regulate its use?

        As I listened to the post cast, my main feeling was that speakers have a hammer – privatization – and everything is a nail. They tried to constrict reality to make it fit within their framework.

        We haven’t discussed about other sources of water such as unsalted clean water, which is scarce: https://pmm.nasa.gov/waterfalls/science/freshwater

        Thankfully, a CV of 140 pages does not protect against outside criticism. Thank you Dave for allowing me to express my opinion on this page. I am not an economist but an environmental engineer with interest in the field of economy. That it probably why my perspective is so different.

        1. Mitchell Ryan

          They spoke about pollution extensively in the podcast, as well how technology can now allow us to take ownership of animals that cannot be contained in small areas. So when you say it hasn’t been covered I don’t know how to respond. If you are truly interested in economics, https://mises.org is a great resource.

          1. Dave McGimpsey Post author

            Thanks for keeping it civil, guys, and hopefully, this discussion makes all of us think more deeply about these issues. Again, blog post coming at some point. Dave

  4. Mitchell Ryan

    I believe one of the main hurdles most people face in grasping the concepts Dr. Block advocates for, is the term that was used over and over again in the podcast, “anarchy.”

    I presume a majority of people, myself included not long ago, when they hear ‘anarchy’ they think of total lawlessness, people running around killing each other in the street, no checks and balances to anything. Why we typically associate this word with only those things is anyone’s guess and mostly irrelevant. There are examples of this concept of anarchy all around us today, that we all engage in constantly, and that we benefit from. Many economists in the past have also called this concept thing such as “spontaneous order.”

    On a basic and superficial level, many of the decisions you make today fall under this anarchy label. I know this seems silly when I point this out, but this just illustrates most of our misunderstandings about this concept when Dr. Block references the term, but your action of visiting this site and reading this comment is a form of anarchy. Nobody told you or forced you to visit this site and read my comment. There is no law requiring you to interact with me here. This is the broadest sense of the term, still operating under the framework of the civil society where most people behave themselves and don’t need a policeman following them around 24/7 to make sure they aren’t punching people at will. The fact that anybody CAN go into a sit-down restaurant, and can walk out without paying, but 99.9% do not, illustrates the civil society that overlays and allows anarchy and even our current system to function. It is because most people do follow the rules in our society, thankfully, that we can discuss these concepts as viable.

    Further, as Dr. Block pointed alluded to, anarchy is all around us and delivering great results. Nobody told the farmer to grow the apples and where to send them to, he made that decision. The government didn’t set the price of the apple. Nobody was forced to buy the apple. Nobody was told what they must do once they buy the apples. And nobody was prevented from buying all the apples at every store in the town. And even though you can walk in the store and steal 1 apple and 99.9% of people will not get caught/in trouble for stealing just 1 apple, almost nobody does. There is no armed guard in the produce isle (like we see in some other countries right now.) This is what is meant by anarchy in ecenomic terms that are tied with social behavior and norms.

    How anarchy fits into ensuring the environment is not excessively polluted, I believe we have all been educated in a distorted way. We have been taught by the government in government schools that without the government there would be all this pollution, that we would all be working in coal mines covered in soot for $2 a day. They show us a picture from 100 years ago of kids covered in soot that causes an emotional reaction, and we’re told this would be us if not for the government protecting us. I’m not going to go into great detail, but I think that’s just a cartoon version of reality and things like improving working conditions, better pay, and better environmental protection has more to do with the wealth and prosperity of a nation than the regulations themselves. If we could snap our finger and impose US regulations on places like India tomorrow, they would not turn out like the United States, they would just be further improvised by the additional demands that can’t be met now, not for lack of want or law, but for lack of wealth and means.

    I can point to one example now, anyone who does any research on Atrazine can see how destructive this chemical is and how there should be none in the water. The legal limit allowed in drinking water has devastating consequences on the environment and although the government doesn’t want to fund research into its effect on humans, it’s clear to me it’s terribly terribly bad. Yet they allow it. They tell us it’s safe. Why? I think most people say it’s lobbying by agriculture and and the companies that produce the stuff. And that’s true that’s a part of it, but that’s just the surface level reason. The real reason is the cost is enourmous. Without it, agricultural production, particularly corn would be greatly reduced from smaller yields. Corn is the #1 crop in America and that would have a ripple effect across the economy. An even bigger reason IMO, is removing it from existing water sources going into the distribution system is an even greater cost. First the government would have to admit it has been wrong and this chemical is terrible, and then the cost of water would nessearily skyrocket to remove this from every utility’s supply lines into people’s homes. We can’t do it, not because we can’t imagine the regulation, but because it would put too big a burden on our economy and people in the short term which is a political decision and not a long term decision for people’s health or a market one. Most people don’t buy bottled water or expensive filters because they are stupid and want to pay more for drinking water. They do it because they are sending a market message that they want better.

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