COMMONWEALTH PARTY
OF AMERICA

The current drought effecting 36 states or so is best handled by applying free market principles to the price of a dwindling supply of the valuable commodity: fresh water. Instead of solely relying on requests to conserve water, water restrictions and punitive measures for those who violate water restrictions; the county, municipal and other governments should noticeably raise the price of water that comes out of the tap from the community resevoirs in proportion to drought severity and water levels. By taking the politically unpopular approach of raising prices of a commodity the masses will have much more incentive to conserve water and lakes and resevoirs will be better able to retain volume.

The price of water should be subject to the bidding process of supply and demand just like oil, gold, cattle and stocks. By letting market forces reflect the more valuable state of water during the drought, everyone will treat the resource respectively and only use more of it if they are willing to pay more to do so where their need of the water outweighs its higher cost. Once that need can be lowered or the price becomes too high then people will do without or with less and search for alternatives to using water or to the current methods of water utilization. Higher prices will more adequately distribute the water since only those in real need will bid up the price and those with less need will curtail useage and grumble over price. This will also promote the incentive for suppliers of water to get more water into the community in order to take advantage of the higher prices or it will help the current suppliers deal with the extra costs of supplying the water like digging wells, running pipelines to other resevoirs or lakes, trucking in water or maybe even resorting to access of desalinization plants. Once higher prices have provided greater balance to demand and supply, then prices can go back down as the water level improves, demand shrinks or drought lessens.

Doing the politcially popular thing and keeping water prices the same will result in the end with everyone having to pay drastically higher prices not just for water but for the loss of civic structure and function when the resevoirs run dry. When the price is kept artificially low, there is not as much incentive for everyone to conserve so the resevoirs will empty. There will also be no extra income for the utilities to expand their efforts to get additional water. Those who are in less need of water will sustain use while those who vitally need it in the future will lose much more revenue when the system dries than what they would have saved for cheaper water now. Even if the lakes should not dry out, future droughts will arise and without the added revenue of any successive droughts new or expanded resevoirs are not as likely to be constructed in time, for say a more serious 100 year drought or even the strains of population growth over time on the water supply. Can you imagine what it will be like if the resevoirs do go dry and there is a frenzy to get water? The industries and businesses who use water will go broke, populations will suffer as well leading to migrations or perhaps sickness and disease. Before all that, if prices are not properly heightened there will actually be those outfits who hoarded water who had no real need for it. They will make a killing at your expense when prices eventually have to seriously rise because there is now a rationing or a black market scenario. All of this because political officials don't want to be seen as 'price gougers' and want to remain popular with the populists. Without the initial unpopular higher prices, then in the end the price of water or having to do without water will be much more severe than letting prices rise beforehand in more moderated market spikes.

The oil crises of the '70s through the Nixon and Carter eras which developed first of price controls and lax credit and then later manifested in higher gas prices, lack of gas and high interest rates illustrate the failings of such policies. The recent Hawaiian attempt at controlling gas prices and the current real estate and credit debacles are more recent examples of how interfering with the supply and demand principle always backfires and the same will hold for water.