Well maybe it's a choice. In California water should be more expensive to discourage people/industries from using it (depending on population desnity, it could be better to import). But the agriculture lobby ensures their consumption of water is protected. Maybe if there isn't enough water i California, then intensive agriculture was a bad idea in the first place?
It's just that the rest of the country needs to pay market rates for the California water they're consuming via agriculture. It's the whole country's problem.
Your message seems to imply that its consumers fault for paying to little for food from California; that's a silly way to think about this problem.
California allows the disruption of true prices of water. If water is scarce, it should be more expensive.
If the water at true market value is so expensive that prices of goods produced with that water are now no longer competitive on the market, then that means that agriculture is not sustainable nor feasible in California and will be correctly priced out of the market by those who are able to produce the same quality product for less.
It implies nothing of the sort, just points out that many parties critical of California's handling of the drought are also enjoying the benefits of that mishandling.
Price. Your question is a little strange on HN, so either you're a little anticapitalist, either I didn't wrtie well, either I'm not understanding your question. So here's more explanation, hopefully answering your question at the right level:
- Raising prices is an automatic way to choose customers to match demand. Some part of the customers won't be able to afford water, so they will have to use alternatives: No fancy garden, no watermelon agriculture, no golf course? Good part is, I'm not the one who chooses, the market will decide depending on who really wants to use water. The other customers will have to spend more money on water, and this is good because it compensates the water producer for the loss of the other customers, and give them more money to, maybe, build a desalinization plant.
- "But this is evil!" Yes some people can't afford life in some areas. Maybe the root of the problem is actually an unsustainable density of population in the Bay area. High prices are already driving people out of California on a large scale, and we need to drive even more people out. It's what needs to be done, because we mustn't overexploit natural resources in an area.
- "But this is what Wall Street does, and Wall Street is bad!" Wall Street isn't the entierty of economy. Look at all local exchanges: On a local market, price determines the first customers who will be able to afford the $3/kg tomatoes. If there's not enough tomatoes for the last customer who could afford them, then the farmer could have raised the price; if there are remaining tomatoes, the farmer set the price too high. Money decides where people reside in a city. Money decides that you can either choose to have a lamborghini or eat meat during the rest of your life. Good point is, the government doesn't have to decide who the meat goes to using criteria, the market does automatically, and does it well for 99,99% of worldwide exchanges. The rest is hedge funds, yes they may badly assign funds sometimes, yes they have impacts on global crisis, but those alter the number of worldwide exchanges by only a dozen in a billion.
- But "companies are richer than customers!". Yes and no. They just pay water "before tax". First, don't forget that the consumer pays in the end. Second, in France we have a 68% tax burden, so when a companies would pay 100€ for goods, they'd have to pay a salary of 230€ to an employee if he wants to buy the same 100€ goods. So yes, companies are richer, but it's only our fault: The less taxes we have on wages, less there's a difference between corporate and consumer wallets. We're just imposing this to ourselves. Many economists wonder why we tax wages, because taxing a sector discourages the use of it; Thus we'd be better off with 0% wage tax to encourage employment and equivalent (high) tax on polluting products to discourage their use. But that is a story for another day.
Hopefully I haven't hurt feelings of anyone by showing too much distance with the people who are defavouritized in this system.
Your question is a little strange on HN, so either...
It seemed that you were originally implying that people should necessarily get the nod over agriculture, and I was challenging that in the form of a question, and your reply is actually exactly the answer I was leading towards- I didn't expect to get it from you though :)
I read you wrong; I think we are on the same page.
Hey, there's an idea: seize water rights through eminent domain in the drought-afflicted parts of California and auction them off to the highest bidder!
That's not entirely true. Or at least it's more complex than that. Look at what the federal government did in the 1930s. They bought gold at X dollars I believe it was 30 bucks an ounce. They then turned around and raise the price of gold to 33 bucks an ounce. From one perspective the government paid fair market rate, from another perspective they get to dictate fair market rate to at least a certain degree. Theit fiat allows them to have more power over pricing and valuation.
When we look at water rights they can do the same thing. Apparently water is undervalued. This means that the rights to said water are undervalued as well. If the government where to seize the property under eminent domain, they would be seeing it at the undervalued price. At auction they would make the premium of whatever increase they deem necessary to properly value water. They have now made money from a land snatch and grab.
