California Drought - What's Scarce Is Wisdom, Not Water

California is so dry that Gov. Jerry Brown has instituted water-use restrictions for the first time in the state's history. The problem, though, is not a shortage of water. It's a shortage of thinking.

..."Were in a new era," said Brown. "The idea of your nice little green grass getting water every day, that's going to be a thing of the past."

Using an executive order, the Democratic governor, according to an official statement, "directed the State Water Resources Control Board to implement mandatory water reductions in cities and towns across California to reduce water usage by 25%."

Brown is also requiring "campuses, golf courses, cemeteries and other large landscapes to make significant cuts in water use" while prohibiting "new homes and developments from irrigating with potable water unless water-efficient drip irrigation systems are used," and has banned the "watering of ornamental grass on public street medians."

No, this is not a new era. It's still the era of limited thinking. It's the Soviet way of dealing with scarcity.

What California needs is more water, not more government mandates. Water is a commodity just like any other, and its allocation should not be left to governments.

If it were bought and sold in an open market, there would be a strong incentive to move water to where demand is high and supply is low — such as California.

But as long as prices are kept artificially low by government dictums, that incentive doesn't exist and potential providers never become actual providers.

When there is no true market for water, it falls under political control, which Terry Anderson and Peter Hill say in "Water Marketing — The Next Generation" precludes efficient pricing while at the same time creating political conflict and encouraging waste.

This is where we are now in California.

...California successfully navigated its drought problems in the early 1990s under Republican Gov. Pete Wilson using pricing mechanisms and authorizing the California Drought Emergency Water Bank to buy water from agricultural sources.

Farmers profited more from selling water than from the crops they would have otherwise used the water for. One economist said in 1991 that that year might "be a turning point in California's transition to water trading."

But California didn't learn then and it still doesn't understand today.

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