Potable water: supply destroyed by government

Well, there you have it. The Exeter Town Rulers have officially imposed controls over our use of water. It's interesting how people say this is a "shared resources," yet we are allowed to use it only in pre-approved ways. How dare I wash my car?

A drought is a real thing. Farming is tougher, and crop yields are lower. A water shortage is a government-caused problem. There is no shortage of water at the grocery store because private water production benefits from the price system. Socialized water does not. Socialized water operates under bureaucratic decisions, not market decisions. The prices do not reflect the relative scarcity of water.

If potable water were produced privately, as soon as producers got a whiff of a possible drought, they would have immediately responded. Prices would have risen, and the ensuing profit would have promoted increased water production. The increase in the supply of water would have driven the price back down toward "normal" levels at a higher supply.

There is no water shortage...

...in the marketplace. Go to any supermarket, and you can buy all sorts of water: sparkling, spring, flavored, boxed, bottled, canned, whatever you please.

It's only when a good is regulated by government do we see shortages. This is best summed up by Say's Law: markets tend to clear. Supply tends to equal demand, and the resulting price is the market price. When government imposes a price ceiling on a good, there will be more demand that supply. Only governments create shortages.

If Exeter's water supply was owned and operated by private companies, prices would move freely as supply and demand fluctuate. When there is a drought (supply decreases), the market price will increase as demand falls (along the demand curve, all else equal). This is the natural and peaceful way to conserve water. Further, high market prices will encourage production of the very good that has limited supply. Entrepreneurs competing for profits actually increase supply and eventually lower the price.

Instead, we have a problem caused by intervention: government ownership of water creating a shortage. Instead of ending the government ownership, another intervention is applied: political rationing. So, instead of consumer demand and conserving water, we have the Town Rulers determining what we can use and when.

They are so wise.