Sunday, April 21, 2013

Not A Drop To Drink

Did Nestlé CEO Peter Brabeck commit a bit of a faux pas when speaking on the usefulness of property rights over potable water? Judge for yourself:

Now, I will agree that some of his statements are not well-supported by economic theory, but most of his observations are pretty good. His comments on labor market productivity aren't what has folks bent out of shape though (I'd link to some online commentary, but most of it seems too heavily laden with profanity to share on our family-friendly blog). It seems as if people are downright offended when this gentleman dares forward the proposition that water is valuable.

Ah, but where to put the emphasis on that last phrase? I don't think the stress should be on "water", since we recognize the value of food and shelter, we obtain and enforce property rights there. I also don't think the stress should be on "valuable", as I think many people recognize that there are areas of the world that suffer great privation in fresh water. Water is clearly valuable when Tony's Taco Truck isn't over the next sand dune. No, I think the stress should be on "this gentleman". The furor is that this guy is a CEO. He will never, in his entire life, ever want for a drink of clear, refreshing water. He is the masthead of BATNA disparity.

If I were to lecture on the economics of goods provision and of the tragedy of the commons, that's one thing. I'm a middle-class American working schlub. This guy? He's offensive because he dwells in the estate of the oppressor class. The admiral of one of the largest food service fleets in the world wants to privatize drinking water? Cui bono is easily answered here, but what's easy to overlook are the consequentialist arguments in favor of expanding the scope of the market. It just sounds wrong for water to be privately held. From the mouth of someone so well-heeled, it sounds darn close to evil. Certainly non-euvoluntary.

And we can just pity the folks who can't buy water for love or money, I guess. Better that bureaucrats should decide to divert Colorado River water to Nevada to build huge fountains and golf courses for the delight of the monitor lizards.

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Do you have suggestions on where we could find more examples of this phenomenon?