Front Page Titles (by Subject) Government Water Planning - Literature of Liberty, October/December 1979, vol. 2, No. 4
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Government Water Planning - Leonard P. Liggio, Literature of Liberty, October/December 1979, vol. 2, No. 4 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Government Water Planning
“A Critique of Collectivist Water Resources Planning.” The Western Political Quarterly 32(September 1979):320–326.
Demand for water is outstripping its supply at existing prices, particularly in Western states. In the name of allocating water for the “public interest,” many analysts seek to solve this problem by expanded federal and state involvement in the planning and management of entire river systems. But proposals for increased public planning and management of water resources are unsound. Their faulty planing theory “ignores the individualistic nature of social relationships and neglects the role which markets play in allocating resources to competing uses according to a single measure of value: the marketplace.” It is impossible to plan or allocate resources efficiently without market exchange and price signals.
Government planners fail to see that human action is not a collective whole, but a complex system of interacting individuals and groups. Thus “a river basin is not one large farm, but a complex network of social relations which involve private property, common ownership, markets, elections, campaigns, interest groups, pressures, government commands, crime, and corruption.” How can government planners maximize the welfare of such a collective entity as a “river basin,” without regard for the welfare of the individuals involved? The government planner can have no idea of “the total, let alone the relative value of the resources” he deals with in his plans. By contrast, private planners who own resources maximize social utility by allowing the free market price mechanism and individual choices decide to which uses water will be put.
The “water problem” is not one of insufficient physical supply of water; it results from public policy-makers' inability to rationally allocate water for alternative uses. Consequently, federal irrigation projects have so wasted large amounts of water that in the arid West “less than half reaches the intended crops.” This waste results from non-market underpricing of water, which encourages users to waste so “cheap” a resource. Similarly, government planners, in a misguided desire to minimize the economic losses due to floods, have subsidized flood insurances and supplied “disaster relief” money to areas plagued by floods. These non-market plans have “made it profitable for people to suffer flood losses” rather than locate in less flood-prone areas.
Better functioning markets, rather than more public planning, will efficiently allocate water resources in the United States. But, to operate properly, markets require that property rights (in water) be “well defined, secure, and transferable.” At present, much water is wasted because its “collective public ownership” subjects it to political interest-group decisions or the irrationalities of public planning. The solution is to turn over water resources to private industry. “Water rights should be owned by private individuals and corporations . . .” Then private markets will “efficiently allocate the available supply to those uses which yield the most value.”