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How Would A Free Market Deal With A Severe Drought?


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#16 Lepista

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Posted 05 April 2012 - 02:28 PM

..Or perhaps, the water that is processed and purified becomes more expensive, and local solutions startt o develop for where water is needed for other tasks. Local supplies for washing clothes, a well in the garden for watering the plants, etc.

Water demand drops, and an equilibrium is reached.
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#17 hotairmail

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Posted 05 April 2012 - 02:46 PM

Just wondering how a proper free market would deal with a severe drought?



It would tend to monopoly and then charge as much as people are willing to pay (to live).

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#18 the shaping machine

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Posted 05 April 2012 - 02:47 PM

Just wondering how a proper free market would deal with a severe drought?

One of the problems we have is that when the utilities were privatised, the government of the day listened to merchant bankers and not engineers.

Instead of selling off each local utility as a single unit, they should have separated the delivery network (for water that means the pipes) from the supply/treatment works and billing organisation. The local network should then have been passed the local authorities to be run as a non-profit organisation (think roads, street lights etc).

This arrangement would have enabled multiple providers to set up and to genuinely compete on price and quality. The customer would also be able to move seamlessly between suppliers and a real free market would automaticly develop.
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#19 the shaping machine

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Posted 05 April 2012 - 02:48 PM

It would tend to monopoly and then charge as much as people are willing to pay (to live).

A monopoly isn't a free market.
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#20 Guillotine

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Posted 05 April 2012 - 02:55 PM

In short time we find ourselves at a phreatic market no.

#21 mfs1959

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Posted 05 April 2012 - 02:56 PM

Plugging the leaks in the pipes would be a start.


Why? The 'low-hanging fruit' has already been sorted. The others are possibly uneconomic or will cause huge disruption for little gain. For example, there are areas of London where the economic cost of plugging leaks would make desalination a cheaper option.

Edited by mfs1959, 05 April 2012 - 02:56 PM.


#22 winkie

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Posted 05 April 2012 - 03:01 PM

Why? The 'low-hanging fruit' has already been sorted. The others are possibly uneconomic or will cause huge disruption for little gain. For example, there are areas of London where the economic cost of plugging leaks would make desalination a cheaper option.



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#23 South Lorne

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Posted 05 April 2012 - 03:08 PM

Just wondering how a proper free market would deal with a severe drought?


...send for the rain maker...what else..?..... :rolleyes:
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#24 LJAR

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Posted 05 April 2012 - 03:28 PM

A monopoly isn't a free market.


it can be, but only in the situation where a monopoly is the most efficient way of delivering the services that consumers want.


Given I don't know how the current system operates I don't know what the "solution" to the current lack of rain would be.

The main thing that would need to change is for market entry barriers to be a lot lower - how easy is it to set up a new utility company I wonder?



In most markets a shortage is dealt with by increasing prices, prices rise and people will use water for fewer things until demand matches the supply. That doesn't work unless you pay for the water when you use it - which needs a meter and constant monitoring.

Edited by LJAR, 05 April 2012 - 03:31 PM.


#25 Executive Sadman

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Posted 05 April 2012 - 04:12 PM

In a free market somewhere without drought would trade with us and make a healthy profit on the water they sell us.

Except we'd never get a free market, what we'd get is govt putting maximum prices on water, and no-one supplying at those prices and we'd all die of thirst.
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#26 Executive Sadman

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Posted 05 April 2012 - 04:19 PM

A monopoly isn't a free market.



Thats the trouble with most govt privatization. You get 'private ownership', but the most important factor of any free market, the price mechanism, isnt allowed to take place, with private bidders simply buying/renting a state monopoly.

That IMO is why most so called 'privatizations' (should really be called something more specific) are an unmitigated disaster.
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#27 Lennon

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Posted 05 April 2012 - 04:28 PM

One of the problems we have is that when the utilities were privatised, the government of the day listened to merchant bankers and not engineers.

Instead of selling off each local utility as a single unit, they should have separated the delivery network (for water that means the pipes) from the supply/treatment works and billing organisation. The local network should then have been passed the local authorities to be run as a non-profit organisation (think roads, street lights etc).

This arrangement would have enabled multiple providers to set up and to genuinely compete on price and quality. The customer would also be able to move seamlessly between suppliers and a real free market would automaticly develop.


Isn't that exactly what happened with the Electric and Gas Supplies - National Grid run the distribution, and everyone else competes to generate and send the same stuff. The only problem is that they don't compete on price - they compete on obfuscation instead.

#28 KingBingo

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Posted 05 April 2012 - 04:56 PM

Poor people would die of thirst. There can be no free market in water in a civilised society. Water in the US is less privatised than here IIRC.



That's not actually true. In a free market the 99% would be shot to satisfy the whim of an evil banking billionaire. Those that remained would be ranked according to wealth, and the bottom 99% would be culled in some way. This would continue until only Ben Bennake was left.

Thanks God we don't live in anything like a free market, oh the unimaginable horror of it, thank God we live under such enlightened fascism.
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#29 bomberbrown

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Posted 05 April 2012 - 05:10 PM

I'm one of the poor buggers with a garden affected by the hosepipe ban. The whole things a farce.
Ironically, my two watering cans release more water than my hosepipe can deliver which means I continuously fill a dustbin (save the water over filling the watering can and wasting it down the drain) of water and fill the watering cans from that and have a glass of wine etc between waterings.
It's a minor inconvenience but worth it to keep the back garden looking nice.
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#30 EUBanana

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Posted 05 April 2012 - 06:17 PM

It would tend to monopoly and then charge as much as people are willing to pay (to live).


Difficult, when it falls from the sky.




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