Long live the profiteers
Sky reports that the flooding in England has led to sensational disaster-time perfidy. In the same ominous breath, it mentions looting and (gasp) the sale of bottled water for profit. Why is it that experienced journalists don’t undertand elementary economics? Rising prices for essentials in an emergency aren’t only natural, they’re actually good. They incentivise producers to increase supply, pay for enterprising individuals to get it to areas that are expensive to reach, and limit consumption by those who don’t really need it. The alternative is real shortages, bureaucratic costs and rationing. What would you rather have? Expensive bottled water, or no bottled water at all?
I’ve long believed that inside every bleeding-heart liberal is a socialist just dying to crawl out. And while the reality of socialism’s failure across the globe keeps them closeted the dream of a state-controlled utopia will not die.
;-)
Some things are too important to leave to companies who only exist for the benefit of shareholders. Water supplies should be resilient, and guaranteed, as should electricity supply and local public transport.
That people are now profiting in Gloucestershire is an interesting example of the free market, but the fact that we have no water at the moment is due to a failure of the same market forces as infrastructure investments won’t happen while shareholders expect a dividend.
Failure of market forces? I thought water was a public service in the UK? You can hardly blame market forces when government service provision fails.
Private competitors aren’t likely to arise when they have to compete with tax-funded utilities. Now I’ll grant that there are technical reasons why some public goods (such as water infrastructure) is hard for a genuinely free market to provide. I don’t, however, agree that mere importance is a good reason for the government to provide it. Food is equally important for human survival, as is clothing, and nobody expects the state to provide those. I’d wager if private water suppliers did exist, as a group they’d have more than enough incentive to make sure supplies are resilient and guaranteed.
Remember that in a competitive market, the benefit of shareholders cannot be achieved if a company does not provide a service that customers want. Only when companies attract customers, and benefit them, can they earn the profit that benefits shareholders.
No, water is not a public service in the UK. It is provided to households by private companies such as Severn Trent in Gloucestershire (http://www.stwater.co.uk). There is no way that private home owners can get supplies from anyone else as the suppliers are defined by geography, so there is no real free market (as one could argue there is with electricity).
With food there is natural diversity - we can choose what we eat, and it is possible for a household to be self sufficient with a small patch of land (and being vegetarian), although this probably takes more time than most want to spend. I’ve drunk water from near the mouth of the Orange River and my gut flora could handle it, but most people would get ill if they had river water coming out of the taps.
The only people who should be entrusted to ensure the continuous supply of water are those people who we can vote out of power.
Ah, okay. Then your problem is with monopoly providers, though, and with the impossibility of competition arising. Despite the problems with providing technical public goods, however, I still can’t see why a government would necessarily do a better job. Over here (in South Africa), the government-owned utility can’t keep electricity flowing even under normal circumstances. I’d hate to find out what would happen during a natural disaster.
Having said that, I’m kinda missing my own point here. Water infrastructure is likely to fail anyway, given such severe conditions as England is facing right now. The original point was about bottled water: that charging high prices for essentials in an emergency isn’t, on balance, a bad thing. Sure, it puts the buyer at a disadvantage in one sense (having to pay more), but it puts them at the considerable advantage of being able to secure a supply, where there otherwise might be a shortage.