The Tragedy of the Commons could be seen as a story of personal responsibility. Or rather, the lack of it. When consumption of finite resources is not associated with its relevant cost, individuals will overuse it with gross disregard to scarcity. In the end, individuals will exhaust the resources and leave none behind. The Selangor state government will have to brace itself to face this scenario sooner or later.
Selangor under the new Khalid administration recently announced its intention to provide the residents of the state with 20m3 of free water supply. The intention is noble but the sustainability of the policy is in doubt. While Selangor does indeed experience water abundance, drought is not uncommon. Last year, water levels at various dams throughout Peninsular Malaysia, including Selangor, were something we all should be worried about. In fact, the previous administration has projected that the Klang Valley will experience severe water shortage beyond 2010 and to overcome the projected problem, the federal government has rolled out a plan to transfer raw water from rivers in Pahang to Selangor.[1]
In Malaysia where drought is closely linked to high temperature, water reservoirs face a combination of factors that contribute to water shortage. In the upstream, absence of rain prevents reservoirs from replenishing its supply while high temperature encourages evaporation. In the downstream, in fighting the heat, consumers would demand large volume of water to cool down. With higher rate of output compared to input rate, it is not hard to imagine what the ultimate consequence will be. Any inefficiency that exists within the local water distribution system only makes matter worse.
There is not much we can do to fight drought from appearing from time to time at the moment. I do not believe that we have the knowledge to consciously manipulate the climate effectively. What we can do however is to encourage conservation by instilling responsible usage of water. Responsible water usage does not come through slogans and songs unfortunately. It requires a system of carrot and stick that promotes conservation and the market does just that. By enforcing free water policy, the state government not only interfering with market mechanism, the state also goes against everything that is associated with conservation.
By providing free water, the state breaks the link between action and responsibility. A person is free to utilize water for whatever reason without considering its effect on the society. What makes the detachment between action and responsibility possible is the elimination of prices as signals.
Prices signal scarcity. Flexible pricing mechanism will fluctuate according to demand and supply. When demand increases relative to constant supply, prices will go up to signal scarcity; when demand goes down relative to constant supply, prices go down to signal abundance. Higher prices will demand greater appreciation of the resources from consumers; it encourages consumers to be more thoughtful when consuming resources.
Without prices as signals, many consumers will be unable to appreciate the very real idea of scarcity. Even in dire times when water should be priced as high as gold but offered free instead, do not be surprised to find somebody washing their car or watering their lawn. News of impending shortage will not change his behavior because he does not feel the pain. He does not or unable to read the signal of scarcity clearly because he has been insulated from the real world.
Under free water policy, the state effectively transfers the responsibility of conservation from individuals to the state. Individuals will not practice responsible usage of water because of the reason mentioned earlier. When the ultimate signal comes — water shortage — it may be already too late to begin to conserve. With the state taking the responsibility of conservation away from individuals, the state effectively creates a commons as described in the Tragedy.[2] Thus, the course is set.
Without a good pricing mechanism, the only way to overcome the Tragedy of the Commons from reaching its sad conclusion is to ration water at one stage or the other. Suffice to say, I do not think highly of any policy that leads to rationing when flexible pricing mechanism offers better solution.
[1] — KUALA LUMPUR, Nov 21 (Bernama) — The project involving supply of raw water from Pahang to Selangor is expected to be completed on schedule by the middle of 2013, the Dewan Rakyat was told Wednesday.
[…]
Shaziman said it was anticipated that the project would be able to resolve the problem of raw water supply which Selangor would begin to face over the next five years. [Pahang-Selangor Raw Water Project Ready By 2013. Bernama. November 21 2007]
[2] — For further but brief explanation of the Tragedy of the Commons, see Wikipedia.
5 replies on “[1614] Of free water and personal responsibility”
moo_t,
respectfully, you are missing the point.
I think the whole issue must assess from various angle : water leakage, water conservation,etc
1. According data from PUAS, 35% of water are wasted due to the leaking.
2. All Malaysia houses are not build with water catchment facility. Indeed, fresh water are use to flush toilet, but not rain water. For a family or even office water usage, the flushing account for 30% of water usage. And because of property development, more and more water are flush directly into drain and create floods.
3. Water catchment area. Illegal factory,farming that locate in upstream water catchment area. Beside pollution, such activities all exhaust the resources, and reduce the catchment area capacity.
I don’t think sigma fully understands how real libertarians (as opposed to those funny caricatures that comprise the majority of Ron Paul supporters) actually reason. The idea is that people will be irresponsible unless they are within an incentive system that channels their own self-interest in a positive manner. Socialism is usually not an effective example of such a system because it does not have a huge role for individuals to pursue their own self-interest in a structured manner; when you take away or otherwise unnecessarily interfere in the price system, you reduce the amount of information available to society as a collective to act for the greater good. Markets are generally more effective because prices provide a strong incentive for individuals to pursue their own self-interests while contributing their own information to the market in terms of bidding the price up or down.
It’s a very complicated thing to explain, but there’s a pretty darn good example in Steven Landsburg’s The Armchair Economist. In short, only an insane individual would argue that people will create a positive outcome if allowed to act on their greed alone. You need a system that effectively channels that greed for the good of society, which implies a market system rather than an anarchy. (Where many libertarians go astray is the assumption that an effective market will innately arise from anarchy.)
Who says anything about forcing? The only coercion that exists is when the state taxes its citizens and then uses that taxmoney to subsidize water.
But as mentioned here, what the free water policy does is making personal responsibility irrelevant. The free water policy is about having somebody else shouldering your responsibility. Why should others shoulder your responsibility?
But what about personal responsibility? I thought as a libertarian that is the cornerstone of your beliefs. I mean, libertarians want small govt because they believe that people can manage themselves the best.
And now you’re implying that people ‘have’ to be forced not to waste water? ;P
Just can’t help it. My socialist streak sometimes gets the better of my social democratic streak :P But on the whole I don’t feel water is the best thing for the govt to subsidised. Education and health will always be my first two priorities for full govt subsidisation.