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32 sats \ 4 replies \ @Undisciplined 25 Jun \ parent \ on: Water shortage to affect India's sovereign credit strength: Moody's econ

What happens if there's a shortage, now? How does involving the government fix that?

If there's a market, then when there's a regional shortage, supply will be diverted from other uses in other places, to meet the more urgent demand.

There's no reason to think a water market wouldn't be highly competitive. It can be produced in many places, using several different methods. In competitive markets, prices tend towards the marginal cost of production, which is very low for water.

Government monopolies have no direct mechanism to drive down their costs, because they get their revenue coercively.

32 sats \ 3 replies \ @Coinsreporter OP 25 Jun

You're presenting an ideal picture of market. I'm just worried about those situations when and where corporates manipulate prices for demand and supply reasons. Water is so much essential for life that it may someday well be sold drop by drop.

I'm not saying that only government should manage water supply. There can be other players as well. But it should be ensured that at least safe drinking water is available for everyone.

21 sats \ 2 replies \ @Undisciplined 25 Jun

I think that's an idealization of what government management would provide. We've had several scandals in the US in recent years where government water utilities were poisoning people.

Outcomes follow incentives and government utilities are not incentivized to provide quality products.

What you're concerned about is an abuse of "market power". Setting aside the debate about how significant that ever is, it isn't plausible for a commodity like water. Food producers have very little power over market prices, because food comes from lots of places and is produced by many people. Producers have to take the best price they can find. Water is a very similar product.

Notice that I'm not making an appeal based on anyone having noble intentions. Plain old rational self-interest is enough for this situation. I don't think you can make the same claim with respect to government management.

32 sats \ 1 reply \ @Coinsreporter OP 25 Jun

I don't think you can make the same claim with respect to government management.

I agree.

I'm actually concerned about crooks wherever they are.

0 sats \ 0 replies \ @Undisciplined 25 Jun

As am I. Again, outcomes follow incentives.