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Tempering Neoliberal Excess: The Case of Water Markets

Updated: Aug 13

Neoliberal ideology has framed a 3-4 decade long effort to turn water into a private property, removing it from the historical frame of water as a public property: Think of converting the hydrologic cycle on the Spaceship on which we Travel together, illustrated in the image, to a private property. The Blog is exploring the question of privatization of water, and points to the really important question of what is the best balance in private & public property in water.


The effort to privatize water (especially the access to water) has been driven by Neoliberal oriented organizations and the mainstream (Micro)economists, especially the Libertarian branch, who lend support through using Single Interest Theory in Micoeconomics. In said theory only self-interest matters, only price P matters, and, when the shared (with the other)-interest is considered at all, as represented in priceless value V, it goes back to some early time.


Originalism is also invading water law (as it recently did in the abortion question by the SCOTUS), e.g., in the matter of the public trust doctrine and especially in access to water bordering on privately owned land. Also, while the public trust doctrine has been evolving, e.g., in addressing endangered species like steelhead trout in western streams, the originalist framed water attorneys and legal researchers in law schools are countering that reality. Originalist framing calls for the public interest to lose claims in water. And, Neoliberal framing encourages it, claiming that any expression of the public interest is to be thought of as distorting, impeding, and obstacles to the private interest in a water market.


The Blog uses Dual Interest Theory in Metaeconomics, wherein the shared other (with others in the public)-interest also matters, to suggest the need to temper the inherent excess built into water framed as only a private property. Dual Interest Theory facilitates shifting the conversation about water marketing away from ideology toward scientific inquiry, relating to finding the best balance in private & public property in water, based on sufficient reason to choose said balance. Dual Interest Theory frames expressions of the public interest in tempering a water market as essential to achieving economic efficiency, and is anything but a distortion, impediment, or obstacle: Rather, the public interest ensures the water market is effective and efficient.



In fact, the Neoliberal (and Single Interest Theory in Microeconomics as ideology) frame for privatizing and marketing water, because it is opposed to ethical reflection about that which the other (in the public interest) can go along with, is assured to achieve economic inefficiency. Dual interest theory clarifies that economic efficiency in the matter of access to and allocation of water requires a tempering of self-interest with the other (shared with the other, yet internalized)-interest of each person. Ethics represented in the shared other-interest, the public interest (and the contemporary content of the public trust doctrine is part of same), is key.


And, it cannot be emphasized enough: In contrast to Single Interest Theory, Dual Interest Theory is built on an empirical foundation being built in Behavioral and Neuroeconomic Science. Metaeconomics using Dual Interest Theory is an empirical economics, moving economics away from being an ideology.


Bottomline, as the last slide in the Powerpoint summarizes it:


• Ideological bias and lack of empirical foundation characterizes the journal literature and books on water markets as framed by Single Interest Theory in Microeconomics. Empirical work framed by same can only point to how water did or did not move to a higher price P (dollars) use, as value V (priceless side of water) considerations are framed as impediments, distortions, and obstacles to the Market.


• In contrast, Dual Interest Theory in Metaeconomics focuses empirical attention on whether the price P evolving in said markets is adequately tempered by value V, and as a result operating with economic efficiency: It is only possible with good balance in the joint private & public good, private & public interest, Market & Government.


The empirical data and testing to date on the effectiveness of water markets, involving 100s of journal articles and dozens of books, is unconvincing. Testing by the MetaEcon --- grounded in Behavioral Economic Science --- is needed in order to explore the value V considerations and how best to bring value V evolving in Other Forums forward to temper price P in the Water (Market) Forum.


And, the bottomline is actually much broader than just the matter of water markets. As Fukuyama (2022, p. 146) says it, modifications need to be made to the form of classical liberalism, practiced since the Enlightenment, that has brought the market & government to the current state of disarray (current chaos in the political economy), with the need for “… classical liberals ... to acknowledge the need for government, and get past the neoliberal era in which the state was demonized as an inevitable enemy of economic growth and individual freedom … " It is about a joint market & state, a joint market & government whether in water markets or any other kind of market.


Click on the "Metaeconomic Sensibilities" title below for the Powerpoint presentation developed for the Society for the Advancement of Behavioral Economics conference in Lake Tahoe, Nevada, August 8-12, 2022, for:

SESSION I: Thursday, August 11, 3:20-5:00

Session I1: Examining the Environment (Aspen A/B)


Gary Lynne, University of Nebraska, USA

Metaeconomic Sensibilities: Tempering the Move to Privatize and Trade Water in Markets

(After Downloading, two ways to view the ppt slides: One way is to view the ppt slide-by-slide, and click on Audio (little speaker icon) as you go. Also many slides have "Notes" on same. Another way is to click on Slideshow, Start from beginning: The ppt, along with the audio clips, will play automatically)


Edouard Civel, Ecole Polytechnique, FRANCE

Do Certifiers Manipulate Energy Labels to Benefit from a Nudge Premium?


Hans J. Czap and Natalia V. Czap, University of Michigan-Dearborn, USA

Conserve the Planet, NOT Empathy! Revising the Empathy Conservation Framework.


John Ifcher, Santa Clara University, USA

The Impact of Narratives and Conceptual Frames on Economic and Government Attitudes: Evidence Regarding Negative Externality




References

Fukuyama, Francis. Liberalism and Its Discontents. New York: Farrar, Straus and Giroux, 2022.

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