It sounds draconian and contrary to the beliefs of many humanitarian organizations, including the United Nations which declared water as a basic human right in 2010. However, if we expect to take the correct steps forward to solve the global water crisis, then water must be treated as a commodity not a basic human right.
In his book, The Mystery of Capital, and also in an essay published in the International Monetary Fund, Hernando de Soto explains why capitalism has failed in many third world and developing countries and continues to succeed in many Western countries.
According to De Soto, by assigning property rights, people are held accountable when any sort of damage of property is committed. Such accountability is accomplished through the legal system:
The integration of all property systems under one formal property law shifted the legitimacy of the rights of owners from the political context of local communities to the impersonal context of law. Releasing owners from restrictive local arrangements and bringing them into a more integrated legal system facilitated their accountability.
By transforming people with real property interests into accountable individuals, formal property created individuals from masses. People no longer needed to rely on neighborhood relationships or make local arrangements to protect their rights to assets. They were thus freed to explore how to generate surplus value from their own assets. But there was a price to pay: once inside a formal property system, owners lost their anonymity while their individual accountability was reinforced. People who do not pay for goods or services they have consumed can be identified, charged interest penalties, fined, and embargoed, and can have their credit ratings downgraded. Authorities are able to learn about legal infractions and dishonored contracts; they can suspend services, place liens against property, and withdraw some or all of the privileges of legal property.
While De Soto’s arguments look at property mostly as land and buildings, his principles can also be applied to water. Treating water as a commodity and granting it property rights will reduce pollution and help create more sanitary sources of water. Once water becomes a commodity, the legal system will have the justification to prosecute any industry or individual that damages the water supply because it will be destruction to property. When water is a human right, and nobody owns the rights to the water, then there is nobody to prosecute because everybody owns the water and can freely do with it as he or she pleases.
Many are familiar with the economics behind the tragedy of the commons. Just as the commons were over-used, water will be depleted if we continue down the path of treating water as a basic human right.
People will over-use water until they are faced with an enormous crisis. The UN’s call for making water a basic human right does not provide any deterrent from over-use, but instead gives people the entitlement to use as much water as they desire. By charging people for the amount of water they use, people will be more conscious of their use of water and take measures to not waste it. There is no incentive to provide free water, and without assigning property rights to it, as De Soto’s argument articulates, there is no way to legally prosecute anyone or any industry that damages or pollutes water.
Samuel Gregg also articulates the problems that come from central planning and communal ownership:
Why then do people tend to favor private over communal ownership? One reason is that they are aware, as Aristotle and Aquinas witnessed long ago, that when things are owned in common, the responsibility and accountability for their use disappears, precisely because few are willing to assume responsibility for things that they do not own. Our everyday experience reminds us of the tragedy of the commons. The early advocates of socialism were well aware of these objections. Their response was to hold that all that was needed was a change of mind and heart on the part of people as well as profound structural change: a change that would not only produce a new system of ownership, but also a “new man” — the socialist man much trumpeted by the former Soviet Union.
Furthermore, in his essay, Our Stewardship Mandate, Rev. Robert Sirico explains how integrating the market supports stewardship:
Long experience has shown that the state is a bad steward. One reason this is so is because of what has been termed the “Tragedy of the Commons.” Simply put, if everyone owns something, no one person has any incentive to protect or take care of it. This has been graphically demonstrated by the appalling reports of environmental disaster in the former communist countries. Furthermore, the state has many incentives to be a poor steward. For example, the federal government owns a great deal of forestland. These forests are supervised by the U.S. Forest service, the mission of which is to cut down trees. Because it is federally funded, the Forest Service has no market incentives to keep its enterprises cost-efficient. As a result, the forest service is logging old-growth forests with a return of pennies on the dollar. Had these forests been supervised by a private company, they would never had been touched.
Likewise, experience has shown that the market is a better steward of the environment than the state. Not only does it allow for private ownership and offer better incentives, but it allows for the expression of minority opinions in regard to land and resource use. Take, for example, the Hawk Mountain Sanctuary in eastern Pennsylvania. Located along the Appalachian migration route, it provided an ideal location for hunters to shoot thousands of hawks. Conservationist Rosalie Edge decided that those birds ought to be protected, a minority opinion at the time. In 1934 she purchased the property and prevented the hunting of the birds. It is now considered one of the best bird-watching locations in the world. Had Ms. Edge lived in a regime where property was owned by the state, she would have to convince a majority of the lawmakers, bureaucrats, and competing special-interest groups that Hawk Mountain should be a preserve, so daunting a task it is unlikely it would have happened. As it was, she only had to purchase the land.
The same principles Rev. Sirico articulates in his essay can also be applied to support stewardship in the global water crisis.
