A Hot, Wet Tragedy of the Commons

Baby AF, briefly and formerly known on this blog as Baby by Forty, aka BabyDB40, has been going through a six week growth spurt and denying us sleep, even on the weekends. As such, the blog's writing will experience lows not previously thought possible. Your patience is appreciated.

But before this site morphs into a dad blog, I thought we'd get back to basics: a preachy, left-leaning diatribe that lazily links something I found in the newspaper or NPR to economics and personal finance. Enjoy.

I know it's cool to dunk on the New York Times these days, and the paper has certainly given its critics plenty to be angry about. But it's still the site I go to for news (if not for op-eds) in the early morning and the way-too-late-at-night. I'll forever love the paper, flaws and all, because the writing is always so good.

Earlier this week, Noah Gallagher Shannon wrote an excellent long form piece, "The Water Wars of Arizona" which documents how huge, foreign and out-of-state corporations are buying up land in the rural parts of our state to grow crops. And while the fairly ridiculous notion of agriculture sprouting in the desert is not particularly new, the scale and the reasons corporations are buying up land here, are. 

For one, these new farms are drilling for water far, far deeper than they used to. These agricultural conglomerates are extracting so much water that the local residents' wells cannot pull enough water to run a washing machine or draw a bath: the water level is being drained below the depths of their wells. 

The solution for the residents? Do as the big farms are: drill deeper, at a five figure expense, and hope that the water table isn't drawn down so far that you run in to the same problem down the line.

But why are these corporations buying up Arizona land in the first place? Why now? It's the same thing that drew companies to the state for mining a century earlier: a complete lack of regulation.

“What the smart money is doing is looking around and saying, ‘Where else can we go where there is no regulation?’ ” Robert Glennon, a professor of water law and policy at the University of Arizona and the author of “Water Follies,” told NPR in an interview. “And that is Arizona.”

My family came to the state in 1980, as my dad worked for a company hoping to get a different resource out of the hot, Arizona ground: copper. I was born in a tiny mining town called Globe: the sort of place that elicits a chuckle from Arizona natives when you say you're from there. As soon as the job was done, we picked up sticks and my dad was on to the next opportunity in Nevada. 

But the state of Arizona has long let companies pillage its resources, its residents frequently getting little in return. The area is typical of "The Far West" described in Colin Woodard's American Nations: libertarian-leaning and embroiled in a love-hate relationship with the corporations who employ, and exploit, local labor. The area's economic history is littered with sad stories of former mining towns turned to tourist stops and ghost towns: remnants of industries that simply wanted to take whatever they could out of the earth.

At one point, the state decided it would sell a huge portion of their public land and buildings, including its own capitol building, which the state then leased back from investors who, inexplicably, were allowed to remain anonymous. Arizona residents weren't told the name of the corporation their property had been sold to and that, now, was their landlord.

This environment of lax regulation was bound to bring other companies calling. Even though there are no more choice public buildings to pillage, there was still something of value the state could sell: water. Rather than using the water from rivers and lakes which are heavily regulated, huge companies could just use the water pumped from the underground aquifers, which is amazingly not governed by many laws. For example, the New York Times piece notes that "local farmers were never required to put meters on their wells...which meant that nobody knew exactly how much water was being pumped, much less how much was left. "

My state's foolish policies aside, the larger issue at play here is determining the best use of public resources, which everyone, residents, local small businesses, and far flung corporations, all have to share. 

Unfortunately, what is happening in rural Arizona is a classic case of the tragedy of the commons. This occurs when a group of individuals that share a resource (say, underground water used by residents and industrial farms, or fisherman from several nations sharing the supply of fish in a sea) act in their own "rational" self-interest, but end up depleting the public resource they are sharing. 

If the group collectively takes more than the common supply can replenish, eventually the resource can be permanently destroyed. No one single player is to blame. Every actor is just doing what he thinks is to his benefit. But eventually the group ends up in a situation where all the individual actors are screwed: the fish are all gone, the wells go dry, and everyone loses.

At the core of the issue is the right of ownership. Cutting up and selling parcels of land is one thing. Assuming that each individual owner can pump as much water as he'd like from the ground underneath is another.

Who owns the aquifer of water that sits below all the thousands of parcels of land? Well, no one does. Or put another way, everyone does. It's not to be owned, but shared. Hence, the commons.

Maybe that's too much of a hippy-dippy framing for the conservative or, sigh, libertarian readers out there. So let's try a different take.

A tragedy of the commons, like we're seeing with the aquifers, is a type of market failure: when a market fails to distribute goods efficiently. It's terribly inefficient for a small group of farmers to destroy a renewable water resource, when the alternative is everyone sustainably drawing from it indefinitely.

Still, I'm arguing from the position of someone who plans to live here for a long time. These companies are essentially mining water and sending it across the globe in the form of alfalfa for Saudi cattle and pecans for Chinese consumers. It's naive to think they have any interest in preserving this resource for local, Arizona residents. They're trying to exploit it for their residents.

So what can protect the commons? The R word: regulation.

Local politicians need to give more thought to what they ought to do with public resources. Who should benefit from them? If you want the resources to benefit your citizens, how many generations do you want these resources to be around for?

I write about reaching financial independence and retiring at the ripe old age of forty, so hopefully it is clear that I am no socialist. I am very happy to make money, to invest money in humongous companies, and to let capitalism do its thing. In my heart, I really am a believer in the free market.

Free markets do a lot of things well, but allocation of a scarce public resource is not always one of them. The free market doesn't give two shits about whether an acre of water would be better for a thousand residents to drink, instead of feeding cattle halfway around the world.

But citizens should care. Politicians, even right leaning ones who have "conserve" as the root of their fucking brand, should care about conserving the water their constituents depend on: the miracle under their feet.

So this fall, as the national media get wrapped up in the narratives of whether Democrats can flip the House, or maybe even steal a couple seats in the Senate, take a look at the local races in your neighborhood and your state. My bet is that there's an important issue (or five) in your hood like our state's little water debacle.

As always, thanks for reading.


*Photo is from kevin dooley at Flickr Creative Commons.