Is Water Being Left Behind?

In many ways, water doesn't seem much different than oxygen.  It is necessary for life, it's almost everywhere, and it seems difficult to keep people from using it if it's there.  And in many ways, that's true.  But the key comes when the consideration of safe drinking water is added.  Then it becomes more complicated.

But before we get ahead of ourselves, we need to take a minute and look at two aspects of any good (or service).

How Goods Are Good (Or Something Like That)

Excludability and Rivalry

All goods and services can be characterized by two different characteristics:  excludability and rivalry.  These mean:

• Excludability - the ability to prevent someone from using a good or service
• Rivalry - the idea that if someone uses a good or service, then someone can't use it

In general, goods where you can prevent someone from using it is an excludable good; and conversely, a good where it is difficult to prevent others from using is called nonexcludable. 

Goods where the use by one person prevents another from using are characterized as rival, whereas goods that aren't depleted by one person's use are nonrival.

Setting the Table

We can combine these two traits together into a table, and through that we can come up with four distinct categories of goods/services:

Admittedly, each category of goods has its downfalls.  But the problems with public goods are perhaps the most prominent.

Which is where water comes back in.

Why Clean Water Is Important

 As mentioned above, water in and of itself is a pure public good.  It is incredibly difficult to stop anyone from consuming water of some sort.  Also, one person's use of the overall water system is generally non-rival because it doesn't prevent someone else from enjoying water. (Also, remember, the water you drink in modern times is just purified dinosaur pee.  Or something like that.) 

But what we are ignoring with the idea of water as a public good is the idea that people need clean drinking water.  They need water that is free of bacteria, microbes, and other things that can make them sick.  And without proper sanitation or resources, that is much easier said than done.  Now, clean drinking water is still a public good.  It is still relatively hard to prevent people from accessing clean drinking water, given both access points and cultural norms that establish clean drinking water as a right. 

But producing clean drinking water is expensive.  The market for this, left to its own devices, always delivers an unfavorably small amount of clean drinking water.  Which creates justification for government intervention to produce affordable and plentiful supplies of clean, municipal drinking water.

Missoula, MT

In truth, Montana is a bit of a weird state - that's mostly what I learned when I lived there for a couple months.  The stars at night are beautiful, I've never seen as many trees in my life, and beer flows freely (a lot like water).  And like any agricultural state in the Western United States, water is an especially important resource.

This is probably water, but it could be beer if it's in Montana.

Now, like almost every other city in the United States, Missoula, MT provides the service of providing safe, clean drinking water to its citizens.  But like many other cities, Missoula was also fundamentally affected by the recession in 2008.  As tax revenues to the city declined, providing the same amounts of services became difficult.  Even as economic conditions have improved, Missoula had fallen deeper and deeper in debt.  So they looked for ways to provide the same services at lower costs.

In municipal governments, this is often done through privatization of services, such as municipal waste, or water purification.  And this is exactly what Missoula did, as you can read about here.  Recently, the water rights for the entire Missoula Valley were sold to private corporation the Carlyle Group.  This has the potential to benefit Missoula citizens because privatization will likely lead to improvements in water infrastructure, and the same clean water for less money.  But the problem?  It's now a private company profiting, which makes water much more excludable than it was before.  And this shifts clean water from the public goods category into the club goods category.  And whether this will be good or not depends on several variables.  So we will see.