What's the Deal with Water Marketing
Prior appropriation is a bit of a funny thing. There are essentially two simple principles that make up the legal doctrine that governs Western water allocation: seniority and beneficial use. But what it means depends a bit on the eye of the beholder. Some of the difficulty stems from the fact that water itself is a commons but the water right is private property. In Utah, water rights are considered real property, just like real estate. It is this aspect of prior appropriation that Donald Worster, in Rivers of Empire, latched onto to argue that the doctrine facilitated the conversion of water into private property, as part of a larger history of irrigation involving the monopolization of resources and consolidation of power.
By contrast, the beneficial use provision of the doctrine was intended to dissuade speculation and to ensure that any water being claimed was being actively used to some productive end. Seen this way, water itself (if not water rights) cannot become a form of fictitious capital under the doctrine. The development of the doctrine came from a recognition that the colonization of Western land and resources would occur more rapidly if water was actively being used, rather than hoarded; miners in the Sierra Nevadas in the late 1840s and later in Colorado wanted the water to discover gold. Gold was worth more to the project of settlement than squatting on a resource and waiting for it to rise in value (which would have been at least somewhat self-defeating). Legal scholar David Schorr goes further, arguing that the "Colorado doctrine," the version of prior appropriation articulated in Colorado's constitution and affirmed in the state's courts, represents "radical, agrarian ideals of broadly distributed property and antimonopolism" and that the doctrine was "mainly concerned to prevent control of water by capitalists, and did so by breaking the common-law monopoly of riparian owners."
Then, amid these theoretical concerns, there is the matter of how much prior appropriation was actually applied in the nineteenth century, with little record keeping and inaccurate estimates of water flows. Some disputes were infamously settled not with a judge or a county recorder but with shovels at the headgate of a ditch.
There is a very valid question: to what extent water in the West can truly represent a commons, even if the resource itself is owned by the respective states and distributed for free. The beneficial use provision, in privileging the uses of settlers and disregarding any Indigenous resource management, has kept those who are truly first in time from being first in right. Then there is the issue of water rights, a property market that governs access to the resource. At the same time, the doctrine has (for the most part) thus far helped to kept speculative trading out of Western water.
Amid the complexity of the issue, what to do about the looming question of water marketing is appropriately complex. But there is also another layer to the question. Because the federal reserved rights of Native Americans are not subject to prior appropriation, at least in theory, the tribes are better positioned to sell their water rights on an open market than other entities bound by the states' prior appropriation doctrines.
The idea that water marketing can aid conservation, by placing a value on the water itself and effectively penalizing waste, is fairly well accepted among environmentalists. Marc Reisner writes in the afterword to the updated version of Cadillac Desert, "If free-market mechanisms--which much of western agriculture publicly applauds and privately abhors--were actually allowed to work, the West's water 'shortage' would be exposed for what it is: the sort of shortage you expect when inexhaustible demand chases an almost free good. (If someone were selling Porsches for three thousand dollars apiece, there would be a shortage of those, too.)" I'm going to harp on this a bit, since it is a very poor analogy that only appears reasonable at first glance. The comparison to Porsches is apples to oranges. Porsches don't fall out of the sky. Gold rush miners did not blast Porsches at hillsides. Your body is not composed of 60% Porsches. The proliferation of prior appropriation through the Western states represents a consensus, in my opinion, that water itself is less valuable than what it can be used to produce.
In other words, water is not a "good." Treating water as if it is (always already) a finished product that should be subjected to markets to ensure responsible usage elides the historical and social processes that are necessary for transforming elements of the non-human world into property. It is "tragedy of the commons" logic. You are already familiar with this parable, but just to make sure we are on the same page: the tragedy of the commons was proposed by Garrett Hardin in 1968 in a paper that argued that the users of a common resource, like a pasture, would inevitably degrade it by incrementally trying to extract more from it for themselves. "Each man is locked into a system that compels him to increase his herd without limit," according to Hardin. (Ultimately Hardin's axe to grind was overpopulation, and he argued that environmental degradation requires us to relinquish the "freedom to breed.") This is the worldview that tends to inform the approach of economics. For economists Francois Molle and Jeremy Berkoff (who argue against this approach), "Sectoral 'allocation stress' is seen as resulting from the disproportionate share, and inefficient use of water in the agricultural sector. This apparent misallocation is often attributed to the failure of government to allocate water rationally." In other words: if a common good does not make as much money as possible, it is the government's fault and must be turned into a commodity.
Hardin's example is more of a thought experiment than a historical argument, since it is not based on the actual history of the European commons or the centuries-long process of enclosing them--which impoverished and displaced the peasantry, leading to overcrowding and crime in the cities to which they emigrated. Hardin himself argued against a maximalist interpretation of his argument in a later paper, stating that his thesis concerned the "non-management of the commons under conditions of scarcity" and clarified that the article should have been titled "The Tragedy of the Unmanaged Commons." Elinor Ostrom won a Nobel Memorial Prize in Economics for her demonstration of successful commons in various times and places. "Ostrom's Law," described by law professor Lee Fennell, is, "A resource arrangement that works in practice can work in theory." I recommend rolling that sentence around in your mind for a while.
I believe this point is at the very crux of the problem. For Reisner and many others, the solution to this tragedy is a free-market mechanism for water. In other words, the commons must be enclosed, privatized, in order to solve the problem of misuse. I disagree wholeheartedly. The enclosure of the Western landscape, in my view, is at the root of the entire problem, not its solution. In practice, however, given the complexity of Western water and the urgency of some problems stemming from overuse, I can see the case for some water marketing as a band-aid, which I hope will be necessarily limited by logistics. But part of this is my disinclination to die on a (very important) hill while other activists and scientists are currently pulling in the opposite direction. I don't think I'm wrong, but I am open to the possibility that I might be. When it comes to Native Americans and water marketing, I have no place in that discussion. That's a live issue, and I am not part of the communities that have to make those potentially weighty decisions.
Dan McCool lays out a compelling argument against water marketing in his book Native Waters.
Markets are an effective means of allocating private economic goods, but they completely lack any sensitivity to nonmarket values. A market has no respect for culture, no long-term understanding of the public good, no sense of justice. Also, there is a score of well-known market failures: monopoly, inadequate consumer information, imperfect competition, and externalities, to name a few... Water, necessary for all life; could anything be more important to our collective welfare? The myopia of some market proponents creates a blind spot in their discussion of marketing; they talk of "higher valued" uses of water, meaning that people who want the water the most will be willing to pay the most for it. Thus they focus exclusively on willingness to pay. But an equally important dimension is ability to pay. There is nothing democratic about markets; we do not all have an equal vote. In a hypothetical scenario, a wealthy homeowner wanting to fill a swimming pool could outbid a poor reservation in need of drinking water; is this an example of water going to a "higher valued use"?... Water marketing can provide valuable assets to Indians when they are in the position of seller; if they have to buy water on the open market, their poverty would put them at a distinct disadvantage... Thus, water marketing must take place within a legal context that protects third parties, the environment, and the economically disadvantaged... Unfortunately, many current laws protect special interests rather than the public interest.
I would add, in line with his example of "higher valued uses," that increasing the price of water inevitably increases the cost of its conservation. Yes, too much water is used to grow alfalfa. But if an acre-foot of water is worth $300, it is easier to let it flow into Great Salt Lake than if it is worth $30,000. Yet McCool, rather inexplicably in my opinion, favors water marketing, perhaps because he feels that the privatization of this public good is inevitable.
McCool, also in Native Waters, quotes some Indigenous responses to the idea of buying and selling water, which I find compelling. Lakota theologian and writer Vine Deloria Jr. says that the idea of water as private property "completely eliminates the intuitive sense of life and emotional content that makes water important as an element of universal life and reduces it to a quantifiable income-producing entity." Luke Duncan, former chairman of the Ute Tribe of the Uintah and Ouray Reservation, says, "Water is not something we can give away. It was put here by the creator, and you can't have land without water." You can't have land without water. At a symposium on Great Salt Lake recently, former Executive Director of Utah's Division of Indian Affairs Forrest Cuch answered a question about water markets by indicating that they are an example of a "hoarding mentality," referencing remarks he made earlier in the panel: "The dominant culture was always consumption-oriented. Hoarding. Our people, we used what we needed and only what we needed."
Water in the West is a dubious commons, but I contend that, rather than submitting this element to the demands of the market, we will ultimately solve the problem only by going in the opposite direction. Continuing to discipline the necessary elements of life into a process of commodification and everything that it entails is a death spiral.
**References:**
Donald Worster, Rivers of Empire: Water, Aridity, and the Growth of the American West (Oxford: Oxford University Press, 1985).
David Schorr, “Appropriation as Agrarianism: Distributive Justice in the Creation of Property Rights,” Ecology Law Quarterly 32 no 1 (2005): 3–71.
Mark Fiege, Irrigated Eden: The Making of an Agricultural Landscape in the American West (Seattle: University of Washington, 1999).
Marc Reisner, Cadillac Desert: The American West and its Disappearing Water (New York: Viking, 1986).
Garrett Hardin, "The Tragedy of the Commons," Science 162 no 3859 (1968): 1243-1248.
Garrett Hardin, "The Tragedy of the Unmanaged Commons: Population and the Disguises of Providence," in Commons without Tragedy: Protecting the Environment from Overpopulation--A New Approach, ed. Robert V. Andelson (New York: Oxford University Press, 1991).
Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (New York: Cambridge University Press, 1990).
Lee Anne Fennell, "Ostrom's Law: Property Rights in the Commons" International Journal of the Commons 5 no 1 (2011): 9-27.
Simon Fairlie, "A Short History of Enclosure in Britain" The Land 7 (Summer 2009).
Dan McCool, Native Waters: Contemporary Indian Water Settlements and the Second Treaty Era (Tucson: University of Arizona, 2002).
Read more:
A Short History of Water in the US West
The Agrarian Foundations of the Western Water Crisis (1620 - 1902)
The 100th Meridian: Where "Free Land" Requires "Free Water" (1862 - 1923) How (Not) to Make the Desert Blossom as the Rose (1847 - 1860)Free-for-All in the Uinta Basin (1879 - 1920)
Race to the Bottom -- The Law of the River
The Sinful Rivers We Must Curb
Our Last Major Water Resource -- The Central Utah Project
The Case of Uphill Flowing Water