The frog does not drink up the pond in which he lives (American Indian Saying)
In 1776 Adam Smith introduced the paradox of value: diamonds are much more expensive than water, even though water is essential to human survival. Smith’s paradox, at that time, appealed to his contemporaries as little other than a philosophical nicety – one which was readily disarmed by their belief in the virtually limitless supply of water. This natural abundance assumption, however, has today become fundamentally overturned by a series of local and international crises in the management of water recourses. Smith’s philosophical paradox, in other words, has become one of our most crucial economic and political predicaments.
On a planet where available freshwater constitutes an aggregate of less than 0.5% of all water (Barlow 2001), we need to acknowledge that the water supply is finite and that the availability of clean water per individual is similarly so. Although physical water scarcity has always existed, economic water scarcity is a specifically anthropogenic phenomenon. Rises in population, river pollution, climate change, inefficient/wasteful irrigation, lack of legislation and water mismanagement from a governmental, community and individual perspective are the main factors underpinning contemporary global water shortages. With over one billion people lacking adequate access to clean drinking water, almost 40 developing and developed countries declaring droughts, and 22 percent of the world’s GDP produced in water short areas, efficient water supply is more than likely to emerge as the 21st century’s single most urgent resource issue (Postel 2003).
Against the popular perception that water can only be traded as a consumer good within heavily branded bottles, we should observe the sheer diversity of contemporary water markets. In Texas, New Jersey, Florida and Australia, for example, the problems of water scarcity and distribution are primarily addressed through market-mechanisms. Israel and Turkey, for their part, have signed agreements for the sale and transfer of water resources (Pamukcu 2003). 70% of global water supplies are currently used in agriculture and, by 2020, it is estimated that we will need almost 20% more water to continue feeding the world (Kirby 2000). Furthermore, water banks have been established in semi-arid regions of the South-Western United States because water will become the “petroleum for the next century…by 2025 one third of the global population will not have access to adequate drinking water” (Goldman Sachs Global Investment Research, 2008). Millions of gallons of freshwater are used on a daily basis to irrigate golf courses whilst, in Sub-Saharan Africa, 43% of children drink polluted water and consequently one in five dies before the age of four (Unicef Report 2005). Gigantic jacuzzis, swimming pools and water parks represent additionally audaciously conspicuous modes of display, use and consumption of this ever dwindling resource.
It isn’t just sold in bottles!
The commodification of nature in general and of water in particular requires marketing practitioners, social scientists and policy makers alike to elaborate upon how the increased scarcity of water resources stimulates the growth of private water marketing systems which are directly opposed to the sustainability of the resource and the interests of citizens. Although the twentieth century water expansion paradigm was dominated by an ethic of growth (Gleick, 1998), it is becoming increasingly subjected to the pressure of changing social values which are themselves heavily mediated by NGO interventions. Simultaneously, lobbying for the commercialization of water resources and private sector participation has been increasing, where the effort is to treat water like any other economic good – as a series of potential growth markets which might attract significant investment. The very existence of water rights, in other words, turns rivers, lakes and sources of groundwater into exchangeable and marketable private property.
The political dimension of water markets
A specifically political dimension of growing water scarcity can be observed within transnational conflicts between nations claiming authority over the same river, lake, basin, dam or water barriers. Long-lasting water conflicts in the Middle East and North Africa, water problems in the Iberian Peninsula between Portugal and Spain, controversy for the La Plata Basin between Brazil and Paraguay, China’s tensions with downstream users of Mekong River such as Laos and Vietnam, and the sheer fact that more than 260 river basins are shared by two or more nations, all pave the way for waters’ having become a prevalent basis for military conflict. Water ‘wars’ and disputes stem from opposing and conflicting interests between individual, household, agricultural and industrial water consumers whose intentions, beliefs and actions have been shaped, since the 1980s, by those who promote water privatization and others in favour of public solutions (Bakker, 2007).
The fierce debate on the privatization of natural resources has so far been couched in terms such as “neo-liberalization of nature”, “green neoliberalism” or “liberal environmentalism” (McCarthy and Prudham, 2004). The use of such broad and somewhat confusing terminology, however, doesn’t really encapsulate the numerous water resource management policies and jurisdictions established across the world. By casting the debate antithetically: as public vs. private ownership, as state vs. market control, as regulation vs. deregulation or as equality vs. efficiency, for example, we ignore how community-based water management offers an alternative solution to market-based and state-based failures. Although the majority of governments around the world have chosen hybrid water supply delivery models, the role and importance of culture and community in sustainable market development has been woefully under-examined. By emphasizing the cultural dimensions of water, localist water governance contributes to the improvement of public health, along with the spread of a collectivist, sharing and gift-giving ethic of solidarity. Furthermore, despite the monstrous complexity which permeates the management and supply of water resources, cooperative alternatives have offered and will continue to offer viable solutions for the global South, especially in light of the fact that conventional delivery systems have tended to favour the interests of wealthy citizens and affluent neighbourhoods.
As it was in Smith’s time, water remains much more useful than diamonds. Everybody’s lives will increasingly come to depend, however, on how it comes to be exchanged.
Bakker, Karen (2007) Commons or Commodity? The debate over private sector involvement in water supply. In K. Baker (Ed.) Eau Canada: The Future of Canada’s Water. Vancouver: UBC Press.
Barlow, Maude (2001) Blue Gold: The Global Water Crisis and the Commodification of the World’s Water Supply. San Francisco: International Forum on Globalization.
Gleick, Peter (1998) “Water in crisis: paths to sustainable use.” Ecological Applications, 8(3), 571-579.
Kirby, Alex. (2000) Dawn of a Thirsty Century. (Accessed 8April) available at http://news.bbc.co.uk/1/hi/sci/tech/755497.stm
McCarthy, James and Prudham, Scott (2004), “Neoliberal nature and the nature of neoliberalism.” Geoforum, 35(3), 275-283.
Pamukcu, Konuralp (2003), “Water trade between Israel and Turkey: a start in the Middle East?” Middle East Policy, 10(4), 87-99.
Postel, Sandra (2003), Last Oasis: facing water scarcity. 2nd ed. New York: Norton Company Ltd.
Unicef, (2005), World Water Day 2005: 4,000 children die each day from a lack of safewater. (Accessed 2 September 2011) Available at http://www.unicef.org/wash/index_25637.html