June 24, 2019
Arroyo
, pages 1-16
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16 pp.
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Water Resources Research Center
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Tucson, AZ
Few pairings provoke as passionate a response as the coupling of water and money; however, water is deeply rooted in our market economy, often in invisible ways. In classic free-market economic theory, price should reflect value, but water’s value is obscured by its nature, and by history, cultural attitudes, and related factors. As the economist Adam Smith wrote in the 18th century, “Nothing is more useful than water but scarcely anything can be had in exchange for it.” This observation reflects the absence of a market for water in the classical sense, which requires well-defined and easily comparable products.