Neoliberal solutions for neoliberal problems: patching the leaks in the water industry

Dr. Jeff Langholz has a grand idea about revolutionising the water industry in a time of crisis. His solution to water disputes was born here in Monterey, and is taking the form of WaterCity, a for-profit social adventure which, even in its infancy, has promising solutions to the issue of water scarcity, namely here in California, but with global potential. WaterCity mirrors its solar energy market ally, Solar City, in that it offers no-strings-attached, free, sustainable structures that guarantee to relieve the pressure for water in households and businesses alike. It aims to do this not through an exclusively conservation-focused approach, or though the redistribution of water. In what could be deemed as classic liberal phraseology, Dr. Langholz insists that WaterCity will not focus on dividing the water available to us, but rather “enlarging the pie”, by quite literally pulling water out of the air, through rainwater harvesting, water recycling and atmospheric water generation, making scarcity a thing of the past, and acting to mitigate conflict.  WaterCity offers stress-free and cost-free installation, maintenance, repair and replacements, all while promising to reduce the cost of water by phenomenal proportions.

What I as a student found most impressive and most ambitious concerning the WaterCity schema, is not the obvious environmental and direct conflict-mitigating effects of this project, but the scale of the water systems it proposes, and the repercussions it could have for the state, the corporate water sector and even the state itself. Herein lies the principles of the forthcoming water revolution. Dr. Langholz promises that the future of water lies in its decentralization. This implies that both paradigms concerning the water provision industry and the scale of water production are in dire need of reform. Concerning the issue of scale, Dr. Langholz points out the pollution and environmental destruction caused by dams and large-scale reservoirs that make today’s paradigm for water production fundamentally unsustainable in ecological terms. Turning to economic terms, Dr. Langholz illustrates what is well-known and almost universally relatable across the United States: the frustration with the remarkably high cost of water. Single households, businesses, or cross-community sustainable water systems, as proposed by WaterCity, will actively work against the corporatization and monopolization of the water industry that spur these oft-unaffordable water bills.

If it sounds too good to be true, it’s likely not, but there are certainly risks and caveats that one should be aware of when analyzing WaterCity. To understand these caveats, I will phrase the water crisis, at least in California, as a fundamentally neoliberal problem. I use this phraseology not out of spite for neoclassical liberalism in general, but based upon the support that deregulatory non-interventionist and pro-private enterprise ideology, particularly since the Reagan years have brought about the commoditisation of water. Water is no longer a right, it is to be paid for by the individual, who has agency for his own well-being, and is expected to work for water. It has also been gifted to the hard-working entrepreneur, who found himself wealthy enough to be the head of California Amercian Water, or rather the hegemon of California’s entire water supply, with a hand on the faucet, threatening to cut the flow of those who don’t work for water. Yet WaterCity is not, by any stretch of the imagination, a statist solution.The primary difference between Langholz’s project and the present water distribution regime is not that California American Water and WaterCity find themselves on opposite sides of the same ideological coin. In fact it’s just as neoliberal a solution as the problem of commoditized water itself. The divergence WaterCity wishes to see from the status quo is not only that water supply should be decentralized, but that the industry needs to be demonopolized. This means that in order to drive down costs and profits to truly de-commoditize water, and enshrine it once again as a public good, privatized water production act as competitive, benevolent agent, with numerous players in the industry. Related to this point it is clear that Langholz has great faith that WaterCity is not merely a flash in the pan, but that from WaterCity will emerge companies who “can’t hurt you the way governments do.” While the privatization of a public good may seem to be an oxymoronic term, this model seeks to delegitimize the state in a way that not only lifts the hearts of orthodox neoliberals, but promises a fair deal to consumers and environmentalists alike.

Yet inherent in the re-liberalization of water is the fact that companies such as WaterCity remain dependent upon success, as a firm, but also as an ideology. Enough companies similar to WaterCity need to form for the magic of capitalist competition to actually lower the costs for water substantially. I close with a series of questions I ask my fellow participants to reflect upon and discuss, for I wrestle with them too much to analyse them coherently. Could a failure of the project to get off the ground render it a mere write-off on the balance sheet of one of its venture capitalist investors? What safeguards should be implemented to ensure that WaterCity remains as sustainability focused ? Could government intervention and regulation cruelly halt its momentum, or even tarnish its price or profit margins? Can or should the government resist the urge to meddle with WaterCity, and maintain the statist-liberal divide in the provision of natural resources? We mustn’t dismiss questions as broad as these, for an essential resource is at stake. To gamble upon a small-scale venture as the future of the water industry is a risk that could jeopardise the peace as much as it could preserve it. That is to say, we must consider whether playing with water is, in turn, playing with fire.