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Water shortages and water-trading between states

My former state of residence, Georgia, is in a severe drought. It has been for years. It has gotten worse and worse over the last couple of years. Naturally, only government intervention in the water market can cause a true shortage. As far as I understand it, governments in the southeast have done this by keeping utility prices artificially low and, of course, by controlling a large portion of the water supplies of cities and counties. That type of socialism on that large of a scale can’t possibly calculate.

My current state of residence, Michigan, has never had a water shortage that I know of, especially not recently. I think this is because it gets plenty of precipitation and, well, it’s surrounded by three Great Lakes.

While allowing the prices of water to rise in the southern, drought-stricken states would lower demand and encourage conservation of water, thereby bringing supply and demand closer to an equilibrium, it seems obvious that increasing the supply of water would also help southerners a lot with their water shortage.

So why don’t states just sell water to each other? If they do, it certainly isn’t on a large scale. This has puzzled me for many months. Do you know the reason? Michigan is in a recession and its state government is in desperate need of higher revenue (from its perspective; obviously what it really needs is lower expenditures, in the zero dollars and zero cents range). I hear people on the radio talking about how that damn Governor Jennifer Granholm and that damn Michigan legislature had better not let other states take our water. I assume both the professional criminal class in Michigan and its captive subjects have considered and analyzed the possibility of some city/county/state governments selling water to other city/county/state governments, but you don’t hear of this happening very much. There isn’t really a water market across the country, is there? You never hear of Georgia negotiating with Michigan to buy so many billion gallons of water, or importing water from midwestern or western states, or anything like that.

Do you know if there are any laws that impede this happening? Is it because our local governments are so incompetent, short-sighted, and technologically backwards that they can’t manage to hold and transport enough water over a large enough distance to make it viable?

One thing I considered was that local perturbations of the water market by, say, Georgia state, county, and city governments keep the prices of water so artificially low that it isn’t profitable for people in Michigan to store and transport water 700 miles away to sell in Georgia. If the free market were allowed to work, prices of water would be higher, and anyone selling water to Georgians would make more money per gallon, so this revenue could cover the costs of selling water several states away and attract new profit-seeking suppliers of water to southeasterners; with prices of water kept “affordable” by law, there isn’t enough money to be made, so it isn’t profitable, so nobody attempts it. Maybe that isn’t the reason, though.

Posted in Economics, Property rights, Socialism