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Originally Posted by liberty1776
Cities will be built where there is a water source. History shows us this. Many cities are built near rivers because this is where the water is.
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Oh I'm sorry I seemed to remember New York City having a massive infrastructure to bring clean water into the city. The simply fact is, if water was privatized in New York City the cities economy could be ruined in months if a water company wished to make a quick buck.
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If people are paying for the water, and the market clears, the price is where supply equals demand. Even if, as you say, the demand for tap water (that is, water comming through pipes) is inelastic.
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No its not. When MC=MR the market won't have a surplus, but under a monopoly it will not be selling where S=D. Its rather simple economics, if the Austrian School were good enough at marginality they'd understand this.
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But, as I said, I don't think demand is inelastic. When the price rises above a certain level, people will begin to look for alternitives. For example, they might have a well dug, or they migh have water delivered. Will these things cost more than the city supplied (or controled) water? Probably. But this is not, in any way, a failure of the market.
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We are talking inefficiencies. Inefficiencies should be avoided whenever possible because it means people are getting less for more. Competitive Markets create efficient outcomes, monopolies do not, which is why governments break up monopolies, and when they cannot break them up, force them to submit to regulation.
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With which tenant of Austrian theory do you disagree?
And the Austrian School does not repeat the same mantra, they have changed and updated ideas several times.
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Laissez-faire is as tired and dead as Marxism. In fact whenever it was implemented people rebelled against it, and curtailed its oversteps and abuses.
Surely, if it worked nations which implemented would be far more economically advanced then the moderate systems of the OECD. Oh I know you're going to use the old marxist cop-out that its never been really tried.