1.) Wells cannot be dug everywhere, even many places
2.) Bottled water doesn't run showers, toilets, or clean plates, further 1 dollar per liter is price gouging

Water should be sold where supply equals demand when all externalities are adjusted for. Without government regulation this will never be the case. So the Water companies have to charge less money then a dollar a gallon, 75¢ per gallon is still exploitation.

And do you realize how incredibly inefficient shipping water by truck would be? Capitalism is the best system because it is the most efficient system. Laissez-Faire Capitalism is what happens when people completely forget about the idea of efficiency because its just too hard for them to understand.

These are what real economists refer to as "hacks" they're not very good economists, they don't actually have any proof, or econometrics, or "evidence" they just have poorly based theories and ideologies they defend tooth and nail.

They're no different then Marxists.

Competitors cannot enter the market. Thats why there are monopolies. Monopolies aren't some myth that the hacks you've been reading make them out to be, they're real, and they happen on there own in a number of markets.

You're right, wells can't be dug everywhere. If someone lives in an area where a well can't be dug, or remote area where water cannot be deliverd cheaply, I say "tough cookies." I don't live in a place like that, and there is no reason I should have to pay with a decreased water supply because someone is bitching about having to pay too much for water.

And why is $1 a litre gouging? This seems to be the market-clearing price. If people thought it was too high, they would not buy it, the supplier would have a surplus and either go out of business or lower his prices. You might think that $1 a litre is gouging, but your oppinion is of no relevance in an exchange between two people.

No, those economists are not hacks. They are tenured economists at four year schools. Block even has an endowed chair. These are not hacks. You are right about their methodology. While other economists look at data and expect a theory to pop up, Austrians use logic. As you have argued, people behave outside of nice neat equations. Austrians don't pretend to be able to predict the exact future of an economy.

Which of their theories do you think are bad?

When has a monopoly arisen in the way you desribe.

__________________
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

Cities could not exist under such a circumstance.

You realize that the most efficient pricing is when supply equals demand correct?

$1 isn't where supply equals demand but because a person needs water to live they'll be forced to pay it. When you hold the only means of the survival of the citizens of a city, it should be charged as if there was a competitive market, as a result of being allowed by the people to hold such a position.

Tenure doesn't mean the guy isn't a hack. Many times hacks congregate together, surrounding themselves with more hacks so they can claim to be "economists" without having to be challenged on it.

Economics, while is may be a dismal science, is still a science. With no testing you don't have science you have theology. Which is useless for public policy.

Real economists can and do predict the future fairly accurately, and when they fail they reanalyze and fix there theory. the Mises Institute and the Austrian School of Economics simply repeat the same mantra regardless of the results.

Any water firm is a natural monopoly in the long run. It's simply not profitable to compete.

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.

You realize that the most efficient pricing is when supply equals demand correct?
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.

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. People that live closer to water are going to enjoy lower prices for water. People that live far away from a source of water are going to have to pay more for a water. I don't see why this is such a market failure. And if this is a market failure, many other things are also market failures. Are we going to invite the state to regulate everything because some people must pay more for a particular good because they live far from where the good is produced?

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.
If Austrians, as you say, are hacks that must group together in one school to protect eachother, how do you account for the fact that there are Austrians all over the world in colleges (tenured and not tenured)? Further, how do you account for the fact that F.A. Hayek, and Austrian Economist, won the Nobel Prize?

__________________
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

Sorry, I forgot something in my last post.

Austrians are not considered hacks by most economists. The founder of the school, Menger, is one of three people who were the founders of the marginal revolution. The other two are Walrus and Jevons, all three of these men are respected by most economists. Further, the fact that many Austrians might congregate at one school (and, as I said, there are Austrians around the world) does not mean that they are 'hacks.' The Chicago School congregates at the University of Chicago, are they hacks?

__________________
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

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.

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.

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.

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.

And what would happen if a water company raised prices too high? Competitors would enter the market, and charge a lower price than the monopoly. When has there ever been a natrual monopoly that is not supported by the state?

Let me think about this, I might be wrong. By the way, I don't know what the Austrian perspective on this is.

Again, when has a natural monopoly existed with out the help of the state?

When?
What nations? Russia has implemented free market ideas, and while Russia currently sucks, it is growing faster than the U.S.

__________________
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address