News flash: Mother nature does not respond to market forces



Yuhas lives in the ultra-wealthy enclave of Rancho Santa Fe, a bucolic Southern California hamlet of ranches, gated communities and country clubs that guzzles five times more water per capita than the statewide average. In April, after Gov. Jerry Brown (D) called for a 25 percent reduction in water use, consumption in Rancho Santa Fe went up by 9 percent.[1]

Meanwhile, “Mendota already has the worst unemployment rate in California, somewhere between 35 and 41 percent. That doesn’t include the undocumented workers, whose numbers are significant.” The drought is making it worse as Central Valley farms run out of water.[2]

You won’t find either Rancho Santa Fe or Mendota along a major freeway. Rancho Santa Fe is east of Interstate 5, where it runs along the Pacific Coast, south of Los Angeles. Mendota is a Central Valley farm town that I drove through on state routes in younger days because I was less likely to encounter the California Highway Patrol—and get a speeding ticket—than if I stayed on main roads and drove through Fresno, when I lived in Selma, about 15 miles south of Fresno. The difference is that the rich choose to isolate themselves. The poor in Mendota are there because there is, sometimes, work there.

But there’s plenty of water in Rancho Santa Fe if, like Steve Yuhas, you’re willing to pay for it.[3] The price may eventually include fines,[4] but Yuhas is wealthy enough to live in Rancho Santa Fe and is, according to Wikipedia, a conservative radio host.[5] He may well imagine that it will be worth it to make his point.

It is precisely this kind of conflict that illustrates the shortcomings of so-called market signals, that people like Friedrich Hayek think are a more efficient means of information than central planning.[6] And, as we see in Mendota, what it really means is that Yuhas’ money is more important than poor people’s lives.

  1. [1]Rob Kuznia, “Rich Californians balk at limits: ‘We’re not all equal when it comes to water’,” Washington Post, June 13, 2015,
  2. [2]Evelyn Nieves, “California’s farm towns are losing jobs and dying of thirst,” Salon, February 13, 2014,
  4. [4]Matt Stevens, “Another DWP bill? No: ‘You are in the top 1% of all residential water users’,” Los Angeles Times, June 26, 2015,
  5. [5]Wikipedia, “Steve Yuhas,” n.d.
  6. [6]F. A. Hayek, The Collected Works of F. A. Hayek, ed. Bruce Caldwell, vol. 2, The Road to Serfdom: Text and Documents; The Definitive Edition (1944; repr., Chicago: University of Chicago, 2007).

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