As to surface waters, resource-economists in the 17 arid western states rarely touched the topic without first protesting their allegiance to the sanctity of private vested interests based on histories of prior "use", however factitious and however sullied by Henry George's "force and fraud", two spare words that hardly do justice to all they cover, like conquest, violence, corruption, stealing, graft, ethnic bias, pettifoggery, differential financial power, and even at best, obsolescence. In practice, prior "use" has been faux (phony, that is), simply proportionate to prior ownership of land. This has overridden State constitutions that ALL say that ALL the waters in the State are the property of the people of the State --nothing there about just the landowners of the State, a point rediscovered by U.S. Chief Justice Earl Warren in his opinion overriding the California Supreme court in the classic case of Ivanhoe Irrigation District v. Courtney McCracken et al, 1958 ("The Central Valley Project is to serve people, not land" wrote Warren).
Lost in the torrents of praise for private tenure has been the process of privatizing the public domain: who would get the tenures, and how? How would the process affect their motivations? This is vital because the process comes first, and is ongoing as more and more public domain is privatized, and progressive intensification of use calls for more and more stringent forms of tenure: from hunters to trappers, from trappers to shepherds, from shepherds to cattle ranchers, from ranchers to plowmen, from plowmen to irrigators, from flood and furrow irrigators to sprinkler and drip irrigators, from dairymen to croppers, from root-croppers to viticulturists and horticulturists, from them to greenhouses, from them to hunt-country estates, from estates to housing, from housing to subdivisions, from them to garden apartments and stores, from them on up to low-rise, then high-rise apartments, to industry, retail commerce, offices, towers " each step, and several in between, needing closer tenures, while down below there are minerals and hydrocarbons in situ, in between are rights of way, and above there are airlanes, air the gas, the radio spectrum, the geo-synchronous orbit, and whatever comes next.
The dominant, if not universal process of privatizing is summed up in the two paramount principles in the "appropriative doctrine" of water law: "First in time, first in right"; and "Use it or lose it". The first one says that grandfathers take the easy pickings while grandchildren and other late comers have to struggle, or pay for what is left, or go without -- "I got here first, too bad for you". The second one says, in practice, you must go through the motions of "using" the resource, however factitiously, however wastefully -- and this, in turn, often means owning land on which to waste it. Then it is "Waste today, want NOT tomorrow."
Think about the incentive structure this process creates. The value of appropriating a resource today is the rent you expect it to yield tomorrow, and tomorrow, and tomorrow, to the last syllable of recorded time. To appropriate it today you waste it today. Then you support economists to tell the world that you must privatize it in order to keep from wasting it.
The Preemption Act of 1841, and later The Homestead Act of 1862 represented a primitive form of prior appropriation, where people suffered hardship and danger for years to establish private tenures over public lands. In national mythology this is how we won the west, labor-intensively. Later historians showed, however, that capital ("front-money") was the key to winning private tenures from public domain, especially if the land was granted in return for building railways or canals, where big corporations dominated. Ever since it has been that, the ability to survive economically while losing money for years, not to mention corrupting politicians with "generous" contributions. In addition it has been ability to finance "land-grabbing" forms of new and superior capital: bigger faster fishing boats, sonar, higher-powered rifles, pumps to keep water from drowning out deeper mines, canals and then railroads, dredges, levees, broadcasting stations to establish usage of radio frequencies, weirs and ditches to divert surface water, deepwell turbine pumps for groundwater, advanced geology for minerals and hydrocarbons " whatever it takes to rape mother Earth.
Pigovian Efforts to Ally Economists with Enviros and Natural Scientists, 1961-73
Meantime England, a more settled nation, spawned Cambridge Professor of Economics Arthur Cecil Pigou, successor of Alfred Marshall. Pigou put his odd-looking Huguenot name on a simple, workable, common sense way of using familiar supply/demand theory to ration public domain among private users: put a price on it. If we made the price of anything like, say, butter, free, we would immediately create a shortage, as demand rose and supply fell. So charge people for polluting the air, reasoned Pigou, and we needn't use "command and control" techniques to teach good manners to polluters. We can use a market mechanism, clean the air, equate supply and demand, and raise public revenues all in one stroke.
It was only an academic theory for years, but such effluent charges are still called "Pigovian". For his pains, his critics are now, in this year of our Lord 2011, wasting serious time on rumors that Pigou, a favorite of market-oriented economists from Alfred Marshall to Gregory Mankiw, was a secret Soviet agent. These critics are not just demagogic talk-show preachers from Cape Girardeau, as one might surmise, but supposedly objective professors, stifling a viable alternative to the rival "Coasian" policies, as we will see.
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