Rationing versus pricing
There are situations when rationing is perfectly sensible. A besieged city, for example. There is only a certain amount of food to go around, there is no way to increase the amount, everyone is in it together, everyone needs roughly the same amount. So rationing makes perfect sense.
In modern "total wars" (which are much like big sieges anyway) food rationing also makes sense, for essentially the same reasons. There is more capacity to increase production, but there are other things one also wishes productive effort to go into (tanks, planes, munitions, ships: that sort of thing).
Generally speaking, however, rationing is a poor way to deal with scarcity. It does nothing to encourage extra provision and very little to encourage innovation in resource use. It consumes resources in implementation, particularly enforcement. It often imposes a particular set of preferences regardless of how widely these are shared (or not), making various forms of evasion more likely.
Scarcity pricing works much better. It uses the normal enforcement mechanisms against fraud and theft. Extra use is immediately penalised, less use rewarded. So it encourages folk to use less. It provides resources for innovation and expanded provision. It allows folk to make their own judgements about what is important to them or not.
The use of various forms of rationing to deal with Victoria's water shortage seems to be motivated (if it is not just prejudice against market mechanisms) by a wish to shield agriculture and industry from the burden of water restrictions. This is deeply silly. Agriculture and industry, generally speaking, have at least as much capacity to adjust their use as households. Quite likely more so, because they are higher users for specific purposes, hence changes in technology are likely to be easier and have bigger effects.
The creation of a rebate scheme for water saving is a bureaucratic way of messily trying to match the same effect that scarcity pricing would do all by itself.
While water is being charged at about 80c a kilolitre, Victoria's genuine water problem is not being treated seriously. While some users are being treated as somehow in a profoundly different situation than other users, it is not being treated seriously either. Raise water prices. A lot. Do it now.*
* low income folk can be given discounts and/or rebates in the normal way.
In modern "total wars" (which are much like big sieges anyway) food rationing also makes sense, for essentially the same reasons. There is more capacity to increase production, but there are other things one also wishes productive effort to go into (tanks, planes, munitions, ships: that sort of thing).
Generally speaking, however, rationing is a poor way to deal with scarcity. It does nothing to encourage extra provision and very little to encourage innovation in resource use. It consumes resources in implementation, particularly enforcement. It often imposes a particular set of preferences regardless of how widely these are shared (or not), making various forms of evasion more likely.
Scarcity pricing works much better. It uses the normal enforcement mechanisms against fraud and theft. Extra use is immediately penalised, less use rewarded. So it encourages folk to use less. It provides resources for innovation and expanded provision. It allows folk to make their own judgements about what is important to them or not.
The use of various forms of rationing to deal with Victoria's water shortage seems to be motivated (if it is not just prejudice against market mechanisms) by a wish to shield agriculture and industry from the burden of water restrictions. This is deeply silly. Agriculture and industry, generally speaking, have at least as much capacity to adjust their use as households. Quite likely more so, because they are higher users for specific purposes, hence changes in technology are likely to be easier and have bigger effects.
The creation of a rebate scheme for water saving is a bureaucratic way of messily trying to match the same effect that scarcity pricing would do all by itself.
While water is being charged at about 80c a kilolitre, Victoria's genuine water problem is not being treated seriously. While some users are being treated as somehow in a profoundly different situation than other users, it is not being treated seriously either. Raise water prices. A lot. Do it now.*
* low income folk can be given discounts and/or rebates in the normal way.