Why Isn’t Water Expensive: An Explorative Analysis

It is a very interesting question: why, given its critical role in sustaining life, is water not considered an expensive commodity? This paradox has puzzled economists and social scientists for centuries. Adam Smith, the famous economic theorist, pointed out this anomaly in his works.

The Paradox of Water Economics

From a purely economic perspective, water should be a premium product. However, this is not the case. Diamonds, despite their decorative value, are far more expensive than water, which is essential for survival. This phenomenon raises questions about the basis of value and pricing in markets. Why is water, which is vital for sustaining life, not expensive?

A Bountiful Resource

Given that water is a basic necessity for all living beings, one might wonder why it is not more expensive. The answer primarily lies in the abundance of water on our planet. Water is a natural resource that is widely available in many parts of the world, thanks to the intricate water cycle. This cycle plays a crucial role in distributing water across the globe.

The Water Cycle: Nature's Lifeline

The water cycle, also known as the hydrological cycle, is an elegant and efficient process that sustains life on Earth. Here’s a breakdown of this natural phenomenon:

Solar Energy and Evaporation: The sun’s energy heats water bodies (lakes, rivers, oceans) causing water to evaporate. This process increases the amount of water vapor in the atmosphere. Condensation and Cloud Formation: As the water vapor rises, it cools and condenses, forming clouds. These clouds are suspended in the atmosphere, waiting to be influenced by specific conditions such as wind patterns, temperature changes, and the presence of mountains and hills. Precipitation and Collection: When the clouds are thick enough and under the right conditions (i.e., the influence of hills or mountains), the water condenses further and falls as rain. This process is the natural method for collecting and distributing water across the earth's surface.

Once the rain falls, it is collected in various forms such as rivers, lakes, and ponds. It is generally considered clean and safe for consumption, provided it is not the first rain that often contains pollutants. This natural cycle ensures a continuous supply of water, making it abundantly available and decreasing its economic value.

Human-Induced Scarcity and Its Economic Implications

However, in certain regions of the world, the availability of water is not a given. Arid and semi-arid regions like parts of the Middle East and North Africa experience significant water scarcity. In these areas, the cost of water can be much higher due to the need for desalination or elaborate water distribution systems.

Market Dynamics and Competition

The primary reason why sellers of water do not make it prohibitively expensive is due to the basic laws of market dynamics and competition. If a water seller attempted to set prohibitively high prices, other suppliers would quickly enter the market to offer cheaper alternatives, thereby ensuring a competitive environment that keeps prices moderate.

Conclusion: Understanding the True Value of Water

The value of water is not just a matter of its monetary cost. As a health expert once lamented, the true value of water lies in its essential role in sustaining human life, ecosystems, and overall well-being. While the water cycle ensures its widespread availability, it is the recognition of its critical importance that truly underpins its economic significance.

In conclusion, the affordability of water is a testament to the natural systems that sustain life on Earth. However, it is essential to recognize the critical role played by ensuring access to clean, safe water for everyone, regardless of geographic location.