The Wall Street Journal’s “Notable & Quotable” section this morning flags one of Don Boudreaux’s typically insightful posts from his CafeHayek blog (very much worth reading for basic booster shots of economic literacy) about the emergence of bottled water a couple decades ago:
I remember back in the late 1970s or early 1980s when I first noticed that still water began to be offered for sale in single-sized bottles. I was convinced that this product would fail. ”Who would pay for still water in single-sized bottles when still water can be gotten for free out of water fountains and water coolers or at zero marginal cost out of faucets at home?” I reasoned. Whether I reasoned rightly or wrongly, my prediction proved wrong. Reason, you see, is a wonderful and necessary tool, but also one of limited power. My reason could not reveal to me the preferences of millions of other people. My reason could not reveal to me the ambitions and the creativity of entrepreneurs. My reason could not reveal to me the details of an open-ended future in which people are free to spend their money – as consumers, as producers, and as investors – as they wish.
Had I been a government planner in the 1970s or early 1980s – a planner with the finest training, the highest integrity, and a most intense desire to serve my fellow citizens well – I would have counseled against directing society’s scarce resources into the production and distribution of single-sized bottled still water. My reason would have assured me of the prudence and correctness of my decision. And if I were such a government planner whose diktat would have been heeded, no one would ever have learned that my decision stunk. Being prohibited by the state from being offered to consumers, still water bottled in single-sized servings would never have had the chance to grow into the multi-billion dollar industry that it is today. That innovation passed the market test – an outcome that couldn’t have possibly occurred had not producers and consumers had the freedom actually to conduct this market test.
I think Don misses one thing here: many environmentalists today hate bottled water, and would not hesitate for a moment to ban bottled water if they had the power to do so. In other words, most environmentalists (and liberals generally) are totally if not willfully oblivious to the sensible and important point Don makes here.
But it gets better. Why did the bottled water market take off the way it did? One reason is that environmentalists kept trying to scare us with stories about how our tap water was “dangerous.” So in addition to arrogant reason, the doctrine of unintended consequences has shown up for duty again, as a chief reason for the bottled water boom was the bobble-headedness of environmentalists. One of the environmental complaints now is that plastic water bottles are ending up in the ocean, etc. Well they should have thought of that before setting out to scare us about tap water, eh?
The Clean Water Act mandates that public water systems report even de minimis trace elements of every scary thing you’ve ever heard, even when the levels may not be anywhere near a harmful level. And tested bottled water has sometimes been found to include higher levels of heavy metals than tap water; after all, what do you think is down there in those “natural springs” that end up in your plastic bottle? A recall of a batch of Perrier once tested out with detectible levels of benzene. Heh.