184 The Political Economy of Resource Use 



improvements increasing agricultural outputs per man and per acre, 

 to take very seriously possible future shortages of food and fibers. 

 Nevertheless when we consider land and water — and possibly energy 

 supplies — as distinct from the particular products of land, water, and 

 energy, we are considering the country's resource base. Any substan- 

 tial diminution of this base involves a reduction in the potential, not 

 of particular outputs, but of output over-all. 



As I have indicated, the major water problems that now confront 

 the United States, though serious, do not seem to me to be, in the 

 main, conservation problems. In the West, where water is scarce, the 

 principal problem seems to be to assure, in the face of numerous 

 claimants, its most productive uses. Among these claimants are politi- 

 cally potent pressure groups and the various states that share control 

 over particular water sources. In part the objective should be to assure 

 the supremacy of the market against the encroachment of special in- 

 terests. But for those water uses for which the market does not pro- 

 vide an appropriate test, such as recreation and flood control, public 

 intervention is necessary. 



East of the Mississippi, a — possibly the — major problem is water 

 pollution. Here the primary issue is not conservation — though a com- 

 parison of present and future costs and benefits is no doubt involved 

 — but external diseconomies. The discharges of water users upstream, 

 for example, increase the costs per unit of water use downstream. 

 Public intervention may well be needed to purify the discharge or, at 

 least, to assess the cost to its proper source. 



The time rate of use, though not the primary issue in the water poli- 

 cies relevant to these problems, nevertheless is a consideration. And it 

 is an important consideration in policies concerned with assuring the 

 continuity of, and moderating the variations in, stream flow. The pri- 

 mary wastes sought to be avoided in multi-purpose river valley devel- 

 opment probably belong in the category of external diseconomies; but 

 a close second is waste connected with an improper time distribution 

 of the rate of use. 



Public policies relating to agricultural land use exhibit a similar 

 mixture of objectives. But conservation, in the narrow sense of the 

 term, has probably been a more important consideration than in the 



