Libertarians and Public Infrastructure

Shane Hazel is the most famous libertarian in America. Now known as “The man who cost Republicans the U.S. Senate,” Hazel achieved his instant national fame, or infamy, depending on who you ask, by running as a Libertarian last November against David Perdue and Jon Ossoff in the Georgia’s U.S. Senate race. Hazel earned 2.3 percent of the vote, which threw into a runoff the race that Perdue had come within 0.3 percent of winning. Perdue lost the runoff, and the rest is history.

In defeat, Hazel scored a remarkable victory. He served notice to Republicans that if their congressional voting record is comparable to liberal democrats, and Perdue’s was, they’ll get knocked off by a third party candidate that promises to uphold the U.S. Constitution. That’s a tough lesson.

If your preference is to reform the Republican party from the inside, thus preserving its viability against an even more dangerous Democratic party, it’s hard to accept the decision by Libertarians to run candidates in close races. Hazel appeared to rub it in when Reason quoted him saying “Give me your tears. They are delicious.” In response, in several recent articles I referenced Hazel, in unflattering terms, as a prime example of how Libertarians are enabling Democrat victories.

These criticisms, directed at Libertarians in general, and Hazel in particular, earned me an invitation from Hazel to appear on his podcast. We spoke a few days later, on February 25. During an 81 minute back-and-forth, two things became clear to me. First, for all his apparent bombast, Hazel is a sincere man, whose political activism is inspired by deeply held beliefs. To make this observation has consequences. Hazel cannot be dismissed merely as a spoiler. He has serious intentions and a productive way forward is to have a serious conversation.

The second take-away from talking at length with Hazel was that although we shared something very fundamental in common – love for our country and respect for its constitution – on matters of policy there areas of agreement, such as 2nd amendment rights, but also areas where a lot of further discussion is warranted.

One of those areas, which in the online discussion with Hazel I described “as a flashpoint philosophically because what would it mean if we didn’t have them,” is the existence of public utilities. This is a good place to start an ongoing debate with Libertarians, because brings the issue of public and private space into sharp relief and offers concrete examples.

California’s water project, one of the biggest water infrastructure projects ever built, is a timely example. Built primarily back in the 1950s and 1960s at a cost, in 2021 dollars, that is unimaginably cheap, this complex of dams and aqueducts moves millions of acre feet from snow watered reservoirs in Northern California to cities and farms in Southern California. Without the California Water Project, the urban megapolises of the San Francisco Bay Area and all of coastal Southern California including Los Angeles and San Diego would not exist, nor would millions of acres of farmland in the San Joaquin and Imperial valleys.

Notwithstanding that many critics of California’s contemporary politics would be thrilled if the San Francisco Bay Area and Los Angeles did not exist, the California Water Project is a massive public work, which, like America’s interstate highway system, and most major airports, was constructed with taxpayer funding and enables millions of people to fly, drive, and drink water. Are public works the best way for a society to sustain urban civilization?

To explore this question, set aside the notion that urban civilization is unsustainable. It’s here. While one model of the future might see a benefit in existing cities becoming less densely populated instead of even more densely populated, short of apocalyptic disaster scenarios, cities will remain, and the millions that live in them will require energy, water, and transportation conduits.

In California, attempts to expand water infrastructure, or even maintain what we’ve got, are met with opposition from two sources: powerful environmentalist pressure groups, and anti-tax activists, many of them libertarians.

The Battle for Desalination

Taking water from the ocean and turning it into fresh water is a proven way to guarantee an uninterruptible supply of water in an arid region. From Saudi Arabia and Israel to Singapore and Australia, desalination plants around the world are already producing billions of tons of fresh water every year. California’s southern coastal cities, situated in drought prone areas, could benefit from desalination plants.

In a rare display of political courage and common sense, California Governor Gavin Newsom has been working to finally grant permits to construct a second major seawater desalination plant on the Southern California Coast.

Concerns about desalination along with the responses could occupy volumes, and have. But the notion that there is any sort of consensus among environmentalists that seawater desalination is a bad choice is false. Every option to supply the resources required to sustain urban civilization is fraught with tradeoffs. With Californians possibly facing yet another drought, desalination offers a way to take pressure off countless stressed ecosystems upstream.

Economic arguments offer a more credible case against desalination, but can fail to acknowledge the variability of the market price for water. In drought years, municipal water purchasers and farmers with perennial crops have paid well over the price for desalinated fresh water, which for San Diego’s Carlsbad plant comes in at around $2,000 per acre foot. To be sure, this price is well in excess of the wholesale price for water in wet years, which can drop well under $500 per acre foot. But for an urban area such as Los Angeles, situated on an arid desert located 500 miles or more from its sources of water, adding the expensive but certain option of desalinated water to a portfolio of water procurements is a prudent bet.

Water supply resiliency is not merely dependent on weather. Even if a Sierra snowpack reliably forms winter after winter for the next several decades, residents of the Los Angeles Basin still depend on three aging canals, precarious ribbons that each stretch for hundreds of miles. Earthquakes, terrorism, or other disasters could shut them down indefinitely. In an average year, 2.6 million acre feet of water is imported by the water districts serving the residents and businesses in California’s Southland counties. The 701 mile long California Aqueduct, mainly conveying water from the Sacramento River, contributes 1.4 million acre feet. The 242 mile long Colorado River Aqueduct adds another 1.0 million acre feet. Finally, the Owens River on the east side of the Sierras contributes 250,000 acre feet via the 419 mile long Los Angeles Aqueduct.

A Libertarian Makes the Case for Desalination

In a recent book “Winning the Water Wars,” published in 2020 by the Pacific Research Institute, author Steven Greenhut concludes the solution to California’s water challenges is to pursue an all-of-the-above strategy that embraces abundance, or as he puts it “feeding more water into the plumbing.” He writes: “In addition to building more surface and groundwater storage facilities, California can deal with its water problems by building ocean desalination plants and increasing its commitment to wastewater reuse and other innovations.” If Greenhut, who talked with countless experts while researching his book, and who is a confirmed libertarian, can support the economics of public and private investment in desalination, anyone can.

A series of California Policy Center reports in 2018 expand on the concept of water abundance. Part two of the report, “How to Make California’s Southland Water Independent for $30 Billion,” surveys existing investments in desalination and wastewater reuse and comes up with the following capital budget: $7.5 billion to build the treatment plants to annually recover and perpetually reuse the 1.0 million acre feet of wastewater that currently is still treated and released into the Pacific Ocean. Another $15 billion to build desalination plants with a combined capacity of another 1.0 million acre feet per year. And $7.5 billion to upgrade and optimize the capacity to capture runoff, mitigate the capacious aquifers beneath the City of Los Angeles, and use them all for water storage.

This is the sort of water project that should be animating California’s politicians. There are 5.1 million households in the three counties that would benefit from this scheme – Los Angeles, Orange, and Riverside. A $30 billion capital improvement bond would cost each household $384 per year. If revenue bonds were to pass half the cost to ratepayers – a reasonable burden that would bring even desalinated water down to an affordable consumer price – the general obligation bonds would only add new taxes of $192 to each household. Debt like this is referred to as “good debt,” because it yields tangible and lasting benefits to taxpayers. “Bad debt,” by contrast, is the $100 billion or so that would be necessary to complete California’s proposed “bullet train,” a nearly useless make-work project that will be obsolete before it’s even done.

Is There a Practical Alternative to Public Utilities and Public Works?

Opponents to public works correctly point out that the use of eminent domain to acquire the right-of-way for power lines, aqueducts, and freeway corridors is a violation of property rights. But these objections, to be constructive, have to answer the inevitable question they raise: How are we going to build power lines, aqueducts, and freeway corridors, if we don’t authorize the government to implement eminent domain to compel recalcitrant property owners to sell?

Principled opposition to eminent domain, and principled opposition to using public funds, makes sense if it the process is abused. Somewhere between an aqueduct that must exist to prevent millions of people from dying of thirst, and a clear abuse of power taking the form of acquiring and demolishing an established residential neighborhood to enable private, subsidized developers to come in and build high rises, a line is crossed. But the challenge should be finding that line, not condemning any form of eminent domain, or any publicly funded infrastructure.

Establishing adequate infrastructure to support urban civilization should rely on private interests when possible, although it is important to recognize that corruption and waste can also infect a private corporation. Instead of fighting public matching funds on principle, since these funds are necessary in order to make infrastructure investments financially viable for private civil engineering firms, why not fight the regulatory burdens, the environmentalist pressure groups, and the litigators, who are a big reason why these projects cost so much?

The biggest impediment to Californians achieving water abundance, along with energy abundance and abundant, affordable housing, are “environmentalist” pressure groups that purport to speak for everyone who cares about the environment. These groups have tied infrastructure development and housing development in California up in knots for decades. They should be getting no help from libertarian tax-fighting groups, but they are.

There are 40 million Californians now living in a state with public infrastructure sufficient for a state of 20 million people. They are living off assets that were constructed two generations ago, and attempts to expand or upgrade the conveyances that make urban life possible are met with blistering opposition from environmentalists, abetted by libertarian tax fighters. Resilience is gone from the system, and the only solution policymakers can offer is rationing of everything, monitored by big tech. That is the toxic byproduct of this ideological purity. The cure is worse than the disease.

What Californians have been living with for decades is coming to America.  It is accurate to say that most Republicans have been complicit in the rollout of endless new regulations and unsustainable public boondoggles. The solution, however, cannot simply be neglect. A policy agenda that walks away from public works because they violate libertarian principles must offer a viable alternative. Shane Hazel, as his political aspirations migrate from U.S. Senator to Governor of Georgia, is invited to present alternatives. Specificity is encouraged.

This article originally appeared on the website American Greatness.

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