Big Is Valuable—Is Small Un-Valuable or In-Valuable?

It will be recalled that riparian-use zones are relatively small. Herein may lie several of the problems just referred to. First, economic models assume that valuation is applied to small units—a gallon of water, a bushel of wheat, a fishing day—that each unit of each product is valued separately. In this way, economists can demonstrate that the value of individual units of water applied to grow a crop, breed a fish, or support a water skier may increase for initial gallons used, but will progressively decrease as successive gallons are added. This principle of declining marginal value would suggest that where available water is in decline in the riparian-use zone, the water left for riparian uses would be increasingly productive—increased economic value for these remaining gallons or cubic feet per second would become evident—and progressive decline of the riparian water supply would stop due to this economic feedback loop.

This is what the economic model predicts, but such a reversal is not evident. One possible explanation of this "failure" of the market system is that the destruction of riparian systems in California is subsidized. In earlier times, it was reasoned that with markets still undeveloped, financial assistance was needed to transport water to arid areas to render soil productive and to support new populations and new crops. Today, subsidies continue. In consequence, the gap between value returns from subsidized large terrestrial zones and smaller riparian-use zones, which must demonstrate value unaided, has been large—and is only now beginning to close.

Second, while economic calculus operates in small incremental units, political calculus seems to operate in the largest available aggregates. Rhetoric about the risk to "$3 billion of crops" if "sufficient" water is not provided seems to largely obliterate questions of economic efficiency—and the riparian-use zone, with its relatively small area and limited number of residents, farmers, fishermen, and recreationists, finds itself with diminished political influence. As was noted earlier, there is also no guarantee that any given individual found in a riparian-use zone will feel particular allegiance to it.

Finally, the broad advance of technology has proceeded well beyond a scale appropriate to the riparian-use zone. Dialogue concerning this advance is well established in California—and poses two generalizable problems. First, while technology^[4] is still able to increase its scale, the riparian-use zone does not seem well suited to assimilate the latest "big break-throughs" in the production of crops (via large-scale farming practice), fish (via hatcheries), or recreation (via people-intensive park experience). Of course, there is little assurance that such increases in scale will continue. The impacts of large-scale agriculture on employment and lifestyle, and on progressive deterioration of soil and water quality are at present being debated—as is vulnerability to variability in markets, seasons, and climatic conditions. Hatcheries, while a potential source of mitigation, are mistrusted by many fishery biologists—and there is no assurance that they will provide an effective replacement for natural stream habitat. Concerns over quality of experience and rising transportation costs now limit both the decision and the capability of recreationists to concentrate beyond immediate urban areas. But even if these concerns become realities, heavy investments at large scale have taken place—and the predictable response of most will be to plunge ahead, knowing "you're damned if you do, but it's too expensive to change."

These expenses, dealing with changing the momentum of larger scale, are termed frictional costs by economists. They are among the most serious challenges presently facing the riparian-use zone and will demand the fullest inventiveness of planners if they are to be dealt with.