Water supply low in driest place on Earth; free market blamed

From a NY Times article:

Quillagua is among many small towns that are being swallowed up in the country’s intensifying water wars. Nowhere is the system for buying and selling water more permissive than here in Chile, experts say, where water rights are private property, not a public resource, and can be traded like commodities with little government oversight or safeguards for the environment.

Private ownership is so concentrated in some areas that a single electricity company from Spain, Endesa, has bought up 80 percent of the water rights in a huge region in the south, causing an uproar. In the north, agricultural producers are competing with mining companies to siphon off rivers and tap scarce water supplies, leaving towns like this one bone dry and withering.

In the same article, it is stated that Quillagua was in the Guinness World Records as the "driest place" for 37 years. Also from the article:

But the debate is largely academic, because without suitable water to raise crops, many residents saw no reason to continue resisting outside offers to buy the water rights in their town. One mining company, Soquimich, or S.Q.M., ended up buying about 75 percent of the rights in Quillagua. Most residents moved away; those who remain average around 50 years old.

Might it be that this 'withering' is a feature, not a flaw? These residents voluntarily sold water rights to the companies which presumably sell the water to other places in Chile for higher prices. Isn't this what we'd expect from a market? It sounds like a futile, wasteful undertaking to try to bring water to the driest place in the world.

Consider other analagous situations and what the headline might be if Alexei Barrionuevo had written the article:

- A company goes out of business. "Acme, Inc withers in free market"

- Domestic textile industry suffers from foreign competition due to free trade. A company town dwindles as people leave. "Spartanburg,SC withers in free market"

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