The bottle of water: what does it mean to commodify a natural resource?
Once assumed to be unlimited in supply, water now has a greater scarcity value. Dr Georgios Patsiaouras at Leicester’s School of Management analyses the global commercialisation of water and questions the implications for consumers and the environment.
In 1776, Adam Smith introduced the ‘diamond-water paradox’. It stated that although water constitutes a basic element for survival and well-being, it holds a lower price in the market than diamonds, which have a greater scarcity value. The assumption that water resources were unlimited thrived amongst social scientists for centuries.
More recently, though, societies around the globe face a crisis in the management of water resources due to population increase, river pollution, climate change, inefficient/wasteful irrigation, and water mismanagement. The supply of fresh, clean water is now recognised to be finite. Efficient water supply is sure to emerge as an urgent 21st century resource issue. Will the scarcity of water increase its value?
In these contexts, the object of a bottle of water raises interesting questions. The bottled water industry has quadrupled in terms of sales and profits of up to $60 billion over the last twenty years. It seems that the bottled water industry symbolises the overindulgence and inequality of modern consumer societies, whilst almost one billion people have no access to clean water. On the other hand, while high profile, culturally significant and to a certain extent ‘transparent’, the total amount of water resources utilised by this consumer industry constitutes only a negligible part from the planet’s reservoir.
Despite the popular perception that water can be traded as a consumer good only via the form of the several bottled water brands, social scientists notice the diversity, range and complexity of several types of water ‘products’ promoted and sold in different marketplaces and contexts. For example, in the last decades the water industry has been transformed, in many economies, from a public to a private enterprise, including in the UK. Water has been promoted, advertised, sold, used, consumed and overall exchanged in several forms such as water rights, wells, springs, underground water reserves and bulk water transfer.
The most striking example on the commercialisation and transformation of water from a public good to private commodity can be found in the case of Chile, where free market mechanisms dominated the economic understanding of water supply and demand.
More generally, transportable bulk water resources render water a ‘fungible’ global commodity like oil or gas. Water rights turn rivers, lakes and sources of groundwater into exchangeable and marketable private property. Gigantic Jacuzzis and swimming pools, water parks and inconsiderate crop irrigation represent the conspicuous display, use and consumption of water resources.
The commodification of nature in general, and water in particular, calls for both social scientists and policy makers to elaborate on how the increased scarcity of water resources stimulates and instigates the unlimited growth of private water marketing systems in the context of environmental protection, natural resource depletion and consumers’ interests.
Dr Georgios Patsiaouras
- Consumer research and marketing theory
- Employment of innovative qualitative methods for consumer research
- Empirical and cross-cultural research on conspicuous consumption practices
- Contemporary and historical aspects of marketing and advertising theory
- The evolution of luxury brands and status symbols
- Sustainable consumption and macromarketing