Capitalism has found an untapped market—speculating on water. For the first time in history, bankers and bosses will be able to bet on future water prices on Wall Street.
The CME Group is launching a futures market linked to California’s $1.1 billion water market.
This invites a frenzy of financial speculation. Bankers and bosses, who have no interest in the actual commodity, buy and sell futures contracts and gamble on the price of a scarce commodity.
And the move shows capitalism has no solution to water scarcity, climate crisis or environmental degradation.
A water futures market was first floated as wildfires and droughts gripped California during the summer. One of California’s biggest users of water—and drivers of droughts—is big agribusiness.
A huge chunk relies on very profitable, and destructive, methods of almond farming. Yet rather than promoting a shift to sustainable agriculture, the capitalist answer to water scarcity is gambling based on its scarcity.
This is no accident—it flows from capitalism’s drive to maximise profits. Capitalist competition means bosses are locked into a never-ending battle to accumulate more. Everything is subsumed to the system’s logic.
This logic destroys the planet and creates scarcity and socially-useless financial markets.
In a socialist society based on planning to meet human need, water would be a shared resource.