PEOPLE RESPOND TO INCENTIVES. It's not gentlemanly to pick on Molly Ivins, but there's too much economic illiteracy in her recent column called "Perils of Capitalism? Think Water Distribution." Let's start here: "Gasp! Gosh, how awful! I happened to see that piece, and indeed it was pretty much about the perils of capitalism in relation to the distribution of water. The perils are here, now, and affect every human being on the planet. The situation in Cochabamba, Bolivia, where the American firm Bechtel bought the public water utility and then doubled prices, led to a general strike and transportation stoppage, mass arrests, violence and several deaths. You don't have to assume that a corporation like Enron Corp. might get into the water business: Enron was in the water business."

Gasp! Gosh! People do indeed get unhappy if their free cookies are taken away, but they get even more unhappy if their cookies run out, free or not. And the reference to Enron is a non sequitur.

"In the United States, foreign corporations, mostly French, are grabbing up water rights as fast as they can. The major U.S. players include Bechtel, T. Boone Pickens of Texas and Monsanto. All or part of the water delivery systems in Atlanta; Chattanooga, Tenn.; Houston; Jacksonville; Jersey City; Lexington, Ky.; Peoria and San Francisco have already been privatized. The International Monetary Fund and the World Bank are both actively promoting privatization.

"The reason Cochabamba got into trouble in the first place was because the World Bank refused to guarantee a $25 million loan to refinance the water system unless the local government sold its public water utility to the private sector."

More non sequiturs.There was a problem in Cochabamba, wasn't there? The water utility screwed up, did it? You have read the story about the Pernambuco Tramway, haven't you, Moll?

Ready for the next non sequitur? "The situation is deadly serious, and serious journalists have been paying attention to it for years. Anyone who has ever covered the American West knows about the tangle of water claims and water rights that becomes worse every year, as the scarcity of water increases." Tangle of water rights, eh? How much of that a consequence of treaties, subsidies, Roosevelt-era authorities, and other non-market institutions. Make the case that the convoluted institutional arrangements allocate resources more efficiently than markets will, and I will be happy to read it. In particular, make that case in light of the following recitation of the superiority of those non-market institutions: "The West is about to suck the great Ogallala Aquifer dry. Barlow and Clarke report, "A legacy of factory farming, flood irrigation, the construction of massive dams, toxic dumping, wetlands and forest destruction, and urban and industrial pollution has damaged the Earth's surface water so badly that we are now mining the underground water reserves far faster than nature can replace them."

"There are solutions--including drip rather than flood irrigation--but what is needed is swift international action. Only 5 percent of the water supply is now in corporate hands, but this administration, along with the IMF and World Bank, is pushing for privatization." Molly, if you're drawing a parallel to the king who awarded the prize to the second singer after hearing the first singer, say so: otherwise convince me that the 95 percent non-private system is functioning effectively. Be sure to spell out your standard of effectiveness.

"The perils of capitalism are staring us in the face. I'd just as soon not have the water supply subject to them, thank you." That doesn't quite do it, thank you.