The focus on this page is about the water scarcity problem due to drought in Tampa Bay region and how the Swiftmud and Tampa Bay Water could allocate the available resource to the public both economically as well as empathetically. Authors Robert L. Beekman and Brian T. Kench, have used Friedrich Hayek’s ideas to construct a rational economic order. Friedrich has stressed on few points in his book “The Use of Knowledge in Society”, on how to solve the economic problems and how to make the best possible decisions with the given information, which we will see in this paper.
The economist Friedrich Hayek has explained in his papers on how to find an economic order with a few considerations and assumptions. According to him, there is a solution to all economic problems if we possess all the relevant information, if we can start from a given system of preference and if we had the complete knowledge of available means. From his view the mathematical equations, which is used to solve the problem gives the best emphatic solution but does not solve the economic problem of the society. This is because the economic calculus never gets the data from the macro level but from a single mind. And this in return will help us on how to allocate the given resources but not how to secure the best of the resources.
One of the major points that Friedrich talks about in his paper is knowledge transfer and how the inefficiency in the transfer could hurt the economy in a long term. The “planning” is the word he prefers for the decisions to solve the problem and he debates on which level the panning should be to avoid the data misinterpretation. He thinks there is no blind answer of whether to follow a centralized or decentralized decision making because that is influenced by factors like the place, time, and size of the product. All his solutions are based on how good the knowledge on the situation is, and is it first hand information or not.
He talks about the origin of economic problems and it always arise as a consequence of change. Friedrich also talks about how inefficient managers could ruin the pricing strategy, which will directly affect the business as a whole. Also managers who are able to adapt to the changes are the ones who solves the problem, which keeps the business alive on a longer run. He highlights on how the whole system adapts to a common pricing which an individual who knows the relevant facts and knowledge of that product initially set.

The article on the Tampa Bay Times by authors Beekam and Kench gives a solution for the water scarce problem that Tampa Bay area had due to an unexpected drought in this area. The Southwest Florida Water Management District, or Swiftmud had to come up with a solution to meet the requirements of the daily usage by the public and the Swiftmud’s decision of limiting the water supply was not appreciated by the public and that’s when the economic professors came up with the tiered pricing strategy. Through this way the lower level of the society are not greatly affected as their usage is below 3,740 gallons of water and the users get to decide between higher prices or less usage. This also gave the users to consider switching to water efficient taps and showerheads in order to keep their lawns lushly.
This solution was found not to affect the wealthy users, as the price hike would just be a small increase in their monthly bills. Authors also suggested that the money from the upper-tiered water users could be used to repair the water reservoir.
The main connection between Friedrich’s theory and the author’s solution is “how to economically use the available recourses”. Beekman and Kench have suggested the tiered system, which gives the users to decide on how to utilize the available resource. Basically Friedrich’s idea was to create an emphatic solution which is economical as well and that is what the economic professors have suggested to the Swiftmud.
Personally I liked the tiered system that they used to address the problem but it would have been even more efficient if there were a tiered system with an upper slab for the high users so they don’t use up all the resources just because they could spend for it.