ABSTRACT:The solution of a water resource allocation problem by an alternative social arrangement is presented. Classical Austrian economic theory and the “new resources economics” provide both theoretical and practical evidence to support the development of well‐defined, private property rights to the water resource in question. A conflict analysis demonstrates that management of the Manayunk Canal by a firm would reconcile existing confrontations through compromise use of the water resource. Benefit and cost calculations show that a compromise among industrial and recreational interests, currently competing in the political arena, would increase social ben
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