Market ideology often obscures public choices about rea­ sonable and beneficial uses of water. Current debates in California water policy reflect the tug of war between the potential efficiency and flexibility of water transfers (often called ·water marketing") and the desire for a stable and re­ liable California water system. The water industry's para­ mount concern remains the protection of the reliability and stability of operations of its complex socio-technical sys­ tems for delivering water, particularly at a time when envi­ ronmental concerns over instream uses of water are increas­ ing. Loosening restrictions on water transfers while protecting appropriative rights is a flexible approach to meeting long-term water demand. But given such market imperfections as oligopoly and redistributive land rents, state regulation of transfers of California's most political natural resource-for example, through a drought water bank-remains likely in the future.

Next time you pass through the city of Oroville in Northern California on State H ighway 70, take a detour through town and go up to the Oroville Dam. Take the road that follows the channel of the Feather River, winding through hills clothed in manzanita, madrone, and oak. You will soon round a bend to the impressive sight of the world's tallest earthen dam at 770 feet. Swing up past the dam to the visitor center's museum. Against one wall, amid the wildlife taxidermy and Gold Rush artifacts, is a white graphic outline of the state of Cali­ fornia. Throughitsmidsectionathickbluearrowslashesfromnorthto south. It is simply captioned: "The Plan."