Before the 1850s, American law treated running water as essentially a public good for the benefit of all landowners along a water course. The idea of privatizing a stream—of diverting it and selling the water for a profit—was unheard of. That situation changed during the California gold rush, when water was transported and sold to miners far from rivers. The courts, in turn, developed the doctrine of “first possession,” giving a property right in running water to the first claimant—the rule used to this day in Western states.
Kanazawa’s book is about the evolution of first possession and other rules governing water as property. It also integrates two different approaches to the study of legal change—that of law and economics and that of history. He likens the relationship of these disciplines to the Indian parable of the blind men who each touch one part of an elephant only to find...