Archaeology interprets past cultures and economies by studying material remains and environmental data. Long associated with analyses of classical civilizations such as Greek and Roman, it is also applicable to more modern times. For example, in 2001 the University of Arizona Press published Rubbish: The Archaeology of Garbage, an analysis of contemporary America’s disposal culture.

The Gallatin Valley has a great deal of archaeological evidence of past and recent irrigation practices. If alert, one can easily find abandoned headgates, flumes, and lateral ditches, all remnants of old flood irrigation systems. They reveal our history if we’re aware and curious.

First, we live in an arid region. West of the 100th meridian, rainfall drops below 20 inches per year. This means that supplemental water is required for bountiful and predictable yields of grains, potatoes, hay, and garden crops.

Hence, when free, the demand for water far exceeds its supply. The 1955 study by MSU rural sociologist Carl Kraenzel, The Great Plains in Transition, notes, “[T}he amount of available water for irrigation has afforded only a very limited development.”

Water here is a scarce resource with steadily increasing value. While agricultural commodity prices are hitting new highs, the recreational-residential value of water, especially for fly-fishing and waterside home lots, has also increased dramatically. Bozeman’s Yellow Pages testify to this with dozens of ads for fly-fishing shops, fishery habitat consultants, and water sports.

Water rights here go with the land. When one buys a farm or ranch, water value is capitalized into land prices. Land without irrigation is far less expensive than farms with plentiful water. Clearly, water is valuable.

Since the natural supply of water is beyond our control, the challenge is to better allocate and manage this scarce resource. This becomes confusing because water in our rural West is not sold as a commodity, but rather allocated by the doctrine of prior appropriation. This means “first in time, first in right”—and many farms and ranches have several water rights.

For example, our place has 100 miners’ inches of 1866 “old” or “private” water (about 1125 gallons per minute or 227,400 cubic feet in 24 hours), plus an 1883 interest in the Klienschmidt Canal. We also have some “new” water with inferior, less senior rights.

Because water and rights to water are not sold through normal markets, non-consumptive uses involving fish, wildlife, and recreation are poorly represented; we have not developed institutions that register their value. Thus, from a social perspective, waste and poor allocations are common; water sometimes doesn’t flow to its highest value. In late summer with low flows and temperatures approaching 70 degrees Fahrenheit, the highest value of irrigation water may be keeping it in the Gallatin rather than pumping it on hay or grazing ground.

The single best environmental policy is to have prices equal costs. Prices are what purchasers pay. Costs are the opportunities foregone when purchases are made. All too often they diverge, most notably, when environmental costs are ignored or discounted due to flawed institutional arrangements.

Fortunately, although irrigators don’t pay for water used, as energy and labor costs rise, they face incentives to conserve. The old system of flood irrigation uses little or no energy, but it requires relatively skilled labor—and it only works down slope. Further, irrigating by flood uses far more water than sprinkling.

Due to market forces, the long wheel lines, still common here, are gradually being replaced by center pivots. As their name implies, center pivots rotate around a center point. While their initial cost is about five times that of the wheel lines they replace, once erected, they require very little labor and are computer controlled.

Pivots apply water far more efficiently than wheel lines and, as low-pressure systems, require one-third the energy. Sometimes, we harness gravity and capture four-tenths of a pound of pressure per foot of fall. Irrigation is then off the grid, just as in the old days of flood irrigation.

The archeological record of irrigation in the Gallatin Valley provides an important lesson. It offers solid evidence of how individuals respond to changes in relative prices, even when the water they use does not itself carry a price.