IF THE Victorian Government is the main tenant in La La Land, then the Productivity Commission's latest report, Towards Urban Water Reform: A Discussion Paper must be the rent book. Its drift is plain. There is no problem with water supply that a competitive market couldn't fix. "Ultimately, it is possible to envisage an evolution to a fully decentralised urban water market involving many retailers and wholesalers offering different forms of product (for example price and security). However, an important caveat is that such arrangements do not operate elsewhere in the world." This is reminiscent of the old joke about the dream-world economic rationalists inhabit. Three shipwreck survivors are washed up on a desert island with nothing to eat except a can of beans. A chemist in the group suggests putting the can in the ocean until it erodes. A physicist suggests breaking the can on a rock. Finally, an economist tells the other two they don't understand the nature of the problem. The first step, he says, is to assume they have a can-opener. The commission's report, written in the environmental and resource economics branch, concludes after more than 100 pages: "In theory, competition in water supply ultimately could deliver efficient market prices without the complexity attached to administered pricing