But we have that problem as a capitalist society with or without “price gouging”. And we have a solution for that problem too – charities and the government giveaway or subsidize essentials for people who can’t afford them.

If we allow the price of water to rise when supply is constrained, people who can afford the higher prices will use water more conservatively and board less, and people will still give it away to those who can’t afford to buy it. But people won’t have to wait in line all day to get their ration of water, and there will be incentives to create temporary channels to improve the supply of water even if those channels couldn’t be supported by the normal price of water.