From: konstan@elmer-fudd.cs.berkeley.edu (Joe Konstan)
Newsgroups: misc.consumers
Subject: Re: Carburetors, gasoline and why I don't recycle
Date: 5 Sep 1992 20:06:51 GMT
Organization: Picasso Research Group, UCB Computer Science Division
Distribution: world
NNTP-Posting-Host: elmer-fudd.cs.berkeley.edu

In article <1992Sep4.182859.9720@mwhhlaw.uucp>, jim@mwhhlaw 
(James P. Cavanaugh III) posts an economic defense for why recycling 
is wasteful:

|> 	1.  Everything is scarce.  That is, there is not enough of  
|> anything in all creation to employ it for all possible uses.

Agreed in general.  Some things are, however, artificially scarce due
to monopolization or government regulation.  By artificially scarce I mean
that under normal free market forces, under competition, a larger quantity
of the good would be available at a lower price.  

For example, automobile manufacturing labor is artificially scarce due to 
actions by UAW.  Produce is artificially scarce due to actions of the 
department of agruiculture acting on behalf of growers associations.

|> 	2.  Everything being scarce, there is a need to allocate all  
|> recources to the most efficient use.  I sense no serious disagreement  
|> so far.

Agreed.

|> 	3.  Is it better to allocate things based upon the prejudices  
|> and theories of a few people or get input from everyone?  My vote is  
|> for the latter.  (The former did not do so well in Eastern Europe over  
|> the last 40 years or so).

Agreed, in theory.  This is still not optimal unless you consider the 
inputs of "future generations."  This can be done by giving special emphasis
to their concerns or by attempting to minimize use of non-renewable resources
using renewable ones instead.  There is no perfect way to accomplish this, but
unless we attempt to, the result of your approach will be unfair to future
generations.

One common way of handling this is to have a government reponsible for 
imposing fees to match "externalities of consumption" (i.e., the 
indirect costs and benefits of doing things).  A sane economic model would 
charge someone for polluting a river (making it worse for others and the
future) and would pay someone for using (or making) recycled products (making
it better for others and the future).

|> 	4.  This allocation system is called: THE PRICE SYSTEM.  This  
|> elegantly simple system considers what EVERYONE will or will not pay  
|> for EVERYTHING.  The higher the price, the more value to the most  
|> people, relative to the scarcity of the resource.  The system  
|> automatically channels resources to the most efficient uses.  It also  
|> channels resources away from their least efficient uses.  All that is  
|> necessary is that people act in their own self interest.

Every Econ 1 student knows that the price system doesn't work for public 
goods.  Under the price system there are likely to be no schools, parks, 
libraries, or even national defense.  The price system even fails on 
non-public goods when some players in the market are big enough to have
a great impact.  If there is only one supplier of water, then people 
will pay anything the supplier demands.  This is true even if competition
would yield a low price and many suppliers.  It doesn't matter whether the
monopoly is based on wealth (and the ability to run anyone else out of
business), regulation and politics (bribes), or anything else.

|> 	5.  Rule:  The least costly alternative, all things considered,  
|> is the most effecient.  The most costly is the least efficient.

Only if the costs represent something meaningful.

|> 	6.  If civilization wanted recycled newspapers and plastic  
|> bottles, I would be able to sell them for some price.  As it is, I  
|> cannot just give them away.  I must either pay someone to come and get  
|> them or I must consume other resources to take them where wome kind  
|> soul will releive me of them.

Again, the problem is that new production receives tax subsidies (when it 
should be paying extra taxes) and that recycling isn't properly subsidized
to reflect the the true benefit not only to us but to future generations.  
This is a problem because goverment is accountable to today's voters, not
to tomorrow's.

I agree that it is absurd that collecting recyclables is uneconomical.  Heck,
I think that in the long run it should be economical to collect all garbage
and sort through it to pull out recyclables.  But current subsidies and 
regulations are not based on real economics.

|> 	7.  Landfilling is, at present, much less costly to me and most  
|> other people.

Only less costly because you don't pay the true price.

|> 	8.  Result: Landfilling is a more efficient use of ALL  
|> resources (as opposed to one or two isolated resources) than is  
|> recycling.
|> 	A recent article in the Wall Street Journal told us that the  
|> USA is awash in landfill space.  So much so, in fact, that the cost of  
|> landfilling is actually going down across the country.
|> 	For those hard core environmentalists who are convinced that  
|> all landfilling is bad, I would suggest that they target an end to  
|> socialized trash collection and waste disposal.  To the extent that  
|> consumers must pay for what they dispose of, the market works.  To the  
|> extent that subsidized municipal trash collection artificially reduces  
|> the cost to consumers (prompting more consumption of landfill space  
|> than would naturally occour at market prices), then it artificially  
|> increases our use of landfilling at the expense of other methods of  
|> waste disposal.
|> 	Once again, governmental intervention into the market is  
|> ignored as the cause of the problem (if there is a problem).

Exactly.  But this is the reason that your arguments are wrong.  I completely
agree that a purely self-interested person, acting based on the incentives
of the market and the current government, would not recycle (except deposit
cans and bottles in some states).  For many people, 10 cents a can isn't
even enough compensation for the time it takes.  However, this doesn't mean
that recycling is bad.

There is also no self-interested reason for charity except perhaps the hope
that you create a better society for yourself and descendents.  Economically,
recycling today is a form of charity.  You can decide for yourself which, if
any, charities you wish to support with money or labor, but I think you'll
find that certain forms of recycling are very efficient in terms of the
amount of good done per unit of effort.

Joe Konstan
konstan@cs.berkeley.edu
Xref: sparky misc.consumers:16367 sci.med:17107 sci.med.physics:380