Friday, August 26, 2005

Recycling

I wanted to share a few of my thoughts on a posting from Daniel Schwartz’s blog in which he discusses recycling. The post in question begins:
“While I do not know enough about economics in general or the economics ofwaste disposal in particular to have staked out a firm and final position with regard to recycling (other than that, properly, the government ought not to have a role in it) ….”
Now, I think the bracketed portion of that opening sentence is the key to the topic, and if it were truly understood and implemented within society, nothing more would need be said. For, in my opinion, the whole concept of recycling only has any meaning as a governmentally or socially ordained activity (proceeding from environmentalist/statist premises). In fact, in a free society one wouldn’t distinguish recycling from other kinds of for-profit exchanges. That is, just as today when you re-sell your car or your house, you don’t think of it as “recycling”, so too in a free market you wouldn’t distinguish returning bottles or newsprint for credit from other types of trade – provided that these actions were taken because it was in your own economic interest, not because the government or society was compelling or haranguing you in to doing so.

In other words, in a truly free society the issue of recycling would disappear because deciding whether it is best to re-use an item represents just another allocation of resources that the free market routinely (and silently) takes care of in its normal course.

So, just as when you buy a jug of milk, it’s not necessary for you to consider whether the farmer is using each square foot of his farm most efficiently in feeding and raising the cows, nor whether the route that the dairy collection truck uses to pick up the milk follows the shortest path, nor whether the refrigeration is at the most efficient temperature to minimize spoilage yet not waste energy, nor whether your local store is using the minimum amount of advertising necessary to make you aware that they have the product and that it’s reasonably priced, nor to the millions of other similar issues and decisions that go into that simple purchase of milk – so too you wouldn’t have to be concerned that potentially re-usable items aren’t being re-used if it is economical to do so. Just as milk suppliers, in whose economic interest it lies to ensure that milk is produced at the lowest cost possible, attend to all the myriad of details involved in its manufacture and trade; so too would all those producers who could cut costs by re-using a good ensure that – where it was economically advantageous to do so – the good would be re-used.

Only because environmentalists and statists have so muddied the waters do we sometimes forget that these types of issues are precisely those that a free market takes care of on its own, without the need for us to address them in any explicit form.

Or to put it another way: the beauty of a free market is that – just as you don’t have to have a “position” on all the issues involved in producing and exchanging milk – so too you don’t have to have a “position” on recycling, much less a “firm and final” one.

So in a proper society, I think the concept of recycling is a useless one. But since we do not (yet) live in such a society, it may be worthwhile to spend a few minutes examining the term as it is used today.

As popularly employed, particularly with regard to individuals, the term “recycling” is not simply synonymous with “re-use” (as mentioned above, typically one does not count re-selling a house or a car as instances of “recycling”). Rather, I submit that the true defining characteristic of “recycling” is that it involves re-use of goods which an actor wouldn’t pursue if he were driven exclusively by his own profit motive (including accounting for his own time and energy). In other words, only when an individual acts to have an item re-used due to government compulsion or moral suasion by environmentalists is he said to be engaged in recycling. (In this analysis, I count laws which fine you if you don’t participate or ones which levy recycling deposits among instances of government compulsion, as are government subsidies given to producers for the purpose of encouraging them to use recycled goods).

Understood this way, recycling always results in men acting in contradiction to how they would act if left un-coerced, and for this reason recycling is universally wasteful and harmful – both to the individual and to society. But because the term is so poorly defined and so emotionally-charged, I think the best solution is not to argue about whether recycling per se is good or bad, but rather to take the discussion to the level of the free market and its workings, after which, as I’ve shown above, the whole issue of recycling disappears.

Now, as a final comment on the subject, I think that for anyone who understands the principles required to achieve a proper society and government – including most notably that the government’s role must be restricted to the exercise of retaliatory force – there is no reason to spend time championing anything less than full-fledged laissez faire capitalism with its complete separation of economy and state.

However, for those readers not yet persuaded of these over-arching political principles, yet who still wish to use resources in the best way possible; or for those who want to take some incremental steps on the way to full privatization of the economy; to them I would say: Forget about any mandated recycling programs – as shown above, as well as in the article to which Daniel links – these are always wasteful. Instead, do everything you can to externalize societal costs and to have users pay directly for goods and services, as this will ensure that consumer choices are reflected accurately in the market. Such is the logic behind education tax credits and school vouchers, and similar programs would go a long way towards rationalizing transportation and other government-controlled activities. (For example, if everyone paid for road usage directly, say per mile traveled, instead of paying for it indirectly through taxes whether or not they use the roads; one might find that trains become more economic relative to trucking, and that mass transit suddenly gains much wider appeal.)

Of course, in the end no political or economic system can stand and persevere without a solid philosophical underpinning, so it is to those issues that I hope to return in future postings.

7 Comments:

Anonymous Daniel said...

Interesting post. Note that my main concern in my original post to my blog was the question: Should I, as an individual living in today's society, recycle? I think I agree that in a laissez-faire economy this question would be a non-issue.

8:31 PM  
Blogger Amit Ghate said...

Hi Daniel and thanks for your comment.

Perhaps I could have been clearer, but my thought is that even in today’s mixed economy, there’s no reason to consider recycling as a whole, nor to have an opinion on it as a separate and distinct category of action. I think you should weigh and evaluate each potential act of recycling just as you would any other economic decision, i.e. according to whether it is to your benefit or not. There is no point forming a principle “I should always recycle” or “I should never recycle” since there is nothing peculiar to recycling which makes it universally good or universally bad. For example, in most cases, you probably should resell your cars and houses rather than throwing them away, while on the other hand, if you have to travel 50 miles to return bottle caps to a recycling center, you’re probably better off not to recycle them and simply throw them away.

So as I see it, the only principles you need are those which you already have viz. if a given exchange or action is worthwhile to you, you should pursue it, if not you shouldn’t. Whether or not the action or exchange is subsumed under the term “recycling” won’t help you make the decision, so I maintain that there is no point or validity to having a global “position” on recycling, even in today’s society.

3:39 PM  
Anonymous Anonymous said...

Is the purpose of any behavior such that it is always to be done if it is in one's own self-interest? I assume you're model allows for voluntary association, thus an association that wanted to recycle consummables would be able to. However, is there ever a greater concern for which government has a purpose as the 'super-self' to decide--there is too much of the nation's land being diverted to land-fill and it is preventing the need for farmland. The individual isn't going to be able to see this as he throws away his plastic bottles. I can see something of a counter weight to the government deciding this, i. e. less farms means less food, higher priced food, etc., but is that efficient in a nation as large and diverse as ours.

As a side question, do you think that farming would be economical without farm subsidies? i e would the prices be too high for mass consumption or too low for farmers to engender a profit? Are large farms more economical than small?

10:33 AM  
Anonymous Anonymous said...

Is the purpose of any behavior such that it is always to be done if it is in one's own self-interest? I assume you're model allows for voluntary association, thus an association that wanted to recycle consummables would be able to. However, is there ever a greater concern for which government has a purpose as the 'super-self' to decide--there is too much of the nation's land being diverted to land-fill and it is preventing the need for farmland. The individual isn't going to be able to see this as he throws away his plastic bottles. I can see something of a counter weight to the government deciding this, i. e. less farms means less food, higher priced food, etc., but is that efficient in a nation as large and diverse as ours.

As a side question, do you think that farming would be economical without farm subsidies? i e would the prices be too high for mass consumption or too low for farmers to engender a profit? Are large farms more economical than small?

10:34 AM  
Anonymous Ergo said...

Very interesting and persuasive article. I have a question about your final example. I'm sure the kinks can be worked out and a system can be designed that can be most advantageous to the private owner. But charging for roads by the mile (or whatever other standard distance) could simply be a hassle, say, if all you wanted to do was get into your car to run to the grocery store a couple miles away. Making it more expensive to drive around in your personal cars is very inconvenient and can eat away at precious time spent in waiting for buses, trains, or scheduled car pools.

What do you think?

3:13 AM  
Blogger Doug Reich said...

It should be noted that in a fully capitalist society, one in which all property were privately owned, disposing of trash would entail shifting your garbage to someone else's property and would thus entail a cost probably by the pound. So, unlike today, where that cost is socialized or hidden since it is typically a municipal function, the market would impose a cost on throwing things away, and then, as Amit so eloquently points out, each individual could decide if the value of his garbage were worth more to dispose or re-use. Of course, if roads were private too, as they should be, there would be a further cost calculation to consider as travelling would not be free either.

2:29 PM  
Blogger Amit Ghate said...

Thanks Doug, I agree completely. (It's part of what I was getting at in urging people to "externalize societal costs".)

7:38 PM  

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