Tuesday, September 29, 2009

Recycling: What a Waste!

Mise.org article: http://www.mises.org/story/1911

Recycling: What a Waste!

by Jim Fedako
[Posted on Thursday, September 22, 2005] [Subscribe at
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This Fall, school kids across the country will again be taught a chief doctrine in the civic religion: recycle, not only because you fear the police but also because you love the planet. They come home well prepared to be the enforcers of the creed against parents who might inadvertently let a foil ball into the glass bin or overlook a plastic wrapper in the aluminum bin.

Oh, I used to believe in recycling, and I still believe in the other two Rs: reducing and reusing. But recycling? It's a waste of time, money, and ever scarce resources. What
John Tierney wrote in the New York Times nearly 10 years ago is still true: "Recycling may be the most wasteful activity in modern America."

Reduce and reuse makes sense. With no investment in resources I can place the plastic grocery bag in the bathroom garbage can and save a penny or so for some more pressing need. Reducing and reusing are free market activities that are an absolute profitable investment of time and labor.

Any astute entrepreneur will see the benefit of conserving factors of production. Houses are built today with much, much less wood than homes built just 20 years ago; and they are built sturdier, for the most part anyway. The decision to reduce wood in houses was not prompted by a green's love for trees; it was a reaction to the increasing cost for wood products.

Using less wood makes financial sense and any entrepreneur worth his profit will change his recipe to conserve wood through better design or by substituting less dear materials for wood products.

A recent Mises article,
Ethanol and the Calculation Issue, discussed the inability to calculate the true cost of producing Ethanol. No one can calculate the cost of all the factors of production in the direction from the highest order labor and land down to the lowest order. Ethanol at the pump, though the Chicago School, Keynesians, etc., would certainly give the calculation the old college try. Absent government supports, the cost of Ethanol at the pump reveals the true economic cost of producing that fuel.

The same applies to recycling. What is the true cost of all factors involved in the recycling activity? I haven't a clue. Though using Misesian logic I know that the costs of recycling exceed the benefits. This is the simple result of the observation that recycling doesn't return a financial profit.

I used to recycle. It paid. As a child living in the Pittsburgh area, I would clean used glass containers. After collecting a sufficient amount of glass, my father would drive the three or so miles to the local glass factory where the owner gladly exchanged cleaned waste glass for dollars. It this instance I was an entrepreneur investing factors of production in order to turn dirty waste glass into capital. The value of the exchange exceeded my preference for time, elbow grease, and my parents' soap, water, and auto fuel. (Of course all of my exchanges against my parents' resources were high on my preference list, but that's another issue altogether).

What's wrong with recycling? The answer is simple; it doesn't pay. And since it doesn't pay it is an inefficient use of the time, money, and scarce resources. That's right, as Mises would have argued: let prices be your guide. Prices are essential to evaluate actions ex post. If the accounting of a near past event reveals a financial loss, the activity was a waste of both the entrepreneur's and society's scarce resources.

I'm supposed to believe that I need to invest resources into cleaning and sorting all sorts of recyclable materials for no compensation. And this is considered economically efficient? In some local communities--many thousands of which have recycling progreams--residents have to pay extra so that a company will recycle their paper, plastic, and glass. The recycling bins come with a per-month fee.

In other areas, such as my township, the garbage company profits at the mercy of the political class. The trustees in my township specified that in order to win the waste removal contract, the winning company has to provide recycling bins. Further, they have to send a special truck around to empty those neatly packed bins and deliver them to companies that have no pressing need for these unraw materials. The recycling bins are ostensibly free, but in reality their cost is bundled into my monthly waste removal bill.

Since there is no market for recyclable materials, at least no market sufficient to at least return my investment in soap and water, not to mention time and labor, I conclude that there is no pressing need for recycling. If landfills were truly in short supply then the cost of dumping waste would quickly rise. I would then see the financial benefit to reducing my waste volume, and since the recycling bin does not count toward waste volume, the more in the recycling bin, the less in the increasingly expensive garbage cans. Prices drive entrepreneurial calculations and, hence, human action. Recycling is no different.

Come on now, there can't be any benefit to even the neoclassical society if you actually have to pay someone to remove recyclables.

That recycling doesn't pay signifies that resources devoted to recycling activities would be better utilized in other modes of production. Instead of wasting resources on recycling, it would be more prudent to invest that money so that new recipes could be created to better conserve scarce materials in the production process.

Human action guides resources toward the activities that meet the most pressing needs. This movement of resources means that those activities that don't meet pressing needs are relatively expensive. Why? Those activities have to bid for factors of production along with the profitable activities — activities that are meeting the most pressing needs. The profitable activities will drive the cost of those scarce factors upward leading to financial ruin for those activities that don't satisfy the most pressing needs. Forced recycling is such a failed activity.

The concept of lost materials is fraught with errors. Glass headed to the landfills will sit quietly awaiting someone to desire its value. The glass is not going anywhere, and should glass become as dear as gold or even something less dear, you can bet that entrepreneurs would begin mining landfills for all those junked glass bottles, not to mention plastic, aluminum, etc.

The only caveat to this train of thought is what Rothbard wrote about when he discussed psychic profit: the perceived benefit one gets from performing an action, even if that action leads to an economic loss.

Who reaps the real psychic reward from recycling? The statist do-gooder and the obsessed conservationist. Since recycling is now a statist goal, the do-gooders and greens force the cost of recycling on the unsuspecting masses by selling recycling as a pseudo-spiritual activity. In addition to these beneficiaries, there are those who have not considered the full costs of recycling, but their psychic benefit is more ephemeral than real. The other winners are the companies that do the collecting and process the materials, an industry that is sustained by mandates at the local level.

If recycling at a financial loss leads you to greater psychic profit, then recycle, recycle, recycle. Let your personal preferences guide your actions, but don't force your preference schedule on others who have a different preference rank for their own actions. And, do not delude yourself into thinking that you are economizing anything; you are simply increasing your psychic profit at the expense of a more rational investment. But, hey, your actions are your business; just don't force your preferences to be my business.

Oh, and don't tell my children half the recycling story. Remember Hazlitt and turn over the second and third stone before drawing an economic conclusion.

____________
Jim Fedako is a former professional cyclist who lives in Lewis Center, OH.
jfedako@aol.com. Comment on the blog.
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3 comments:

Paul said...

Interesting points. I can't say that my free-market leaning go to the same extreme as yours, but I do agree with the notion that if a 'thing,' be it a substance, product, or service, has market value, by definition someone will be willing to pay for it.

It seems there are some things which do seem to have value when recycled: a) the oil change places sell the old motor oil; b) something like 90% of all lead used comes from recycled materials, much of it car batteries; c) criminals steal copper for the scrap value; d) there is more gold in a ton of scrap electronic circuit boards than in a ton of gold ore.

But to your point, some of those recycled materials back in back into the cycle via free labor.

As you say, that would seem to suggest that they don't yet have enough value to create an income motivation to recycle.

But I think that means that for there to be an income motivation to recycle, the other sources of the material have to become more expensive, and that suggests exhausting the natural resources - at least those in a form easy to extract.

So I would hope there is a motivation on the part of people living now to preserve whenever possible those natural resources for future generations. I'd hate for the legacy of our generation to be that 'we used it all up.'

This is where I'm sure we part ways - I believe there is a role for a benevolent government to influence public behavior away from selfish motivations to one that is for the greater good of society. For example, I think it is reasonable to conclude that filling the landfills with stuff that could be recycled is not a good thing for the long term, but that because the 'long-term' may be many generations, those of us living now will fail to appreciate the harm we're doing, and simply need to be told to recycle stuff.

Even if all recycling does is reduce coal consumption, I'm for it. There are mountains of my home state of WV are quickly being ground down on a massive scale by mining companies who now have at their disposal equipment of a scale that they can extract coal simply by starting at the top of the mountain, and grinding them down until they reach a coal seam.

No matter what these guys say about their 'reclamation' programs, when they're done, the mountain is gone.

It really can't always be about money and economics. It's about recognizing that this spaceship we ride on is precious and rare, and it needs to last a good while longer. Competition is good thing at some level. But thinking globally, and across time, we need to think more like one family figuring out how to prosper for generations to come.

Jim Fedako said...

Paul,

And your solution is?

In other words, what entity solves your issue -- just trying to see who quickly you assert government as the solution.

Paul said...

My initial comment said that I believe there is a role for a benevolent government in such matters.

We can observe that throughout the ages it has been demostrated that mankind will readily choose what is good/easy/cheap in the short term with little if any regard for sustainability.

Native American cultures are romanticized for their supposed love of the land. Yet you can go to a place in the Dakotas where the Lakotas repeatedly stampeded whole herds of buffalo off a cliff because it was the most efficient way to kill large numbers of them. The only difference between this act, and grinding a mountain down for the coal is the size and sophistication of the technology available - the motivation is the same.

The rights afforded a landowner cannot be infinite. After all, the landowner has title to property only because the government says he does, and the power of the government can be engaged to enforce those rights granted under law.

We could choose to have a lawless county, where one must individually protect land rights, presumably by force if necessary. There are places in the world where this is true today, like Somalia. If someone wants to take over your house in Mogadishu, there is no government to complain to - you have to fight to keep it, or walk away.

And so I don't really understand those who argue against government, yet demand the protections that if affords.

I certainly fear a government that ceases to be responsive to the people, and our American government is becoming less and less so every hour.

And I am concerned that the way we find our way back to minimal government isn't by unwinding the scale of the government we have now, but rather a revolution that breaks out as a result of our government becoming intolerably intrusive.

Sadly, I see nothing in the natural world that suggests that natural systems self-regulate very well. There is always something gradually drifting out of whack, and the ultimate 'correction' is abrupt and severe.