Wednesday, December 23, 2009

Conserving conserves nothing

A recent post of mine over on the Blog at Mises.org:







Conserving conserves nothing
Jim Fedako



Plastic-Bag-Bin.gif

Maybe it was the holiday spirit. Or maybe it was the impatient line of holiday shoppers anxiously waiting for me to finish paying the cashier. Regardless, I let an economic fallacy slide without comment.

As the cashier was totaling my bill, she asked if she could pack some of my goods in the plastic bag I was holding; a plastic bag that previously held an item I had returned upon entering the store.

"Certainly," I replied.

She then noted with a smile, "Great. I'll reduce your bill by a quarter. You are saving the environment, you know."

I'm certain my sweater could feel the hair on my neck rise. "Saving the environment?" I thought. But before I could respond, and begin a lesson in economics, the holiday spirit, or line of holiday shoppers growing and waiting, kept me quiet.

In a slower time of the year, I would have noted that I would soon spend the quarter she left in my wallet on an after-dinner mint at a local restaurant. You know what I'm talking about; one of those small, foil-wrapped chocolate mints conveniently placed at the cash register.

My reuse of a plastic bag at the store allowed me to purchase a conglomeration of chocolate, sugar, fat, and foil. So, in the end, was the environment really "saved?"

Were my actions the same as those envisioned by the cashier? Did she really mean for me to consume different resources - something other than plastic? Is that really the end sought by those in the environmentalist movement?

Conserving conserves nothing is an outrageous claim, but it is true nonetheless. Oh, sure, by reducing my consumption, I am conserving certain scarce resources - that is the seen. However, as Hazlett and Bastiat showed years ago, the seen never tells the whole story. And, many times, the story it does tell is simply not true.

To get to the truth of my claim, we have to scratch beyond the surface. So, let us begin our Hazlettian and Bastiatian journey from the seen toward the unseen, and a better understanding of the economics of conservation.

First, we must define conservation. [1] As commonly used today, conservation refers to actions that reduce the use of certain resources for the purpose of protecting the environment. So, in this view, I conserve when, for the sake of protecting the environment, I travel by bicycle instead of by car. It then follows that I am not conserving when I choose to ride my bike as a benefit in itself. For my actions to be considered conserving, I have to be acting with the environment in mind. Or so the current definition goes.

I can reduce my consumption of a certain resource in order to satisfy a number of ends. For example: I can reduce out of a belief that, by doing so, I am protecting the environment; I can reduce due to a change in my valuation or preferences; I can reduce in order to save for future use; or, I can reduce as a result of government interventions.

In all cases, the result is the same: nothing is conserved. [2]

Let's analyze the result of my supposed conservation effort at the store? As noted above, if I simply redirect my quarter to another purchase, I am not conserving the environment, so to speak. While it is true that I am reducing my use of certain resources, it is also true that my new purchase results in the increased use of other resources. The unseen negates the seen.

What if I had flipped the quarter into the trash can on the way out of the store? Or dropped it in a piggybank at home? In either case, the market would have read my action as a change in preference for money over other goods. The value of money would change ever so slightly and the resources that I left unused would be purchased by some other producer or consumer. My abstention would result in their consumption - and nothing would have been conserved (or, more correctly, some resources might be conserved, but at the expense of others).

What if government had taxed that quarter away? Well, the same applies as above. Government could have spent its ill-gotten gain on monuments to itself, using scarce resources in the process. Or it ccould have destroyed the quarter, and the value of money would have changed in the market. Again, nothing would be conserved.

So there is nothing about the reuse of the plastic bag and the reward of a quarter which causes a reduction in the use of scarce resources -- in the aggregate, of course. And this holds every time I reduce my consumption of some good. I either consume some other good or change my preference for money. But nothing gets conserved.

Are there other ways to reduce consumption of a scarce resource? Absolutely. If folks in the environmentalist movement want to conserve (say) oil, they can purchase oil fields with all of those quarters returned at the checkout line. And they can leave the oil in the ground for as long as they own the land.

Certainly, by doing so, they will conserve oil. Nevertheless, they must also recognize that oil left in the ground will likely be offset by an increased use of other resources, with nothing being conserved in the end.

You may think, "That's a sad tale. If there is no way to conserve, then we have no future."

Such an argument is pure question begging. What makes conservation - as currently defined - a necessary means to a future? And what is that future, anyway?

There is hope. A truly free market would efficiently and effectively utilize scarce resources - conserve - through time. A free market and requisite property rights are the solution. They are our only hope, our only means to a brighter future.

I suggest that environmentalists redirect their efforts from so-called conservation to efforts that strengthen property rights and build freer markets. By doing so, they will be able to rest more easily knowing that the market will conserve resources efficiently and effectively. And then their means will be the same as our means, all leading to an end desired by most of us: a better world for ourselves and our children.

Note:

1. I am only looking at conservation as used by environmentalists - the three R's of recycle, reduce, and reuse. I am not considering conservation as defined by conservationists -- protecting certain plants, species, and habitats. Of course, strong property rights can protect those as well.

2. It is true that under full-blown socialism, with vast numbers of starving men, women and children lying down in the fields awaiting a quick dust to dust ending, fewer resources would be used - conservation would occur. However, with the exception of all but a few of the most-ardent environmentalists, no one desires such a dystopian world.

3 comments:

Anonymous said...

Your statements are correct if you are the only one conserving. What you forgo would be consumed by someone else. However, if more conserve in the same way and enough conserve then those resource would not be consumed and conservation would take place.

For example, reusable shopping bags have become popular. If you use your reusable bag enough, the resources used to make the bag offset the resources used to make the plastic/paper bags not being used. After this point, you are conserving. If enough people use reusable bags, at some point they tip the balance and less plastic/paper bags are used thus a true conservation is achieved.

Conservation does work if achieved at a level large enough to impact the overall market. It starts one person at a time and grows from there.

Jim Fedako said...

10:38 --

"If you use your reusable bag enough, the resources used to make the bag offset the resources used to make the plastic/paper bags not being used."

You are missing the point. What becomes of the money saved by not producing plastic bags?

"Conservation does work if achieved at a level large enough to impact the overall market."

That is a question begging argument. How large is large enough?

Read the footnote. When the market decreases in size, marginal employees is out of luck. What becomes of them? A very sad fate, indeed.

Anonymous said...

They make reusable bags or they move on to other industries. What happened to wheelwrights when the horse and buggy became obsolete?

To answer your first question, we could save the money we no longer spend on plastic bags. Grocery stores would show an increase in profit by no longer buying bags. Notice they charge for reusable (.99) which offsets what they used to include in your groceries.

But you are right, we have obsoleted an industry while propping up another.