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Recycling: What a Waste!

Tags The EnvironmentMedia and CultureMonetary Theory

09/22/2005Jim Fedako

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 drop 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 R's: reducing and reusing. However, recycling is 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."

Reducing and reusing make 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 profitable investments of time and labor.

Any astute entrepreneur will see the benefit of conserving factors of production. Today, builders construct houses using less wood than similar houses built just 20 years ago. In addition, these houses are built sturdier; for the most part anyway.

The Green's love for trees did not reduce the amount of wood used in construction; the reduction was simply 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, noted 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. Certainly the Chicago School, Keynesians, etc., will give the calculation the old college try, to no avail of course. Absent government supports, the price of Ethanol at the pump reveals the most accurate economic cost of producing that fuel.

The same applies to recycling. What is the true cost of all the factors involved in the recycling process? I do not have a clue. Though using Misesian logic, I know that the cost of recycling exceed its benefit. This is the simple result of the observation that recycling does not return a financial profit.

I used to recycle; it paid. As a child living in the Pittsburgh area, I would collect and 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. In 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, hard work, 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 is another issue altogether). In this activity, I was not recycling in the standard use of the term. I was producing factors of production — cleaned glass — for a profit.

So, what is wrong with recycling? The answer is simple; it does not pay. In addition, since it does not pay, it is an inefficient use of the time, money, and scarce resources. 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.

That said, I am supposed to believe that I need to invest resources into cleaning and sorting all sorts of recyclable materials for no compensation; an activity that many considered economically efficient. In addition, in some local communities, residents have to pay extra so that a waste company will recycle their paper, plastic, and glass as 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 had to provide recycling bins. Further, they have to send special trucks around to empty those neatly packed bins and deliver the bins' contents 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 price sufficient to return my investment in soap and water, not to mention time and labor, I conclude that there is no pressing need for recycling.

Ok, but what about the lack of landfills nationwide? 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 cannot be any benefit to even the neoclassical society if you actually have to pay someone to remove recyclables.

Since recycling does not turn a profit, it is more efficient to utilize the scarce resources devoted to recycling activities in other modes of production. Instead of wasting resources on recycling, it would be more prudent to invest that money so that entrepreneurs can create new recipes to 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 do not 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 do not satisfy the most pressing needs. Forced recycling is such a failed activity.

The concept of diminishing recyclable resources 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 slightly less dear, you can bet that entrepreneurs will begin mining landfills for all those junked glass bottles.

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

If recycling at a financial loss leads you to greater psychic profit, then recycle, recycle, recycle. Let your personal preferences guide your actions, but do not 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 use government to force your preferences on my lifestyle.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 sustained by mandates at the local level.

Oh, and do not tell my children half the recycling story. Remember Hazlitt and turn over the second and third stones before drawing an economic conclusion.



Jim Fedako

Jim Fedako, a business analyst and homeschooling father of seven, lives in the wilds of suburban Columbus. Send him mail.

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