Mises Wire

The Seen and the Unseen of "Waste"

Mises Wire Jim Fedako

Our goats love this time of year. The neighboring fields have been harvested, but not completely. Around the border and in odd spots throughout the field that adjoins our property are fugitives from the combine — soybean plants laden with browned, dried pods. We tug the goats toward the gate separating pasture from field, and then, once they realize their passage is safe, they tug us to their awaiting meal.

And while they glean, I glean.

Recently, I had a Facebook discussion with someone lamenting food waste. He recited some statistic that claimed that somewhere around 50 percent of food (a term he was unable to adequately define) was wasted, with waste having a moral implication. I challenged him to clarify his use of waste, noting the soybeans our neighbor sowed but never reaped. Were those wasted?

The man who farms the field believes they were not. Certainly soybeans remain to be gathered. However, the cost to harvest every single bean is prohibitive, and wasteful itself. He runs his combine while accounting for its operating and labor costs, and clears the field with relative efficiency, sending (he hopes) that last marginal bean onto an awaiting truck. Since he knows he will not collect all of the beans, he has no issue with our goats feasting on the leftovers.

My Facebook opponent wanted the farmer to harvest the field clean. He saw only a broken window, so to speak, with no consideration for the unseen costs. Yet those costs are real. Where my opponent sees a farmer acting wastefully, I see an acting individual seeking to maximize his profits. And, in doing so, the farmer is providing a more efficient use of the scarce resources at his disposal — something we should all want.

In fact, waste is the byproduct of using resources to produce a good that is valued less than those resources.1

Moreover, value can be found in places other than just the physical items "wasted" after a transaction. For example,  my Facebook debate also included arguments about whether it is wasteful to cook a meal that is larger than the collective stomachs of the guests. In my view, that is simply being polite, and any food leaving via garbage cans was as much part of the presentation as heat, lights, candles, etc., all creating a welcoming atmosphere. It is an efficient use of my resources — and psychically profitable. My opponent (ever the central planner) wanted me to calculate the actual food needed to satisfy all, and prepare no more. Nonsense, and impossible. But this is a topic for another article.

Are "Idle" Resources Wasteful?

What about the trucks that drive across the field to empty the bean-crammed combine? The quick and simple observation of farm trucking in my area may, at first glance, raise another broken window fallacy.

Not far from my house, amid other large fields, is a complex with silos and garages. In the parking lot sit glistening grain trailers attached to sparkling semis. The trucks and trailers remain idle for most of the year, not sitting as rusting hulks, but as shiny investments. Sure, they occasionally run the roads to ship grain from silo to places unknown. However, they mostly sit. And they sit awaiting the next harvest, when they have great value as a good of higher order — value that justifies their idleness the rest of the year.

In contrast are the rusted trucks of the small construction companies in my area, which are either running the roads continually or being welded and repaired in doorless garages. These are also productive investments, and valued goods of higher order.

Both trucking companies are relatively efficient, though their business models differ. I assume many will see shiny, well-maintained, yet idle trucks and think, waste. However, one look at the trucks, buildings, silos, etc., shows a company that can afford to reinvest in its capital. A profitable company, so, therefore, one that is using its scarce resource to satisfy consumer wants.

I cannot say the same about government. When I see township parking lots with idle trucks, mountains of road salt and sand, etc., I cannot claim resources are being used efficiently. I can, though, correctly state the opposite. Why? The lack of a need for profits always leads to inefficient solutions to scarcity. However, my Facebook foe assumes government is moral and just, and that thus its use of resources is always socially efficient — wishful and mistaken thinking.

What can we learn by gleaning the fields?

First: Idle trucks and fugitive soybeans are not in themselves indicators of waste.

Second: Free market companies work to utilize scarce resources to create the greatest benefit for their consumers. It is true that, in the future, an improved combine could completely glean the fields, leaving nothing for my goats. However, that machine does not now exist.

Third: If waste is has a moral implication, then unseen costs must be considered from a moral perspective as well. Using fuel is wasteful if its value exceeds the value of the beans reaped. So the immoral act in this instance is a complete harvest.

Fourth: Trucks can sit idle for nine months and still be efficient. They do not need to run the roads, newly welded, in order to provide a profitable return on investment.

Fifth: If acting individuals are seeking to satisfy consumers, they will direct resources to the appropriate means and become more efficient, something governments can never do.

As long as the weather remains relatively warm, I will lead my goats to their gleaning field and ponder the market while they crunch both bean and stalk.

  • 1One could argue that the farmer is being wasteful when he plants too close to the border of his field, but the sowing is similar to the reaping. Planting farther from the edge will leave areas of the field unplanted. The farmer calculates the cost of sowing against the benefits of reaping and he plants in accordance with the most efficient (least wasteful) outcome.
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