Nobody wants to recycle. One of the simplest solutions available for any of the environmental problems we face today is recycling. For some reason separating the family trash into paper, plastic and various metals just hasn’t yet caught on. Despite all the seemingly obvious aesthetic and environmental benefits, relatively few people take the trouble.
According to The Economist, this widespread lack of recycling “is the moral expression of a market failure.” Aside from the question of whether throwing words like “moral” around in such a context is relevant, I ask, has the market really failed?
It should be obvious to gather that to have a “market failure” there needs to be a market. Was it the market in municipal trash collection that failed? Certainly no one is implying that local, government-granted monopolies constitute a market. The “market” then, must be in the recycling centers themselves. Nope, they’re government-granted monopolies too. Where, then is the market that has failed?
The trouble with the “market failure” hypothesis is that no market has ever been allowed. If anything can be said to have failed, it is the attempts of local and state governments to force people to recycle (or to make them pay for it through subsidies), without taking any significant consideration of what incentives currently and could potentially exist to encourage recycling.
A report in the Economist found that — compared with the energy expenditures that are required to make certain products from scratch — recycling paper, plastic and aluminum saves 40 percent, 70 percent and 95 percent, respectively. Even though granting that energy does not represent all costs associated with the manufacturing of a product, we can safely assume that recycling is a more productive use of these resources than burying them in a landfill. Greater productivity and efficiency translate into money savings. Yet people persist in throwing this valuable resource in the garbage — and paying the city to have it removed!
Who would expect that in a choice between two alternatives, people would consistently choose the one that was worse? The reason must be that recycling is not economically better for individual consumers than throwing something away.
When the opportunity exists to take advantage of available resources in a profitable manner, individuals and corporations will create a market for the product. The only force that effectively stops this tendency is government intervention, which sets artificial barriers to entry into the marketplace, thus creating monopolies.
Because of the monopoly pricing structure, you pay the same regardless of how much or how little you throw away. And if you decide to recycle this month you still pay the same as if you didn’t recycle at all. Where is the incentive to recycle? In a free market, this valuable resource would not be wasted.
Private companies would perhaps even compete to buy recyclable materials from consumers to take advantage of available profit margins, and research and development to improve recycling methods would be encouraged by the quest for profits.
Some people are willing to do what they can to clean up the environment despite the trade-offs associated with the government-controlled waste management system. But for the majority who need a little more incentive, a free marketplace — not more government coercion — is the only mechanism that can work.
Would we be better off with a free marketplace economy E-mail Nash at [email protected].