“Everybody got a gri-gri.“ In their Bullshit episode on recycling, Penn and Teller call out recycling for what it is. When I first heard the economic arguments against recycling, I couldn’t find fault with the logic, yet it was extremely difficult to swallow. Recycling just seems so obviously good; to question it seems beyond the pale. But truth trumps feelings, and so I made the tough adjustment to my views on recycling. This gri-gri is so powerful that I still feel a twinge of guilt when I trash recyclables.
In retrospect, the argument that recycling actually wastes resources follows from very basic economics. In the profit and loss system of a market economy, if a firm is unprofitable (and there are no externalities), it means that the resources it uses have more valuable uses elsewhere. Other firms can use these resources to make products that consumers value more highly (they’re willing to pay a price that covers the cost of the resources). In other words, the outputs are less valuable than the inputs—resources have been wasted. These resources could be any inputs: natural resources, land, labor, etc.
Government recycling programs are instituted precisely because it is unprofitable to operate a recycling business (for the typical consumer recyclables: paper, plastic, glass, cans, etc. Industry profitably recycles all the time.) This could be a result of government providing free landfills, which disguises the real cost of trash. But in reality, the cost of landfills is relatively small compared to recycling, so even in a world of private landfills that charged for trash, it would still be unprofitable to recycle. Further, modern landfill technology makes externalities insignificant, so the costs are fully borne by the landfill operators. And landfills only take up an insignificant amount of space relative to the space available on Earth.
Thus, we can conclude that unprofitable government recycling does not save resources; it actually wastes resources! The costs of recycling (labor, truck fleet, processing plant, etc) exceed the value of the recycled materials. We would be better off putting our waste in landfills and using those resources elsewhere, where they can more effectively satisfy consumer wants. So don’t feel bad about using the trash, you’re the one who’s actually saving resources.
Further learning
- EconTalk podcast with Mike Munger on the economics and politics of recycling
- “Eight Great Myths of Recycling”
