The Moral Case for Recycling Only When Directed To Do So by the Market

by Don Boudreaux on December 8, 2022

in Environment, Myths and Fallacies, Seen and Unseen

Here’s a follow-up letter to the student at Oregon State:

Mr. S__:

Thanks for your follow-up e-mail in response to my note on recycling. You write that I

put extreme faith in market prices. The market may fail to realize the true social value of recycling household plastic containers and cardboard. That’s why the moral case for recycling is of huge importance.

You’re correct that the market is never perfect. At any time, the market underprices some goods, services, and activities as it overprices others. Yet nearly all of these errors are profit opportunities. If the market really is underpricing, say, recycled household plastics, then you can earn a profit by paying households enough to entice them to set aside their plastic items for recycling – items that you’ll then collect and profitably transform into new outputs.

Now if you’re like me, you have no talent for earning profits in this way. But earth is home to eight billion other people. If recycling household plastics truly conserves resources – meaning, is profitable – it’s highly unlikely that not one of these billions of creative individuals will detect this fact and profitably act on it.

The larger point is that, while we can never know whether any particular prevailing price is ‘correct’ or ‘incorrect,’ in economies as open as is America’s the best – indeed, the only – concrete information we have about relative resource scarcities is the prevailing pattern of market prices. So while there’s a positive chance that today’s price for recycled household plastics is too low, there’s a far higher chance that this price is correct. It follows that if you spend time and effort recycling your household plastics, the probability that you are thereby wasting rather than conserving valuable resources is high.

This reality implies that what you call “the moral case for recycling” is a mirage. If the moral course of action is not to waste resources, then there’s nothing moral about making people feel guilty if they don’t recycle items for which there is no existing market (save that which might have been created artificially by political diktat).

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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