All I Ever Needed To Know I Learned From Watching Prices

I just finished watching an episode of Penn & Teller’s Bullshit of which they debunk the myth that recycling is good for the planet. The reality is it takes more resources (time, energy and so on) to recycle trash than to simply throw it away and make stuff from scratch. I’m not sure if P&T realize it or not, but they offered two pieces of evidence that alone demonstrates this truth.

This first one is as follows: It costs $50-$60 a ton to throw garbage away in a landfill. It costs $150 a ton to recycle it.

Prices are determined by supply and demand. If an input has a high demand and/or a low supply (compared to alternatives), its price will be higher. But we don’t care about just one input (like energy costs or landfill space); we care about all of them. The price for a good captures all the scarcity of the inputs for that good. The higher the price, the scarcer the inputs as a whole are, and the more society looses when the good is produced. (This only works if inputs come from privately-held property, and for the purposes of the topic, this holds true.)

Note that if one input becomes scarcer, the overall price increases (all things held equal). If it becomes dangerously scarce, the price will increase a lot. Thus when environmentalists say we are incredibly low on landfill space, we know they are lying. If it were true, the price of throwing away garbage would skyrocket beyond recycling. It has never done that.

The second bit of evidence involves the other side of recycling: material creation (as opposed to disposal). It costs more to create resources from recycled inputs than from virgin inputs (except for aluminum cans).

Again, this difference in price tells us all that we need to know. The key distinction between recycled products and virgin products is the origin of the core material (such as trees versus paper to make paper). Since the other factors of price are so similar, comparing prices is the same as comparing the costs of each strategy to society as a whole. If one of these valued virgin inputs becomes dangerously scarce, the price will reveal that by becoming more expensive than recycling.

The main input for paper, for example, are trees (the vast majority of which are grown on private land just so they can be turned into paper). If trees were as scarce as environmentalists claim they are, then the price would be so high it would be cheaper to recycle newspaper. The same goes for just about anything else.

Aluminum, on the other hand, is comparatively more expensive to extract and manufacture, which is why recycling those cans isn’t only cheap, it nets a profit. It’s not a coincidence that this is the only aspect of the recycling phenomenon that didn’t need some of the eight billion dollars of subsides that recycling programs require every year to stay afloat.

Recycling isn’t profitable, thus it doesn’t add anything to the economy or to the environment.