by Art Carden
“I wonder if they make disposable towels.”
A few flicks of the thumb later, I had discovered that yes, in fact, they do make disposable towels and secured a box of 300 of them to be delivered to my house. My relief is tangible: I joined a gym about a year ago, and one of the inconveniences of my gym membership is that I regularly have to shower and change at the gym. Some gyms provide you with towels. My gym–Planet Fitness–doesn’t.
This means I spend a lot of time carrying around soggy towels and wet washcloths. Keeping them separate from my dry clothes is a minor annoyance, but having them stink up the car if I happen to forget they’re in there and wondering whether I have a clean towel or not is just another distraction in an already-crowded morning.
Hence, disposable towels or a fantastic addition to my quality of life. This is true of all sorts of disposables: disposable cups, disposable plates, disposable silverware, and when my kids were younger, disposable diapers. Disposables are a great source of convenience and better sanitation.
They also free up my time and energy for other things, like writing. The world is better off, presumably, to the tune of the additional articles I am able to write and lectures I’m able to prepare because I’m not spending as much time fussing with towels and dishes. Markets direct resources for their highest valued uses, and for skilled workers in places like the United States, their highest value activities are not washing dishes and doing laundry. Sure, we do some of this because it can be costly to outsource–you can eat at restaurants often, but it’s not that easy to find someone at 7 PM who is willing to do your dishes for a few dollars–but the less of it we can do, the better.
There is an important lesson here in wise stewardship. If you’re reading this, your time, energy, and focus are your most valuable assets. On net, you’re probably not doing the good you could do if you concentrated your time and attention on the tasks for which you have a lower opportunity cost. You create income for others by focusing on the tasks for which you have a comparative advantage and outsourcing to them the tasks for which you don’t. If you’re an engineer, then unless you really enjoy it, you probably shouldn’t mow your lawn. A better contribution to the world would be to do more engineering and pay someone else to mow your grass. On net, you and your trading partners end up with more engineering and better-kept grass. Disposables save you time and energy you would otherwise spend doing dishes and laundry, and on net the world is better off because of the additional engineering you’re able to do.
If you’ve gotten this far, you might be wondering about the environmental costs. Surely, it’s extremely wasteful to dispose of cups and towels after a single use. Perhaps, but if this is the case, it might be because the prices are wrong. Garbage service might be too cheap. Landfill space might be too cheap. Lots of products emerge out of a dizzying array of subsidies, taxes, restrictions, inducements, and other rules that distort the price. In a competitive market with well specified property rights, all of the relevant information is reflected in the price. Finally, one can think of a landfill as an “inventory” of sorts in the same way we might think of mines as inventories. Most of what’s in there isn’t going anywhere anytime soon, and who knows? Maybe the engineers who are able to do more work because they can hire lawn services will come up with cheap and effective ways to recycle all this stuff.
This means that our best estimations of the downstream environmental costs will be reflected in the prices of disposable towels and disposable cups. To the extent that there is an environmental problem with disposables, it’s because we’re not letting the price mechanism do its job, which is to ensure that people enjoy the benefits and bear the costs of their actions without imposing them on others.
Exchange and labor-saving convenience innovations like disposables free up time and energy we would otherwise spend on relatively low-value activities and enable us to direct this time and energy toward high-value activities. Don’t feel bad about making the most of them. After all, they enable you to make an even bigger contribution to the wealth and well-being of others.
Art Carden is Associate Professor of Economics at Samford University’s Brock School of Business, and he is by his own admission as Koched up as they come: he has an award named for Charles G. Koch in his office, he does a lot of work for and is affiliated with an array of Koch-related organizations, and he has applied for and received money from the Charles Koch Foundation to host on-campus events.
READER COMMENTS
Matthias Goergens
Aug 24 2017 at 1:16pm
Interesting analysis. In reality you have to take signalling into account, too.
Jesse
Aug 24 2017 at 2:18pm
This is all true at an aggregate level — certainly engineers shouldn’t be required to mow their own lawns (nor should lawn mowers be required to do their own engineering). But it often feels wrong at the individual level, at least on the margin, because the marginal hour spent mowing the lawn ends up comes out of leisure, not work.
In a world of convexity and no friction, the MU of leisure is equal to the (net) MU of labor, and so it doesn’t matter whether the lawn-mowing hour comes “from” labor time or leisure time.
But that is not the world we live in. Hence, we end up with some low-value leisure hours at various odd times, and you might as well mow the lawn (or wash the dishes, or sweep the floor …) instead of watch another hour of TV. You also feel less like a lazy bum.
Micke
Aug 24 2017 at 4:35pm
I’m not sure I understand this part: “This means that our best estimations of the downstream environmental costs will be reflected in the prices of disposable towels and disposable cups.”
The price of many goods vary between jurisdictions because of various taxes, surcharges and fees. Some of these are moivated by environmental concerns, others by other reasons. If a disposable towel costs 20% more in Germany than in France, is it reasonable to assume that this is because the environmental cost is 20% higher in Germany?
It’s not inconceivable that there are quite a few consumer goods sold in the US that have prices that do not in fact reflect their environmental costs. I understand that thinking that prices reflect costs including externalities help us sleep better at night. But that hardly makes it true.
Tom DeMeo
Aug 24 2017 at 5:42pm
@Micke
You don’t understand this part because it doesn’t make any sense.
Mr. Carden references a concept of property rights that doesn’t exist in the real world with respect to land use in well populated areas, and for good reasons. I don’t have a right use my property to dispose of waste for others. Exercising such a right would destroy my neighbors property value.
Perhaps Mr. Carden believes that private contracts and arrangements could replace public land use regulation, but the result would still leave us with an equilibrium that is complex and inefficient, and get us no closer to accurately pricing externalities into the price of his disposable towels.
What ends up happening is that democratic institutions simply assign costs. Sometimes they make sense and sometimes they don’t.
Thomas Sewell
Aug 24 2017 at 8:10pm
Sadly, Art is bringing logic and evidence to a religious debate.
Next someone’ll try to counter the idea we need to recycle glass by suggesting the world probably isn’t going to run out of sand any time soon.
Most people don’t realize where true recycling and conservation takes place, because it isn’t in conjunction with a government program or a school’s environmental propaganda.
Most meaningful recycling takes place when you purchase a used house, or a previously-owned car, or buy or sell something at a pawn shop, etc… The idea that “recycling” solely consists of people sorting their trash before the waste management company puts it all in the same landfill is one of those mass hallucinations only a unified education system can impose.
But to the original point, if recycling as typically understood was worth the time/effort/resources, then people would do it voluntarily in exchange for getting paid for the products they are recycling. That’s how it works for the vast majority of products which it actually makes sense to recycle. This process is informed by the price being offered/paid because that reflects the inputs and demands.
Micke
Aug 25 2017 at 1:44am
@Thomas Sewell:
I have to point out that you fell into the trap head first, even though an unbiased observer could see how glaringly obvious it was.
Please reread my post and note that I do not say, or even imply, that prices are too low. I just note that they are different in different places. This could equally be because they are right in one place and too high somewhere else, or too high in one place and way, way too high somewhere else.
But with your ideological bias, you completely missed that. Time for a good look in the mirror?
bill
Aug 25 2017 at 10:28am
I like this post. I wish we’d get a strong carbon tax in place.
Adding to Jesse’s point, I personally get enjoyment from doing some things around the house. An hour or so of chores is good for my soul.
Tom DeMeo
Aug 25 2017 at 12:34pm
@Thomas Sewell
I would point out that the rub here isn’t the cost of creating another new bottle, or a towel. The raw materials are virtually limitless. The question is whether the the cost of disposing the bottle or towel is accurate and is borne by the right parties.
Mr. Carden asserts that the market will price this appropriately if proper property rights are well specified. I do not believe that is a reasonable argument because his definition of such rights rarely works with land use in the real world.
I don’t think recycling as it is practiced makes sense either. But using disposable towels does mean disposing costs, and “the market” cannot price disposal accurately. It is a social decision to assign these costs, and that is sloppy and easy to criticize, but its all we have, and it is necessary.
Daisy Alexandrovna
Aug 25 2017 at 3:54pm
No one’s opposed to use of disposables where the social and environmental costs are imposed on the people who buy, sell and throw away the items. Yes, property rights over every inch of the earth combined with nuisance law would result in pretty accurate pricing of disposables, but you’re fooling yourself if you think that’s moral justification for using disposable everything when we don’t have such a system in place.
Tom DeMeo
Aug 25 2017 at 4:14pm
@Daisy Alexandrovna
“Yes, property rights over every inch of the earth combined with nuisance law would result in pretty accurate pricing of disposables…”
I really don’t see how that would work at all. I’m not sure what you mean by nuisance law, but it sounds like some magical variable you are throwing in to make an unsolvable problem solvable. There is no way that bilateral negotiations between parties will ever clear these issues
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