This is an exciting story. Recycling finally seems to have moved into the mainstream of American society. Everywhere you go--in offices, in schools, in all kinds of public places--it is almost impossible to avoid seeing a recycling container for cans and paper products. Many communities require their residents to separate their trash into paper, plastic, and glass. Some even go further, mandating that glass refuse be separated into brown, green, and clear glass. People proudly boast that they take the time to recycle. And what parent hasn't felt a touch of pride at seeing one of their children fish a tossed can out of the garbage pail and then say, "Daddy, we can't throw these cans away with the other trash. We need to recycle this to help save our planet." Everywhere, dedicated men and women, sparked by idealism and a desire to leave this world a little better than how they found it, work to save our precious resources. And yet...

Our first indication that all is not right comes with the recognition that recycling is often a money-losing proposition. IT EARNS NEGATIVE PROFITS. Somewhere in that statement is a story about how recycling affects society's happiness. Let's consider the two components of the profit equation. First is revenues. Despite the hoopla about the precious resources being saved, in reality recycled products generally sell at a relatively low price. Consider the following statement by the recycling coordinator of New York University (quoted later in the same article), "The revenue from recycling doesn't offset any of the costs of recycling, because right now the market price for materials is at an all-time low." Hmmm. Prices are low. What does that tell us? It can only mean one thing. Society is not getting much happiness from the recycled goods it produces as a result of all this effort.

Okay. But think of all the resources we're saving. We are saving resources, aren't we? This statement is a half truth. We are saving some resources. But in the course of doing that, we're also using up other resources. It takes resources to save resources. It takes labor to collect and sort the telephone books, newspapers, Pepsi cans, plastic milk cartons, and brown glass, green glass, and clear glass that are recycled. Labor is a resource. It takes machines to transform discarded newspapers into a pulpy mush that can be reprocessed into usable paper products. Machines are a resource. It take energy to operate those machines. Energy is a resource. Each of these resources has alternative uses. They could be used to produce happiness elsewhere in the economy. When we tie up these resources in order to make recycled products, we deny consumers in our economy the other goods and services that they could have received from these resources.

Seen from the perspective of our unifying field theory, recycling is just another resource transfer. There are gains and losses. The trick is to compare the size of the gains against the size of the losses. But that is exactly what profits do for us. If recycling loses money, it means that the resources used to generate recycled goods would produce more happiness if they were used for something else. In other words, recycling takes resources away from higher valued uses and directs them to lower valued uses. Is it possible to state this a little more clearly? How about the following statement: RECYCLING CAUSES THE DESTRUCTION OF RESOURCES THAT ARE MORE VALUABLE THAN THE RESOURCES RECYCLING SAVES.

If the resources that were being saved were really valuable, one would expect recycled products to sell for more. For example, suppose trees were becoming scarce. Then the price of trees, and hence the price of paper, would be high. Faced with high prices for paper products, consumers would be willing to spend a lot of money for substitute, recycled paper products. But paper isn't expensive, it's cheap. (In fact the reason there is so much waste paper is precisely because paper is cheap. If it were expensive, people wouldn't "waste" it.) And because paper is cheap, consumers aren't willing to pay very much for recycled paper products. That is, consumers don't value additional paper products--recycled or otherwise--precisely because trees are not scarce. Trees are abundant. As a result, trees are not a particularly valuable resource, at least when compared to other, less plentiful resources. Thus recycling paper to save trees doesn't make a lot of sense, unless you get a kick out of cluttering up your garage with newspapers to haul down to the recycling site.

How about the landfill argument: "Recycling is good because it keeps trash from piling up in landfills." This argument is based on the premise that landfill space is scarce. Let's see...how would we know whether landfill space is scarce? That would make the price of landfill high. (If we're starting to sound a little repetitive, all we can say is that's the beauty of our "unifying field theory" of economics. The same argument works for everything.) If the price of landfill was high, then businesses, universities, cities and towns would all have to pay a lot of money for the right to deposit their trash on somebody's land. In that case nobody would have to force them to recycle. They would do it voluntarily because it was in their own financial interest to do so.

And that really is the point of this discussion on recycling. We're not saying that recycling is inherently bad. All we're saying is that if recycling were good--that is, if it would increase society's happiness--then self-interested firms and consumers would choose to recycle voluntarily. Not because it was good for Mother Earth, but because it was in their own interests to do so. In fact, for commodities such as aluminum and steel, recycling has been the norm for a long time, without any encouragement from government. In these cases, recycling is good for society. But oftentimes universities, communities, and private firms recycle because they think they're helping society, even though they're losing money doing it. When this happens, we conclude that recycling wastes more valuable resources than it saves, and ends up lowering society's happiness.