Maybe it was the holiday spirit. Or maybe it was the impatient line of holiday shoppers anxiously waiting for me to finish paying the cashier. Regardless, I let an economic fallacy slide without comment.
As the cashier was totaling my bill, she asked if she could pack some of my goods in the plastic bag I was holding; a plastic bag that previously held an item I had returned upon entering the store.
“Certainly,” I replied.
She then noted with a smile, “Great. I’ll reduce your bill by a quarter. You are saving the environment, you know.”
I’m certain my sweater could feel the hair on my neck rise. “Saving the environment?” I thought. But before I could respond, and begin a lesson in economics, the holiday spirit, or the line of holiday shoppers growing and waiting, kept me quiet. In a slower time of the year, I would have noted that I would soon spend the quarter she left in my wallet on an after-dinner mint at a local restaurant. You know what I’m talking about; one of those small, foil-wrapped chocolate mints conveniently placed at the cash register.
My reuse of a plastic bag at the store allowed me to purchase a conglomeration of chocolate, sugar, fat, and foil. So, in the end, was the environment really “saved?”
Were my actions the same as those envisioned by the cashier? Did she really mean for me to consume different resources – something other than plastic? Is that really the end sought by those in the environmentalist movement?
Conserving conserves nothing is an outrageous claim, but it is true nonetheless. Oh, sure, by reducing my consumption, I am conserving certain scarce resources – that is the seen. However, as Hazlett and Bastiat showed years ago, the seen never tells the whole story. And, many times, the story it does tell is simply not true.
To get to the truth of my claim, we have to scratch beyond the surface. So, let us begin our Hazlettian and Bastiatian journey from the seen toward the unseen, and a better understanding of the economics of conservation.
First, we must define conservation. [1] As commonly used today, conservation refers to actions that reduce the use of certain resources for the purpose of protecting the environment. So, in this view, I conserve when, for the sake of protecting the environment, I travel by bicycle instead of by car. It then follows that I am not conserving when I choose to ride my bike as a benefit in itself. For my actions to be considered conserving, I have to be acting with the environment in mind. Or so the current definition goes.
I can reduce my consumption of a certain resource in order to satisfy a number of ends. For example: I can reduce out of a belief that, by doing so, I am protecting the environment; I can reduce due to a change in my valuation or preferences; I can reduce in order to save for future use; or, I can reduce as a result of government interventions.
In all cases, the result is the same: nothing is conserved. [2]
Let’s analyze the result of my supposed conservation effort at the store? As noted above, if I simply redirect my quarter to another purchase, I am not conserving the environment, so to speak. While it is true that I am reducing my use of certain resources, it is also true that my new purchase results in the increased use of other resources. The unseen negates the seen.
What if I had flipped the quarter into the trash can on the way out of the store? Or dropped it in a piggybank at home? In either case, the market would have read my action as a change in preference for money over other goods. The value of money would change ever so slightly and the resources that I left unused would be purchased by some other consumer or producer. My abstention would result in their consumption – and nothing would have been conserved (or, more correctly, some resources might be conserved, but at the expense of others).
What if government had taxed that quarter away? Well, the same applies as above. Government could have spent its ill-gotten gain on monuments to itself, using scarce resources in the process. Or it could have destroyed the quarter, and the value of money would have changed in the market. Again, nothing would be conserved.
So there is nothing about the reuse of the plastic bag and the reward of a quarter which causes a reduction in the use of scarce resources — in the aggregate, of course. And this holds every time I reduce my consumption of some good. I either consume some other good or change my preference for money. But nothing gets conserved.
Are there other ways to reduce consumption of a scarce resource? Absolutely. If folks in the environmentalist movement want to conserve (say) oil, they can purchase oil fields with all of those quarters returned at the checkout line. And they can leave the oil in the ground for as long as they own the land.
Certainly, by doing so, they will conserve oil. Nevertheless, they must also recognize that oil left in the ground will likely be offset by an increased use of other resources, with nothing being conserved in the end.
You may think, “That’s a sad tale. If there is no way to conserve, then we have no future.”
Such an argument is pure question begging. What makes conservation – as currently defined – a necessary means to a future? And what is that future, anyway?
There is hope. A truly free market would efficiently and effectively utilize scarce resources – conserve – through time. A free market and requisite property rights are the solution. They are our only hope, our only means to a brighter future.
I suggest that those who care about the environment redirect their efforts from so-called conservation to efforts that strengthen property rights and build freer markets. By doing so, they will be able to rest more easily knowing that the market will conserve resources efficiently and effectively. And then their means will be the same as our means, all leading to an end desired by most of us: a better world for ourselves and our children.
Note:
1. I am only looking at conservation as used by environmentalists – the three R’s of recycle, reduce, and reuse. I am not considering conservation as defined by conservationists — protecting certain plants, species, and habitats. Of course, strong property rights can protect those as well.
2. It is true that under full-blown socialism, with vast numbers of starving men, women and children lying down in the fields awaiting a quick dust to dust ending, fewer resources would be used – conservation would occur. However, with the exception of all but a few of the most-ardent environmentalists, no one desires such a dystopian world.
{ 20 comments }
While I agree with the premise of this article on conservation, I don’t think the example presented helps to promote, but rather undermine it, setting the stage for verbal warfare by creating an off-topic debate. This can be seen as a deliberate attempt to avoid the initial topic while discrediting it.
If I were one of these type of people who would rather argue than think (I like to think I’m a recovering do-gooder), I’d note that your lesson contains elements of “the seen” and “the unseen” itself, with the seen being the quarter, and the unseen the bag not used.
Then I would point out your sophistry in going on and on about the quarter while ignoring the unseen bag which you chose not to consume. Then, if I really wanted to dig-in, I’d remove the quarter from the argument, as it is an unnecessary distraction to the idea of conserving a bag.
At this point your argument becomes null, as the initial point was the checker noting your conservation of a bag, yet your focus was only on the quarter, which was merely a reward for the act of conserving.
Please realize I’m full agreement with your argument about how the quarter undermines the initial conservation in a Bastiatian sense. However this does not negate the fact that you did not consume another bag, which is supposedly the crux of this discussion, and most certainly what any environmentalist would latch onto.
So, this article either needs to be refocused on the idiocy of rewarding conservation with a method that promotes further consumption, or it needs to show how not using a bag is not really conservation. It is a mix of ideas in its present state, making it simple to refute (or promote, depending upon which idea is more important to you).
Otherwise its incoherence will be used to justify the battle-cry of “those crazy Austrians/libertarians who are against everything!”
This article is good but misses the point somewhat.
“Did she really mean for me to consume different resources – something other than plastic? Is that really the end sought by those in the environmentalist movement?”
That is, essentially, what environmentalists want us to do: use renewable sources when possible.
But she promised to reduce the bill a lot more, if you were buying more than $1 worth. Of the two alternative interpretations, it should have been construed in your favour.
The US is suffering from Green Dope Syndrome
Penn & Teller have a great show on Recycling. Penn makes the point if the recycling everything was worthwhile, the homeless would go through the trash and collect and sort everything. You can tell what is worth recycling by what homeless people collect from trash – aluminium cans and bottles.
I have a libertarian-teaching routine that I use with cashiers at retail establishments almost anywhere–except in New Hampshire and a few other locales. It goes something like this:
Clerk: Your total is sixteen fifty, sir.
Me: No it isn’t.
Clerk: (Looking at the cash-register tape or computer screen). What do you mean?
Me: The prices marked on the shelves are six dollars for this screw driver and nine for for the propane torch.
Clerk: That’s right.
Me: No, that’s wrong.
Clerk: (looking perplexed): What do you mean?
Me: I mean the total you gave me is wrong. Six plus nine equals fifteen dollars–not sixteen fifty.
Clerk: (reviewing the register tape for a few moments before understanding suddenly dawns): Oh, yes, that’s right, fifteen dollars plus ten percent tax is a dollar fifty which adds up to sixteen fifty, like I said (looking rather relieved and sounding a bit condescending).
Me: Oh, no, you’re still wrong. The prices marked on the shelves are six and nine dollars. There is no mention of any tax.
Clerk: Everything is taxed; everybody pays.
Me: I don’t.
Clerk: (agitated): Sir, I have to collect the tax. You can’t have the items if you don’t pay the tax.
Me: Oh, so you’re a tax collector.
Clerk: No sir, not me. The state gets the tax,; the computer adds it to every transaction.
Me: Who is going to collect the money from me; who do I have to give it to?
Clerk (now sheepishly) I guess that’s me.
Me: If you are collecting the tax, you are the tax collector, are you not?
Clerk: If you say so.
Me: What do you mean, if I say so? If you don’t collect it from me I won’t pay it. Isn’t that so?
Clerk: I guess so.
Me: How much of the tax do you get to keep?
Clerk: I don’t get any of it; it all goes to the state.
Me: How much does the state pay you to collect its taxes?
Clerk: The state doesn’t pay anything.
Me: So you do the state’s dirty work for nothing?
Clerk: Yeah, I guess so.
Me: Hmmm. Very interesting. Do you know what Jesus said about tax collectors?
Clerk: No (sounding defensive).
Me: He likened them to prostitutes, but said both were entering heaven ahead of the scribes and Pharisees. You’re not a Pharisee too, are you?
Clerk: No.
Me: Well, I don’t want to get you in trouble so here’s the sixteen fifty. The extra dollar fifty is less than a prostitute would charge. Have a good day.
Actually, I’m usually less blunt, more polite and conclude by smiling and saying, “I’m just teasing. I know it’s not your fault that you have to work for the state for free.” In my experience it is the rare clerk or cashier who had ever thought of himself or herself as a tax collector until it was brought to their attention.
Very cool. I like it.
The seen is that you conserve a bag and consume an extra mint. The unseen is that, as 25c has been added to the money supply, prices rise so that 25c worth is conserved by someone else.
This would be negated if the plastic bag producers lower their prices enough to sell the marginal bag you did not consume. In this event society is wealthier by exactly the amount of utility someone else gets from the use of one plastic bag.
Someone else consumes a plastic bag instead of a mint, mint producers and plastic bag consumers consume 25c of goods that would have otherwise been consumed by plastic bag producers and mint consumers.
However, if the plastic bag producers chose to produce one bag fewer, then society is wealthier by the value of whatever the plastic bag producer does with his extra one minute of time, and one bag is conserved.
The plastic bag producer must conserve the equivalent of a mint to compensate for his reduced income, negating the one extra mint that you consumed.
Say each case happens 50% of the times someone conserves a plastic bag with no loss of utility, then you have effectively conserved half a plastic bag outright, and enriched society by half a plastic bag and half a minute.
If your aim was to conserve the environment, you HAVE helped your aim, but not to the extent one might originally think.
Not well-thought… Somewhat disappointing article…
There is nothing wrong with recycling or comsuming less, as long as it is a personal preference…
I’m sorry but this article is confused. Behaving in a resource efficient manner does not mean that you automatically use the same or more resources.
That’s true even if you save money. There are many ways to respond to the saved money, one of which is to work less, which would consume less resources.
Some things to keep in mind:
@Pervach — There was no increase in the money supply.
@Pervach — There is little renewable with regard to either the bag or the mint. I doubt that only renewable resources were used in their production (keep in mind that farming requires nonrenewable resources).
@pbergn — There is nothing “wrong” with conserving. If it provides a personal psychic profit, so much the better. But do not confuse your psychic profit with less resources being consumed in the aggregate, that is.
@Brian — Working less only reduces consumption of resources if no one else steps in to produce what you did not produce. I could decide to work less, but someone in my field who is currently unemployed would love to pick up that slack. Even considering unemployment benefits, most unemployed folks in my field would love the opportunity to prove themselves to possible full-time employers, even if for only a few hour a week.
@P.M.Lawrence — Can you provide more details around your $1 comment?
@(8?= and Pervach — Of course, the seen and unseen change with vantage point. One can always claim another unseen by moving the horizon — but that is exactly what Hazlett and Bastiat stated. This article discusses the unseen from the point of view of the cashier.
Note: The key in all of this is that the market cannot differentiate savings from conserving. And we agree that savings does not necessarily lead to a reduction in the use of resources. So why would conserving?
Brian was closest. A general reduction in production (Say’s Law in reverse) would lead to reduced consumption. But what befalls the marginal worker as production is reduced worldwide? A pretty nasty fate, wouldn’t you say.
It seems to me that the only way to conserve the plastic bag is for the store not to provide them. If they stock plastic bags and give them to every customer, it is the store that is not conserving, not the customer.
Part of the reason the store stocks and gives away plastic bags is because the have their names printed on the bags, i.e., an advertisement.
If the store did not purchase the plastic bags, the plastic bag manufacturer would have fewer sales, reducing employment, and their contribution to the economy. That is real conservation.
ok Jim @(8?» makes a great point, which way do you want to take the discussion?
Ned Netterville : “Me: Hmmm. Very interesting. Do you know what Jesus said about tax collectors? … He likened them to prostitutes, but said both were entering heaven ahead of the scribes and Pharisees.”
In Jesus’ day, the Jewish tax collectors in the employ of the Roman Empire were notorious for collecting far more than the required taxes (plus their necessary living expenses) and pocketing the difference. In that sense, they were abusing the tax-collecting authority granted to them and, therefore, were guilty of a moral crime that today’s cashiers who only collect the specified sales tax aren’t.
When Zaccheus the tax collector repented from his dishonest ways, he promised to make fourfold restitution to everyone he had cheated in accordance with Mosaic law. Also, Matthew, one of Jesus’ twelve disciples, was a tax-collector. Lastly, the penitent tax collector (aka publican) praying in the Temple was commended by Jesus for his humility, so only dishonest tax collectors were condemned by Jesus, not honest ones like the cashier in the given anecdote.
I always take the plastic bag and I am conserving by doing so.
I use the plastic bags as liners for the trash can. That way I don’t have to buy liners. So, by not buying trash can liners, I am conserving. Right?
Suppose I used those cloth reusable bags the greens are touting. Then I would be stuck buying trash can liners. I would be saving, or “conserving,” nothing.
Chad Rushing: “the penitent tax collector (aka publican) praying in the Temple was commended by Jesus for his humility, so only dishonest tax collectors were condemned by Jesus, not honest ones like the cashier in the given anecdote.”
Chad, thanks for your thoughtful and enlightened comments. Every time I debate this issue with an informed opponent, I am required to dig deeper, and I always learn more in the process.
I have written a book-length essay entitled JESUS OF NAZARETH, ILLEGAL-TAX PROTESTER, which is freely available in pdf on the web at: http://jesus-on-taxes.com/Page_7.html
It was, as far as I have been able to determine, the first comprehensive analysis of ALMOST everything Jesus said or did relative to taxes and tax collectors as recorded in the canonical and non-canon gospels. (I used to say it was the only such analysis, but subsequently others have looked into the matter. One that comes to the same conclusions I did (viz., that taxation is sinful and disciples of Jesus will have not part of it) is also on the web at the following site: http://whatistaxed.com/who_would_jesus_tax.htm I also use to say the essay analyzed everything Jesus said or did regarding taxes and tax collectors, but your comment here has made me aware that I had not addressed this passage–Luke 18:13. As I say on the website, the essay is a work in progress, and I shall correct for that omission with the next revision. I am indebted to you for this reason.
But regarding the parable of the penitent tax collector to which you refer, I think Jesus’ point was that this tax collector was “justified” because he acknowledged that he was a sinner and was seeking mercy (viz., forgiveness). Here is the pertinent quote from the KJV: “And the publican, standing afar off, would not lift up so much as his eyes unto heaven, but smote upon his breast, saying, God be merciful to me a sinner.” The reason Jesus was notorious for associating with tax collectors and to a lesser extent prostitutes was because, as he said himself, “They that are whole need not a physician; but they that are sick.” Jesus came to save sinners, not the self-righteous.
Prostitutes and tax collectors were the most notorious of sinners at the time of Jesus (and perhaps now) because they sinned more or less publicly, which is probably why he pointed to tax collectors as exemplars of what one did not want to be, but also numbered many such REPENTANT sinners among his most beloved followers, including, of course, Matthew.
I have read the charge that the Jewish collectors of Rome’s taxes were, as you say, notoriously dishonest, but I have seen no mention of compelling contemporary evidence to support that charge. It seems to me that any Jewish collector of Roman taxes, even one who was scrupulous in collecting no more than the “lawful” amount, would nevertheless have been reviled by his fellow Jews–and judged a sinner by Jesus–for so serving the occupying and oppressive Romans. Furthermore, I’ve read that the taxes Rome levied on the Jews, without any augmentation by the collectors, were sufficiently brutal so as to cause many Jewish peasants to lose their beloved land. This is a subject I am deeply interested in. If you can point me to any good sources on the issue, I would be indebted.
Recall that Jesus said such things as, “If you love those who love you, what reward will you get? Are not even the tax collectors doing that?” and, “If your brother sins against you…tell it to the church; and if he refuses to listen even to the church, treat him as you would a pagan or a tax collector.”
Chad, I am of the opinion that taxation is wrong (sinful, if you will) because it depends upon the initiation of force, violence and coercion to facilitate collection from otherwise inoffensive persons. All taxes include enFORCEment provisions. A tax is a very bad means of financing anything because it introduces the use of force into otherwise peaceful human relations, which I believe has many unfortunate and often unseen consequences. Because the initiation of force and violence generally beget more of the same, our ubiquitous reliance upon force for tax-collection purposes may very well explain why so-called “civilized” people have proven unable to dispense with other forms of collective violence, such as war.
Of course a clerk collecting a sales tax, which the taxpayer can avoid by not buying the items, is not as egregiously involved in taxation as a Roman or IRS tax collector, both of whom had or have the overwhelming brute force of empire behind them, but the sales tax is collected from the merchant by force or coercion and the clerk is nonetheless involved in the illicit–if not illegal–practice. Because taxation is used to take people’s property without their explicit consent, collecting taxes would be illegal almost anywhere under any legal system, were it not for the fact that the state immunizes its collectors from prosecution for extortion. In all other respects extortion and tax collecting are identical. Jesus, I think, opposed taxes because of his Father’s command, “Thou shall not steal.” And he would have forgiven those who repented of their part in it because that was his mission and his nature.
hey ned,
i guess you’ve listened to charles adams on roman taxation? happy christmas from australia.
http://mises.org/media.aspx?action=author&ID=600
ned’s jesus-anarchist analysis deserves to be the centrepiece of a christmas article.
enough of this revisionism of scrooge, whose meanness, innocuous economically, hardly makes him an endearing or life-affirming character.
“Working less only reduces consumption of resources if no one else steps in to produce what you did not produce. I could decide to work less, but someone in my field who is currently unemployed would love to pick up that slack.”
You are assuming a level of unemployment that is higher than what would be result from the transaction costs associated with losing and finding jobs.
Your employment does not prevent others from finding a job. No more so than your decision to work more hours prevents others from also working more hours.
We could all decide to work 80 hours a week simultaneously. There is nothing about economics that prevents that. Likewise, we could all decide to work only enough to barely survive.
You are just assuming that someone is going to naturally behave in a way to counteract your behavior. So you are assuming what you are setting out to prove.
“But what befalls the marginal worker as production is reduced worldwide? A pretty nasty fate, wouldn’t you say.”
The marginal worker does not need to reduce his work level, plus he would become more productive as less marginal resources would be freed up for him to use in his productive activities. Since you are assuming that he is marginal you must be using less marginal resources, which now he can use. Remember we are talking about you behaving in a way that you consume less resources.
Overall your argument relies on someone else behaving badly in proportion to how good I am. It’s like claiming if I litter less that won’t make a difference because someone else will litter more.
Brian –
Arguing from a utopian position makes the task of refutation next to impossible.
Yes, we could all sing a kumbaya world into existence — for a while, anyway.
As I understand your position, you propose a world where we all work less yet the marginal worker (and here I mean someone on the margin of survival) continues to work the same. You lost me here.
And you propose a world where marginal and supra-marginal resources are set aside yet are also freed up for the marginal worker. So productive farmland is conserved (returned to woodland, wetland, etc.) and the marginal worker is going to have access to the farmland that remains. You are claiming that this land is now available to him (how?) and you are implying that he will not attempt to farm less productive land.
Seems to me that he either watches his family starve or he clears sub-marginal land. Or he hums kumbaya with all the other utopians?
Not to sound harsh, but this world of yours — this solution — sounds oddly similar to that proposed by Thomas More in Utopia (a great read, by the way).
Your reliance on “we” is essential to the utopian position. Yes, “we” all could agree to do something, but do not include me in your “we.” (Which, by itself, destroys your argument.)
And I wouldn’t bet on your neighbors as members of this “we” either
Note: Folks in Switzerland claim to rise to your “we.” They say things like, “We all agree to use less electricity so that we do not have to build more nuclear power plants.” But their “we” is, of course, enforced by the social apparatus of coercion and compulsion.
newson, no, actually I haven’t, but I will and I appreciate the heads up. I had to go out and buy a headset so I could hear Mr. Adams ’cause my hearing is fading and my Macbook’s volume ain’t much. Of course I have read his book, “FOR GOOD AND EVIL, The Impact of Taxes on the Course of Civilization.” It serves as an invaluable reference manual for me. It is a marvelous resource. What I could never understand is why he allowed the “for good” to be included in the title. Virtually everything he documents in the book is about the great damages wrought by taxes upon successive groups (nations, empires, etc.) of people (civilizations) to the extent that many were virtually wiped out as a direct result of their always-upward-evolving tax policies unto the breading point. There is virtually nothing in the book documenting any benefits of taxation, and yet Mr. Adams could not bring himself to the obvious conclusion that mankind would be better off without any taxes whatsoever.
Thanks again.
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