I.
When I get a delivery from Amazon, I throw the packaging in the trash. I do that partly because it’s free. My trash collector charges by the month, and I almost never exceed my allotted volume, so disposal costs me nothing at the margin.
But landfill space is not free, and if I’m not bearing the cost, someone else is. Arguably this means I throw out too much trash.
The most obvious solution is to charge me for landfill space, which might induce me to order fewer packages, or to order packages from sellers who go easier on the styrofoam, or to recycle. Unfortunately, a landfill charge might also induce me to discard my trash on my neighbor’s lawn or (if I burn it) in my neighbor’s lungs.
You might think a better solution is to pass a mandatory recycling law. But if I’m already ignoring laws against dumping and burning, I’ll probably ignore that law too.
Maybe you’d do better by convincing me that recycling is a moral imperative, so I’ll do it instinctively. Unfortunately, now instead of recycling too little, I’ll recycle too much. The policy goal is not to encourage recycling; it’s to encourage recycling when it’s efficient , and not otherwise.
Where does that leave us? The thrust of Michael Munger’s essay (as I understand it) is that your mistake all along has been trying to influence my behavior when you should have been trying to influence Amazon’s. If, for example, we place a hefty tax on styrofoam packaging, then Amazon will use less of it, which at least alleviates the problem.
II.
Unfortunately, taxing the manufacturer suffers the same shortcoming as all the other policies: To get some incentives right, it must get others wrong. Sometimes it’s optimal for Amazon to load up heavily on packaging material, which I, the customer, subsequently recycle. A tax on styrofoam does nothing to elicit this outcome.
More cryptically, Munger suggests that we could make Amazon “responsible for the disposal of packaging,” though I’m unclear on exactly how that would work. Does it mean that they’re required to send someone around to my house to collect the styrofoam? If I receive packages from eight different retailers, do they send eight trash collectors? Or do they coordinate their efforts in some way I can’t quite imagine? I don’t quite get it, though I certainly agree that it’s worth thinking about.
III.
That quibble aside, I agree with much of what Professor Munger has said, and I believe he’s said it well. So let me concentrate on some of the things he didn’t say, particularly with regard to using moral suasion as a policy instrument.
Professor Munger argues (in effect) that there’s both an upside and a downside to selling recycling as a moral imperative. The upside is that people will recycle more of what they should recycle, and the downside is that they’ll recycle more of what they shouldn’t. And he’s given us evidence that the downside can swamp the upside.
But there’s another great downside he didn’t mention. Namely: When you cast policy issues in moral terms, you degrade the character of public discourse. You lead people to see conflicting priorities as an occasion for battle, rather than an occasion for compromise. You send the message that policy is best decided by appeals to one’s inner conscience (or, more likely, to the polemics of demagogues), rather than by appeals to impersonal cost-benefit analysis. And this is a very bad thing. If overusing landfills is a bad habit, then branding everything you don’t like as evil is a far worse one.
If we’re determined to instill blind moral instincts that make people behave better most of the time, I’d like to nominate a blind moral instinct to respect price signals and the individual choices that underlie them—an instinct, for example, to recoil from judging and undercutting other people’s voluntary arrangements. I like it when my neighbors dispose of their beer cans properly. I’d like it even more if they’d stop trying to dictate other people’s wages, working conditions, housing contracts, and drug habits.
By concentrating our moral resources on recycling, we not only crowd out that nobler mission; we actually undercut it, by sending the message that price signals are unreliable. Of course, some price signals are unreliable, but the whole point of the moral suasion agenda is to get things right most of the time, not all of the time. Every time a misguided locavore makes the world a poorer place by choosing expensive local food, it’s because she’s absorbed the false lesson that prices are generally a poor measure of social cost - a lesson first absorbed, I suspect, at the feet of the recycling propagandists she first met in elementary school.
IV.
That’s a good reason to be squeamish about using moral suasion as a policy tool. On the other hand, there are times when we might want to overcome that squeamishness. I’m on board, for example, with making people feel guilty about committing murder for hire. I might be on board with making people feel guilty about working as OSHA inspectors, or accepting jobs that wouldn’t exist without tariff protection, or installing solar panels solely because they’re subsidized.
But there’s plenty of other socially wasteful behavior that nobody’s ever thought of trying to stigmatize. For example, I sometimes refuse to buy overpriced items even when I value them at more than their marginal cost. When an airline can fly me to California for $200, and I’m willing to pay $300, but (because of monopoly power) the price is $1,000, I choose not to fly. That’s socially inefficient in exactly the same way that my failure to recycle is inefficient —I elevate my own selfish interests over a clear opportunity to create value for others (in this case the stockholders of the airline company) and to enrich the world as a whole. The reason we (sometimes) have too little recycling is I (and people like me) won’t incur $1 worth of trouble to sort my trash, even when it might save my fellow citizens well over $1 in disposal costs. That’s no different in principle from my unwillingness to spend an extra $100 on an airline ticket, even when it might enrich my fellow citizens by well over $100.
I’m pretty sure, in fact, that my refusal to buy overpriced goods causes considerably more social harm than my refusal to recycle, yet I don’t feel a shred of guilt over it. Why, then, should I be made to feel guilty about not recycling?
V.
Ideally, we’d each be born with a conscience that’s guided by a Ph.D.-level grasp of the nuances of social cost-benefit analysis. Absent that, we’re looking to encourage good rules of thumb.
By and large, we should encourage people to trust market outcomes. We should make exceptions when it comes to things like murder for hire, but those exceptions should be rare.
Ought there, for example, be a great campaign to get people like me to buy overpriced airline tickets? I think not, for several reasons. First, I’d like to encourage respect for price signals even when price signals get things wrong, because price signals so often get things right. Second, I think we should generally be cautious about labeling people as sinners.
I am quite sure that, as social problems go, irresponsible trash disposal does not rise to the level of murder for hire, and I suspect it does not even rise to the level of balking at outrageous air fares. It’s true that imperfect price signals sometimes lead people to throw away the wrong things, but imperfect price signals are not unique to the waste disposal industry. Because of imperfect price signals, people plant the wrong crops, drive the wrong cars, and choose the wrong careers. If you’re out to combat bad market outcomes through moral suasion, why ever would you choose to focus on trash disposal when there are so many richer targets available?