The Right Amount of Waste

A recent story in the NY Times provides some encouraging anecdotes about companies that are moving to take greater responsibility for recycling. Companies like Starbucks and Coca-Cola, for instance, are finding new — and in some cases profitable — ways to take responsibility for the waste that their product packaging generally becomes. More recycling generally means less waste, less energy used, and less pollution.

Waste and pollution are business-ethics topics about which there is some room for agreement between the moralist and the economist. The moralist points out that it’s unfair to make innocent bystanders suffer the ill effects of your factory’s pollution. The economist points out that market inefficiency can result when costs, financial or otherwise, are not internalized (i.e., when costs are instead imposed on innocent third parties).

But an economically-savvy point of view must also recognize that there is in fact a socially-efficient level of waste and pollution, and that that level is not zero. Waste and pollution could only be driven to zero by shutting down industry (of all kinds) altogether, and that would have disastrous effects. In other words, we would have to sacrifice things we care about, like the ability to raise world-wide standards of living, in order to reduce pollution and waste to zero.

Consider this analogy: economists likewise sometimes argue, rightly I think, that there is an efficient level of crime. The methods by which crime could be driven to zero are both enormously invasive and enormously costly. It is not efficient — not a good use of resources — to drive crime to zero, even if we think it technically possible.

So waste and pollution, we might say, are always bad, but not always wrong. They are features of a system the overall productivity of which is an enormous boon to humankind. It would be crazy to say that gains in productivity must be sought at any cost, but it is likewise crazy to value anything else (e.g., the environment) so highly that it drowns out all considerations of efficiency.

Now none of this tells us about whether particular efforts at waste reduction or pollution abatement are good or bad. But it helps frame the issue. What we’re looking for is the right level of pollution and waste, and that level is not zero. It is also likely to shift over time, as affluence grows and technology evolves, and as companies like Coke and Starbucks and a thousand anonymous start-ups find new ways to make environmental protection efficient, in the broadest, most ethically-significant sense of the word.

2 comments so far

  1. CrimeDime on

    Like the crime analogy (obviously).

  2. andreabcreative on

    “Corporate social responsibility is defined as the firm’s obligation to respond to the externalities created by market action” (Husted et al., 2006, pg. 3). But “firms do not always manage corporate social responsibility strategically” (Husted et al., 2006, pg. 2) which makes it very refreshing to see that a few key company leaders are beginning to manage CSR strategically, both from a consumer benefits standpoint and a responsible business practices (both financially and socially) standpoint.

    These companies seem to understand that a CSR concept, like recycling, can have benefits for the customer and the business on multiple levels. And if they can make a profit, then that should make it a sustainable (includes earth-friendly, financially-responsible and able-to-be continued) practice. Seems like this would make it a benefit for all parties involved. It seems as though these companies are effectively executing two practices simultaneously: CSR and Strategic Communication, which has “a common purpose the influencing of individuals, groups, organizations, even whole societies” (Botan, 1997, pg. 1).

    And it helps when the when we understand the impact of production and management of businesses. Many managers must balance multiple tasks to ensure their company remains environmentally and socially responsible. “Management has responded to the additional external pressures by expanding the locus of their goals and the developing codes of ethics that are frequently reviewed and reinforced as a means to ensure ethical behavior throughout the organization” (Angelidis et al., 2008, pg. 1).

    And when everything comes together the right way, it seems as though the company really does become a smooth running, and efficient, machine.

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