All Commentary
Wednesday, January 1, 1992

The Economics and Ethics of Trash

Author and screenwriter K. L. Billingsley covers California for the London Spectator.

As they watch barges plying the high seas searching for places to dump their foul loads, Americans are increasingly concerned with the problem of garbage transport. Is this practice ethical? And are there examples where it works?

To answer these important questions, several concepts must be considered.

Individuals, companies, and regions all have comparative advantages over others. For example, Aretha Franklin is a better singer than Madonna. Steinway is better equipped to build quality pianos than the Toys “R” Us Corporation. Kansas is a better place for growing wheat than Rhode Island or Florida.

Likewise, some regions are better suited than others for the disposal of garbage. Some are worse. A case in point is the Seattle area, a densely populated municipality that generates over half a million tons of solid waste per year. The Seattle area is also quite damp, and landfills are subject to leaching into the water table.

Eastern Oregon, on the other hand, is sparsely populated and practically a desert, much more suitable conditions for the disposal of waste. Together with eastern Washington, the area boasts some 300 million tons of capacity, enough for approximately 100 years. But comparative advantage isn’t the only issue.

When two parties trade anything, including trash, they do so because both believe that they will derive an advantage from the deal. This is the principle of voluntary exchange, a pillar of the free enterprise society.

As Professor Dan Siegel of the University of Washington pointed out at a conference put on by the Foundation for Research on Economics and the Environment, Seattle has worked out an arrangement with Gilliam County, Oregon, to ship its trash there.

In view of statist failures, both environmentalists and public officials are increasingly willing to try free market solutions. Seattle opened its 30-year trash proposal to bids, and the contract went to Waste Management, Inc., owner of a massive, modern site in Oregon with a capacity of 60 million tons.

But what about the locals in Gilliam County?

This region has been economically depressed for some time, and there was strong support for the landfill among residents for the jobs and stability the project would bring. Waste Management opened its facilities to inspection, which helped gain favor. The dump will also be divided into sealed compartments, which will guard against leaching and maintain a record of what trash came from where.

Portland, Oregon, also ships its trash to Gilliam. The stuff arrives already compacted, in closed railway cars. The only real inconvenience is noise, for which Waste Management will pay a fee to the state of Oregon, as well as a “host fee” to local governments.

While Seattle and Gilliam County seem satisfied, there are objections. One hears, for example, that people should be forced to live with their own trash.

This objection ignores the principle of comparative advantage. Certainly each community should pay for its own disposal. But requiring them to store their own trash makes no more sense than demanding that they use only oil from their own wells.

Others claim that the trash transfer will short-change Oregonians. But this too is bogus. As Professor Siegel stated, Texans don’t hesitate to export oil on the grounds that there won’t be enough left for them.

Siegel believes that, ethically and economically, there is no problem with the regional plan. The bureaucratic dimension is another question.

There have been attempts to slap fees on the waste under the rules of interstate commerce. Proposed changes in the Resource Conservation and Recovery Act would make it more difficult to transport waste from state to state. On the positive side, both the EPA and even the Sierra Club support this kind of regional arrangement for trash disposal.

Siegel did not use this plan as a model for international transfers of toxic waste. Corrupt officials of dictatorial countries have accepted payoffs and inflicted suffering on their populations. For example, Guinea allowed the dumping of toxic incinerator ash from Philadelphia without consulting the locals. This kind of abuse, according to Siegal, should be opposed.

Domestically, solid waste is a local issue. Therefore it is more correct to speak of “problems” rather than “the problem.” Each municipality must work out its problem within an economic and ethical framework.

When comparative advantage and voluntary exchange are taken into account, however, it is clear that the Seattle-Oregon arrangement works well. As America’s trash continues to pile up, we need models that not only work but respect individual rights, market forces, and private property. If we disregard these, we will soon transform a problem into a crisis.