That’s not exactly a canard, it’s closer to a non-sequitur. Nonetheless, it is invoked often by those who favor an even heavier hand of government to regulate and restrain market activity.
First of all, there is no such thing as “markets.” Does the New York Stock Exchange wake up in the morning and throw out reams of paper? Do the computers that are the brains of eBay spontaneously spew chemicals into the nearby waterways? Of course that is silly, which is why it is absurd to make comments like, “markets” produce waste (and just as absurd to say, “governments” produce waste). But though it is silly, it has seemed in my view to have picked up incredible pejorative rhetorical force.
Second, ignoring the rhetorical issues above, where exactly does waste come from? Or more fundamentally, what the heck is waste in the first place? Or how can it possibly cause a problem? The last question will be the subject of a future post. The simple point of this post is that the production of “waste” has nothing to do with market forces. A simple thought experiment should make it clear why. Imagine a company that makes paper. It cuts down trees in a nearby forest. It trucks the trees to a mill, where the trees are ground into a pulp. That pulp is trucked to a paper factory where it is combined with all kinds of interesting chemicals and machinery to spit out reams of nice, clean, white paper, perhaps packaged in a petroleum based plastic packaging. This company is private and the paper is sold on the “market.” Is the fact that it is private and the paper is sold in stores determine whether there is pollution? The chainsaws used to cut the trees leak oil and emit harmful fumes. The trucks and trains used to haul the logs emit CO2 and other particulates. Their tires wear out and end up in dumps. Their seats tear and those plastics end up in dumps. Their engine coolant sometimes spills. And when the wood is turned into pulp, it must be done using machinery powered by electricity – often this is electricity produced by burning coal, which produces sulfur dioxide, nitrogen dioxide, carbon dioxide, coal ash, mercury, and other particulates. And finally, when the pulp is turned into paper, the chemicals may possibly contaminate nearby air and waterways. And in each stage of this process, some pieces of the tree are “wasted” and not used; some energy that is input into the cars and machines are not used and are therefore wasted. The containers for many of the chemicals may end up in dumps and therefore “wasted.” And so on. It is easy to point to all stages of this process and look at all of the “waste” that has been generated.
For your thought experiment, change two tiny things. Eliminate the for-profit private owners of the paper process and replace it with the People’s Paper Producing Process (i.e. have the government own all the means of production and run all of the processes) and then instead of allowing consumers to go to the market to get paper, have the Paper Czar set a monthly allocation for every end user of paper, and then have the paper delivered to each user every month by the government. Does anything in this change lead to less waste being produced? No waste? Of course not. It is absurd to even suggest that it would. When the government operates a chain saw, does it suddenly stop burning fuel? Does the chain oil never leak when in the hands of Uncle Sam? Do internal combustion engines inside of government owned vehicles not spit out CO2 and other particulates. When the government uses chemicals, does it use every last drop, or magically get the chemicals from the chemical plant to the paper factory without having to use a container?
In fact, given a basic understanding of the differing incentive structures across for-profit private sectors versus the non-profit and government sectors would have you understand that there are extremely powerful forces that would promote a reduction in waste in the private market process as compared to the government non-market process. Think why.
But even if the incentive structures are exactly the same, the point is obvious – waste does not come from the fact that a good is produced privately or collectively, or how it is distributed. Waste is the byproduct of production processes. If the government is in the business of producing, then “waste” will be generated. So it is patently absurd to make comments like, “markets produce waste” as if it is some indictment of freedom and the capitalist economic order.
Now, is there any context in which the criticism makes any sense? Yes, of course. It makes some sense because under private market orders characterized by free exchange and secure property rights, people are richer. More “stuff” is created. And when people are richer and more stuff is created, there is by definition more waste coming from those processes. But this is not what the general criticism seems to be. If it were, then the criticisms ought to be that “production produces waste” and we ought to not produce stuff. Now, there are a few anti-consumerists ought there making these sorts of arguments. But the general environmental movement that is hostile to market forces seems to be offering us the idea that if only our production was done collectively, or done “for people” and not for profits, that somehow all of this waste would disappear. That is pure nonsense. Maybe this is a giant straw man, but from a good many conversations I have had with concerned environmentalists, this is, indeed, what the arguments are boiling down to. Perhaps I need to get out of academia to clear my head a bit.