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Measuring Success

When my students are prompted to write an essay about recycling, many make the same mistake lay people make when evaluating the success of a program. For example, I had a student argue that the recycling program in his hometown was a success because the town collected X million tons of recyclable material each year. And that each year the program was in place, the volume of recycled material collected increased.

What is wrong with this assertion? Well, to measure the “success” of any program, you must define what success is. If we are evaluating this on economic terms only, then we must ask the question of “what are the benefits of collecting this much material as compared the costs of collecting this much material (including spillover costs.” It might be the case that increasing the volume of recyclables passes the cost-benefit test, but you cannot tell that at all by merely citing the quantity collected. Think of an analogy. Were you to become a proprietor of a business, would you measure your success merely as a function of how much of your product you could get into the hands of other people? After all, you could give away 100% of your inventory to people at no money cost, would that mean you are successful? For some businesses, like blogging, that is perhaps the right metric. But for most others, that would be disastrous. I’d love to see some firm come out next year and report to its shareholders that it clearly is a success because it is able to offload all of its stuff – even if it costs many multiples of revenues to do it.

There’s lots more to say about recycling, and we’ve covered it before and will cover it again, I just wanted to focus on this one aspect.

3 Responses to “Measuring Success”

  1. Joe says:

    Thank you for addressing this topic. Each Thursday, I take out the garbage. It’s not a pleasant task, and it’s made even more unpleasant by the presence of recycling. I am compelled to sift through newspapers, empty water bottles, cans and other containers before the recycling truck arrives at 6:30 AM. Adding up the cost of my time (not much, but multiplied by thousands of others doing the same thing, is significant), the cost to manufacture blue bins, the cost to publish and distribute rules for what can be recycled, plus the cost of the truck, and 2 man crew, and the cost of whatever they do at the destination probably yields a staggering sum. This sum is entirely redundant to the existing trash collection pickup, which is now only performed by one person. It’s really sad that these true costs will never be totaled, compared against their alleged benefits and published.

  2. Harry says:

    Two successful companies come to mind.

    The first is Wellman, a big recycler of PET plastic bottles.

    The second is Nucor, the biggest recycler of scrap steel in the US.

    Since they both have been in business for a long time, I would call that successful.

    When Ken Iverson was Nucor’s Chairman, the company did not ask for tariff protection, but under Dan Dimicco as chairman they did join with other steelmakers to ask for protection, even though they did not need to.

    The company is a fascinating study, and I would be happy to provide details to lead anybody further.

    But they are better at turning junk cars into value than the Cash for Clunkers program did.

    One interesting aspect about these two companies is that they are politically incorrect heavy-industry businesses, yet they use as raw materials trash cars and bottles. Think of a junk car in your neighbor’s back yard in the weeds, with plastic bottles on the ground, in the back seat, on the dashboard.

    Both companies are big consumers of electricity, which the greenies want us to use if it is not produced by burning coal.

    What tradeoffs would your students be willing to make? Send the bottles and cars to landfills that are not abandoned coal mines? Ship them to Nevada? Dump the cars off the New Jersey coast to create fishing opportunities? So many decisions to make if one is the EPA Czar. Should the barges that carry the cars out to sea be public or private barges, and if they are private, should we charge them fees and taxes? Or, as the Senator from New York would put it, at what point do we disgorge excess profits from Wellman or Nucor? Beyond the share governments take already from EBIDTA.

  3. jb says:

    Joe: I am curious, it sounds as though you are compelled by some local requirement to sort your trash. Do you face some penalty if you refuse to do so? If so, it seems to me that some private firm(s) presumably generate earnings from recycling the stuff that you toil to gather. Why aren’t you paid a wage, or allowed to share in those earnings? Isn’t this compulsory labor with no remuneration? Isn’t that what they call slavery? Or is that too strong a term?

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