Happy New Year!!!

To everyone in New Zealand. And early happy new year to everyone else! :p

Conservation Conserves Nothing. I Disagree.

This is a reply i made to a post over at Mises Blog

The situation was that the author re-used a plastic bag in a shop, and the cashier charged him 25c less because of this. The authors premise was that this was of no benefit to the environment, as the unseen consequences of his action fully negated environmental benefit of the seen consequences. e.g. he would consume another resource of similar price and environmental effect with the extra 25c, and someone else would make use of the marginal plastic bag he saved anyway.

My Reply:

The seen is that you conserve a bag and consume an extra mint. The unseen is that, as 25c has been added to the money supply, prices rise so that 25c worth is conserved by someone else.

This would be negated if the plastic bag producers lower their prices enough to sell the marginal bag you did not consume. In this event society is wealthier by exactly the amount of utility someone else gets from the use of one plastic bag.

Someone else consumes a plastic bag instead of a mint, mint producers and plastic bag consumers consume 25c of goods that would have otherwise been consumed by plastic bag producers and mint consumers.

However, if the plastic bag producers chose to produce one bag fewer, then society is wealthier by the value of whatever the plastic bag producer does with his extra one minute of time, and one bag is conserved.

The plastic bag producer must conserve the equivalent of a mint to compensate for his reduced income, negating the one extra mint that you consumed.

Say each case happens 50% of the times someone conserves a plastic bag with no loss of utility, then you have effectively conserved half a plastic bag outright, and enriched society by half a plastic bag and half a minute. If your aim was to conserve the environment, you HAVE helped your aim, but not to the extent one might originally think.

I also wanted to explore the consequences of the author choosing to work for 30 seconds less, and compensating the lost income with the 25c he saved in the shop, but i wanted to keep my reply short. I will explore this another day though.