Waste and Efficiency in a Consumer Economy

Waste and Efficiency in a Consumer Economy

Steven McMullen (Hope College, USA)
DOI: 10.4018/978-1-5225-6120-0.ch008

Abstract

Some complaints about consumerism rest on the perceived wastefulness of economic practices, for example, (1) the observation that individuals and firms discard large quantities of valuable goods, (2) the mass production of low-quality consumer goods, (3) research and product development serve the desires of the wealthy, (4) rapid product cycles and obsolescence encourage a constant stream of new purchases, and (5) consumption practices undervalue environmental and ecological goods. This chapter argues that a practice is “wasteful” if it is systemic, avoidable, and results in a lower-than-possible wellbeing. Each of the observed “wasteful” elements of the consumer economy can be explained by economic and marketing practices, though only a subset are avoidable and diminish consumer wellbeing, and are therefore truly excessive. This chapter concludes by examining some proposed solutions to economic wastefulness, as well as some alternative visions of economic progress that can more powerfully distinguish between justified and wasteful practices.
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Introduction

In many urban areas, both when it is legal and when it is not, you can find individuals gaining a large portion of their consumable goods from the refuse available around their city. Once the occupation only of those in extreme poverty, “dumpster diving” or practicing “freeganism” has grown as an underground phenomenon among those wishing to protest the excesses of the modern consumer economy. As an anti-consumerist protest this practice is notably coherent: it is only possible to live well consuming out of dumpsters if there are significant quantities of discarded goods available in the system. By pulling their food out of dumpsters, these activists are refusing to contribute to the demand for consumer goods (Ferrell, 2006; Shantz, 2005). More importantly, this practice draws attention to the sometimes staggering volume of wasted goods that are discarded each day in a large city. Statistics about food waste and landfill contents reinforce this point and highlight a paradox about our economic system – it may often be the case that the “efficient” practice is to discard a large quantity of useful goods.

Overall, our economic system is efficient in a number of important ways. We get far more value out of each unit of energy, we do a much better job using and preserving manufacturing materials, and recycling continues to improve. Given the strengths of a competitive market system, this kind of growing efficiency makes sense. What requires explanation is the cluster of complaints about the wastefulness of our consumer economy that warrant examination. There are a number of features of modern market economies that often strike participants as excessive or misaligned in some fashion. Consider the following list:

  • 1.

    Each day, vast quantities of food and other valuable goods are discarded, often before being sold.

  • 2.

    Our culture seems awash in redundant, inexpensive, consumer goods in the midst of economic insecurity.

  • 3.

    Research and product development are focused on goods that cater to a small, wealthy portion of the population.

  • 4.

    Products turnover rapidly and become obsolete, fashions change, and so the rate of new consumption is accelerated.

  • 5.

    Overconsumption of goods and energy causes a wide variety of environmental and ecological problems.

Each of these complaints targets the particular mix of goods and services produced in the economy. In economic terms, each of these complaints focus on the allocation of resources – a wasteful allocation occurs if we are using scarce time, talent, and materials to produce something that does not maximize well-being. Further, if the complaints are warranted, they indicate that we could collectively be better served by devoting our considerable productive capacity to a different bundle of goods and services. For example, we could produce less food if we wasted less, and we might receive some benefit from improved infrastructure and fewer resources devoted to the fleeting enjoyment of inexpensive consumer goods.

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Background

It is worth noting, from the outset, that none of these phenomena are entirely new or unique to consumer capitalism. People were finding treasures in the trash, producing cheap junk, selling luxuries to the rich, and following fickle fashions long before anyone could point to a consumer economy. Moreover, the term “waste” has a number of different uses. This implies that the problem of consumer waste requires careful definition. For these complaints to qualify as a critique of our economic system, two criteria must be met. First, it must be the case that our current economic practices encourage these types of waste to a point of excess. The fact that individual human error will always result in some food waste is not enough. Second, to count as waste, a practice should, in some sense, be worth changing. If all available solutions are more costly than the problem, then the critique fails. Stated differently, it should be the case that there is some other feasible allocation of resources that would improve human well-being. These criteria will hereafter be referred to as requirements that waste be systemic and avoidable. Alternatively, “waste” (or wasteful) will, in this chapter, be used to refer to systemic and avoidable practices in our consumer economy that diminish our ability to make people better off.

Key Terms in this Chapter

Consumer Economy: A kind of market or liberal economy in which the center of economic power resides with consumers. This can be contrasted with an industrial economy or an agricultural economy.

Wealth: Any assets of value. In its broadest use, this term can encompass available services as well.

Marketing: The practice of advertising goods, services, or firms to potential customers.

Efficiency: Getting the most benefit out of the resources and technology available to us. In economics, this is often more fully specified as “pareto efficiency,” which characterizes the distribution, allocation, and use of resources and technology such that there is no way to make someone better off without hurting someone else.

Waste: Goods, services, or wealth that is attainable or exists, but is not used to its full benefit.

Wasteful Practices: Systemic and avoidable practices in the consumer economy that diminish our ability to make people better off.

Market(s): The institutions that allow decentralized production and exchange of goods and services in a liberal economy.

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