Against economic viability

Thu Dec 29 12:00:00 2016

Category : Blog

Author : Mike

I recently watched as the local rubbish collector emptied all of the plastic from the recycling bin into a black bag and threw it in with the general rubbish. Curious, I asked what they were doing.

“The recycling company doesn’t do plastic bottles at the moment. It’s not economically viable.”

There’s no arguing with economics. Case closed.


This is where science and technology must step in: if we could mechanise things, come up with a technology that would bring down the price of reclaiming material, recycling plastic would become economically viable and people would do it. This is why everyone is suddenly interested in photovoltaic solar cells: as the price comes down, usage goes up. But plastic recycling is not there yet. While science is working on bringing the cost down, we just have to be patient.

Let us imagine, however, that I am not a patient man. Let us also imagine that I am interested in science and faith. So let us ask if there are more options available to us than just waiting for science to get it together.


What does “economic viability” mean?

Before I go on, it may be worth separating out three possible uses of the phrase “not economically viable”:

 - We will make such a loss that our organisation will no longer be able to function.
 - We will make a loss.
 - We will make less profit than we would otherwise have made.

Obviously, the way one approaches problems of the first kind is different to the way one approaches problems of the third kind. Still, people do things which are not economically viable in one (or more; sometimes all) of these senses. Let us look at a few.


Educating young people

Consider education.

You pay HK$ 100,000 a year to send your kid to kindergarden. Then you pay for extra tuition, for music lessons, art lessons, dance lessons, badminton. It is breathtakingly clear that the economic return on badminton lessons is minimal. And yet we pay for them. Most afterschool classes are guaranteed to be economically unviable at level #3, almost certainly at level #2, and conceivably at level #1. Why do we do it?

Do we stake the family silver against some hoped-for future benefit?
Do we do it because everyone else is doing it?
Do we do it for fear of what might happen if we didn’t?
Do we do it because we believe that well-educated children will make the world a better place, and you cannot put a price on that?
Is it some combination of all the above?

Ignoring for a moment the eye-watering cost of international schools, the Hong Kong government spends HK$ 50,000 per pupil per year on primary education, and HK$ 80,000 per pupil per year on secondary education. Indeed, education makes up one fifth of all HK government spending.

Clearly, at both an individual level and a government level, any suggestion that “education will never catch on unless the price comes down” is laughable. It is interesting, by way of contrast, that we are so ready to believe that that “plastic recycling will never catch on unless the price comes down.”


Caring for old people

Now consider the other end of life: at what point do your parents cease to be economically viable?

When you are a child, your parents pay your school fees. Clearly you are winning.
When you are a young adult, they sometimes buy you dinner, you sometimes buy them dinner. You more or less break even.
When they are old you have to look after them: you pay their medical bills, maybe you pay their rent, their food, their funeral costs. They are a financial drain. Even if they have savings to cover those costs, that is your inheritance being spent.

I will leave it to each reader to work out which category of “economically unviable” (#1, #2, or #3) their own parents fall in to.

So why do we do it?

It’s probably not some hoped-for future benefit.
It’s probably not fear of what might happen if we didn’t.
It’s probably not passing things on to future generations.
Rather, often, we care for our parents simply because they are our parents.
We love them, and caring for them is the right thing to do.
Hey, you might even believe that God wants you to do it.

All this is just as well. What an unusual role scientists would have in a culture where people said that they would look after their parents only once science and technology had advanced to the point where caring for the elderly could turn them a profit.



So let me return to recycling: at what point do we look beyond economic arguments?

I gain no financial benefit by walking to a recycling container instead of dropping my plastic bottle over the Hong Kong harbour wall. In hard numbers, 2.5 HK$/kg for clean, sorted, bundled plastic does not outweigh the cost of my time.

Once it is in the sea, of course, there is no financial benefit for anyone to go and fish the bottle out again. But here the hard numbers are different: plastic in the ocean costs the world economy 100 HK$/kg, which does not outweigh the time taken to sail to the middle of the ocean with a net.

So let us imagine another metric than financial gain or economic viability.


I walk along the harbour wall near where I live and pick up plastic rubbish. If I am alone I can fill a black bag in ten minutes. This is not good economics: I can’t even make minimum wage. Even if I could, it is still a lot less than I could make if I spent that time as a university academic. A lot less.

What if I take my son along? Then it takes about twenty minutes to fill a bag, so on the face of it the economics looks worse. Except that for every hour he is occupied I do not need to pay $250 per hour to send him to an afterschool activity, so already it works out OK from a childcare point of view.

But what about the time we spend talking? I cannot check my e mails on a litter sweep. One hour of solid quality time: priceless. Indeed, all of my kids enjoy the relationships built as we take time together for such activities. A chorus of “Oh! Me! Me!” always greets the question “Who wants to help Daddy sort the recycling?”


What other motivation might someone have for taking their kids on a litter sweep?

Would you do it for some hoped-for future benefit?
Would you do it because everyone else is doing it (or at least because I am doing it)?
Would you do it for fear of what might happen if you didn’t?
Would you do it because you believe that litter free oceans will make the world a better place, and you cannot put a price on that?
Or because kids with a concern for the world around them make the world a better place, and you cannot put a price on that either?
Would you care for your ocean because it is your ocean?
Would you do it because you love it, and caring for it is the right thing to do?
Hey, you might even believe that God wants you to do it.
Would you do it for some combination of all the above?


Bottom line

Let science and technology make their progress to bring down prices until recycling plastic is economically viable. That is a worthwhile goal. But do not assume that the only thing that can or should motivate people – even in Hong Kong – is the economics.


Small print for people who want to follow the numbers:

The Hong Kong government publishes the number of children in primary and secondary education, as well as the relevant level of government spending.

Globally, 6 billion tonnes of plastic has been produced, of which 3% has ended up in the ocean, causing damage presently valued at US$ 13 billion per year. Estimates on how quickly plastic breaks down in the ocean varies from fast to never, so for the sake of an estimate I will go with 200 years. All in, then, 1 kg of plastic does 100 HKD of damage over its life time.