Saturday, June 30, 2007

Profits In, Garbage Out

Egan Ehlers left this comment on my last post about garbage in Central America.

"I used to live in Central America and there is indeed a garbage problem there. But in the U.S. and Europe, the benefits from better ideas about garbage disposal are ruined by the fact that packaging is so wasteful. Open anything -- from cereal to computer software -- and you find inside is mostly air. Many American-owned companies are generating third world waste. Their political influence is one reason packaging laws are not changed, not just in Central America, but in the U.S. and Europe."

He has a good point.

Imagine that every single time Coca Cola sold a drink they dumped a piece of plastic into a nearby river. Imagine that McDonalds collected all of the packaging generated by their restaurants and dumped it directly into the ocean. People would be outraged. Yet, in effect, this is exactly what these giant corporations are doing in the developing world with their careless and irresponsible packaging.

When a country lacks the basic infrastructure to collect and dispose of its garbage there is something profoundly disturbing about packaging so many products in disposable plastic containers. The beverage companies are the worst. Central America is literally covered with plastic bottles. A small deposit on the bottles would solve the garbage problem in an instant. Only a few years ago most drinks in Central America were distributed in glass bottles with a deposit so the infrastructure was already in place when the switch to plastic happened. Drink garbage was almost unheard of. Now nearly everything is in indestructible plastic bottles and the rivers and oceans are filling with garbage.

If the beverage companies cared the least bit about the ecological disaster they were causing they would institute a recycling program and a small deposit. In countries where many people earn dollars a day, it wouldn’t take much of a deposit to make plastic bottles worth recycling. And it’s not like Coca Cola and Pepsi haven’t had plenty of experience with recycling programs in first world countries.

But of course, Coca Cola and Pepsi don’t care. Every plastic Coca Cola bottle floating in the ocean represents profit. Disposable packaging is cheap precisely because it is disposable. The oceans and rivers and caves of the world pay the disposal fees.

This is precisely where governments should step in. Free markets only work well when companies can’t pass the costs of their irresponsible actions onto others. Polluting a river with plastic garbage isn’t free, so it only makes sense that the people who create the garbage should pay for the cleanup costs. They profit from cheap packaging and we all pay the price in a garbage coated planet. Maybe it is time to leave poor Nike alone for a while and focus on the reckless and irresponsible corporations who are helping cover our planet in trash. Anyone feel like showing up at the Coca Cola general meeting with a dumpster full of plastic bottles?

Saturday, June 16, 2007

Plastic Coated Planet

Mike Shawcross, relates a funny story. When the mayor of a particularly dirty town he was working with was asked why people didn't get rid of their trash, he replied, in all seriousness: "Our problem is that we don't have a river."

We see that attitude all around us in the endless mountains of trash.Every street is littered with plastic. Every field is full of bottles and wrappers. The rivers are lined with garbage. The parks are filthy. If a place is clean it is only because tourists visit it and the local government pays somebody to clean up the garbage every day.

Thirty years ago most of the garbage that we created would eventually degrade. That is no longer true. Except for the tiny amount of plastic that has been burned, every scrap of plastic we have ever made still exists. It is choking the earth.

There is an island of plastic in the middle of the Pacific Ocean that is twice the size of Texas.

Some of the rivers in Asia have so much garbage in them that boats have trouble moving through them.

What amazes me the most about the garbage situation is that people literally do not see the garbage around them. In Central America people throw garbage out of the windows of their houses and allow it to pile up in their yards. We have seen schools that were so littered you could barely see the ground. If you ask people about the trash, most of them look at you like you've grown an extra arm.

Managing trash is a pain when you don't have regular garbage disposal. But it isn't that hard. A few of the Agros villages we've seen gather and burn their trash every month (though the other four weeks they just throw it on the ground). We even heard of one town that built a big pit for all their plastic-they burn and compost the rest.

It is sad to see people defacing their own environments. But it's even sadder when we have to share a planet with them. A river in Guatemala becomes a stream of plastic and sewage as soon as it hits its first village. When it hits the ocean, it becomes a problem for all of us.

Wednesday, June 6, 2007

Terrible Ironies: The Case for Trade

One of the terrible ironies of our time is that well meaning people often fight against the very things that could help make life better for the millions who live in poverty. There is probably no better example of this then the case of trade.

There are two main reasons that people object to trade. The grim reality is that there are huge differences in working conditions and wages between the rich world and the poor. Many people feel that there is something fundamentally unfair when people who make $40,000 dollars a year buy goods made by people who earn $1000.00 a year. Other people fear that they won't be able to compete with people who earn so much less. Both arguments are wrong.

Assume that in Fruitville, for every year of labor a farmer can create 2 tons of corn, or 10 tons of fruit. Assume that in Cornville, a farmer can produce 20 tons of corn or 4 tons of fruit every year.

Fruitville: 2 tons of corn per farmer, 10 tons of fruit per farmer
Cornville: 20 tons of corn per farmer, 4 tons of fruit per farmer

Imagine that the towns require 100 tons each of corn and fruit. Here is how many farmers are needed.

Fruitville: 50 corn farmers, 10 fruit farmers = 100 tons
Cornville: 5 corn farmers, 25 fruit farmers = 100 tons

Clearly Cornville is a little richer then Fruitville since it has only half as many people working in agriculture. But look at what happens when we open up trade between the two.

Fruitville 20 fruit farmers = 200 fruit
Cornville 10 corn farmers = 200 corn

There is still enough food to go around, but there are much fewer people needed to create it.

But what about the case of Poorville vs Richville? Poorville is a bunch of substance farmers. They grow 1 ton of corn and 2 tons of fruit per year. Richville is a big industrialized area, and grows 50 tons of corn and 25 tons of fruit per year. If Poorville is worse at everything, won't it be bad for them to trade with Richville?

Poorville 1 ton of corn per farmer, 2 tons of fruit per farmer
Richville 50 tons of corn per farmer, 25 tons of fruit per farmer

Poorville 100 corn farmers, 50 fruit farmers
Richville 2 corn farmers, 4 fruit farmers

Again, lets see what happens when we open up trade.

Poorville 0 corn farmers, 100 fruit farmers = 200 fruit
Richville 4 corn farmers, 0 fruit farmers =200 corn

Once more we can produce the same amount of food with much less labor. As an added benefit we also protect the environment since the likely reason that Poorville produces so little corn is that they are growing it on marginal lands that are destroyed quickly by agriculture.

But what about all the unemployed farmers? It's a good point and one of the biggest reasons why people fear trade. The corn farmers in Fruitville and the fruit farmers in Cornville can see what is going to happen to them, and social activists can see what is going to happen to the corn farmers in Poorville. The reality is that the adjustment will be hard for many people. But that doesn't change the fact that for society as a whole the adjustment is a good thing.

The reason is that farming isn't the only job that exists. The number of possible jobs is limited only by our imaginations. When we find a more efficient way of doing something it frees up people to work in new areas. Sewing machines, cars, computers, and email all cost people their jobs. But by allowing us to do more for less these technologies created new jobs that could never have been imagined. How many web designers were there in 1990?

In a healthy economy there will always be some unemployement as people move from old inefficient industries to newer, more efficient ones. Nowhere is this more visible then in agriculture. Yet this movement is what makes the economy bigger and makes us richer.

If everyone is working in agriculture there is no hope of progress because everyone is tied to the land. In many countries children can't complete school because they are needed on the fields to help feed their families. Trade give countries the opportunity to free resources to do other things. People migrate from the farms into jobs in teaching, road building, truck driving, and eventually information technology.

We lament the jobs lost to trade and new technologies because it is so hard to see the gains in other areas. We see the farmer who is now unemployed and too old to learn new skills, but we don't see his kids who left the farm to get a teaching diploma. The reality of it is that trade is the fastest way to create growth, because it allows everyone to do what they are best at. There will be jobs lost to trade, and it will be hard on some people, but the alternative is a continuation of the status quo. If we are really worried about the people who will be effected, we should offer them support and training instead of trying to hold back entire economies to protect dead-end jobs.

For thousands of years trade has created wealth. If we really care about the poor, we should make it as easy as possible for them to sell their goods to us. It is immoral to do otherwise. It is so terribly sad that the people who protest trade agreements do not know the harm they cause.