In Napoli Where Waste Is King

Apparently letting the mob handle waste disposal was not a good move for the people of Campania, the region around Naples, Italy. The landfills are filled, and many people prefer huge piles of waste in their streets rather than let incinerators, which could conceivably emit noxious fumes, reduce the trash to ash. Dank sei Gott, then, that the good people of Germany are willing to provide “emergency aid” to the Italians:

For months, mountains of rotting trash have grown in the streets of southern Italy because the region has run out of places to put it. So for the time being — 11 weeks, actually — a 56-car train will arrive in Hamburg every day after a 44-hour journey, each bearing 700 tons of Neapolitan refuse.

The article goes on to note that while some countries like Germany seem to be on a pristine pathway toward ever more effective waste disposal strategies, many countries are on a Roman road still rife with rubbish, and governments from the local to the supranational level are scrambling to find ways of cleaning things up by, among other things, requiring recycling, restricting the use of landfills, and even taxing residents based on the size of their waste bins.

At the risk of sounding dim, the notion motivating all these policies seems to be that there’s too much trash. My immediate reaction is to wonder according to whom and by what measure it is presumed there is too much trash, but even granting the notion as fact, a basic first step would be to ask why that is.

To an economist, saying that there is too much of Activity T is virtually synonymous to saying that Activity T is being done too cheaply. Thus, if there is indeed too much trash, the economist will say that being trashy (if you will) is too cheap. The reason trashiness is cheap might have to do with the following two factors:

  • Most landfills are not private, for-profit enterprises but are instead usually either public or private-public partnerships. Because they are subsidized, the consumer is not forced to pay the market price for waste removal.
  • Even if a market price is charged, it may not be taking into account negative externalities like air and water pollution. In this case, the price would be too low.

Completely privatizing waste management and then using appropriate taxes to correct for externalities would be the most efficient way of getting the price right. And when the price is right, individuals then have an incentive to reduce their trashiness in the most cost-effective way they can, leaving government bureaucrats free to pursue other ends, like, say, taking down the mob.