A Free Market Look into the Stupid Israeli Plastic Bag Law

Here we go again. The government is setting another price control. This time on disposable plastic grocery bags.

I shop with my own reusable bags. My wife’s grandfather, may he live long and prosper, gives us a bunch of crap every time we visit the US. Among the crap he gathers at retiree broker conventions is occasionally useful things like the bags the crap comes in. We shop with those bags because we are one of the few that are environmentally conscious. And we don’t like having plastic bags everywhere in our house.

But being environmentally conscious is not a good trait to have. I’m not bragging about it. It’s a form of OCD. It’s a compulsive thing we have, my wife and I. I don’t wish it on others. In fact, I’m a big fan of littering from a moral perspective. See Defending the Undefendable, page 205. Read it for free. Autodidactify.

That said, I have no problem at all with people who triple, quadruple, and quintuple bag, take bags right out of the dispenser just to play with for fun and throw in the garbage, etc. Why don’t I have a problem with this?

Let’s grant there there are environmental problems that may kill us all one day. Let’s say landfills will inherit the Earth. Why is it happening? Well, whenever the price for a good or service is pushed below the market rate by force, you end up with a shortage on the sell side and an excess on the buy side. If bananas are 10 shekels a kilo, then if the government comes in and says you’re only allowed to sell them for 5 shekels a kilo, there will be too many buyers (an excess) and not enough sellers (a shortage).

The key is, it’s the same exact thing with dumping garbage. If the price of dumping your garbage is zero, then you will have an excess of dumpers, an excess of landfills, too much trash. The price of dumping is set by government at zero by force of monopoly. No private company is allowed to come into the market to try and compete with the government for the service of dumping people’s trash.

And now, lo and behold, people are dumping, because the price is zero. And the government suddenly has a problem of how to get people to stop dumping so much. So instead of getting out of the dumping industry and letting the free market price the service so people will have to pay to get rid of their trash, or perhaps even be paid for organic trash, the government intervenes even more and messes with another price, that of plastic grocery bags.

And on our side, we try to make people “environmentally conscious,” to voluntarily control themselves when there’s someone messing with the price mechanism. If bananas were decreed to be 5 shekels a kilo instead of 10 and suddenly there’s a shortage, you can do one of two things. You can either ask people to voluntarily restrict their banana consumption, or you can push the price back up to equilibrium at 10. 

Same with dumping. We can either waste our time educating people about landfills to alleviate the dumping excess, or we can push the price of dumping to equilibrium by freeing the market. Educating people to be environmentalists won’t ever work. It’s a lost cause, and it’s stupid. The answer is free market pricing.

It’s to have private companies figure out what to do with plastic bags. An entrepreneur buys a plot of land and starts a dumping business. His interest is to preserve the capital value of his land and make money, so he’d obviously prefer organic trash over toxic waste. Organic trash he pays for, because it makes his land more fertile so he can sell it to a farmer when it’s full. Toxic waste he doesn’t want, so he jacks the price way up for dumping it, and separates it from his organic pile to cordon off any problems. If anyone mixes toxic waste in with the organic, he charges a major premium. Or, alternatively, he separates it himself to make it easier on his customers, investing in that capital.

Another entrepreneur comes in and figures out a way to turn plastic bags back into oil like this guy, who sounds like he smokes too much pot.

So he starts collecting, or maybe even paying for, plastic bags. Why does he do this? Because private dumpers charge such a high price for dumping them since they ruin the capital value of dumping sites, and there is a need in the market to lower the price for dumping plastic bags.

In such a case, where dumping is not free but rather a service that you pay for just like any other, people will use much less plastic bags because the price for dumping them is so high. Prices are how humans divide resources on the planet. There is no other way to do it.

That’s why being “environmentally conscious” is nothing but a form of OCD. There is no benefit in trying to make people “environmentally conscious”. There is no point, and it should not be a goal. There is no way in hell or on Earth that we will get enough people to voluntarily care, for no economic reason, about a landfill somewhere that they don’t see, enough to be able to actually tackle the problem. People care about their wallets. Environmentalism cannot work for the same reason that socialism can’t work. Because there is no way to divvy up resources without private property and free market prices.

Every single environmental problem on Planet Earth is a result of government monopolies and price controls. Every single one. Water, air, dumping as well.

What will happen now that the government is forcing a minimum price on bags? The stores that cannot afford the capital equipment necessary for this mess, like bag counters and whatnot, will not be able to comply. Cashiers will be sitting there counting bags manually, causing longer lines. It will be a big mess.

There is no need for such a law. All you need to do is get the government out of the dumping business and let private entrepreneurs figure out how to get rid of trash in the most cost efficient way possible. All the government does is take it from you and stick it all in a landfill, organic, toxic, and everything in between all together. Why? Because they just take whatever land they want for free and just dump on it. Would a businessman who bought his land with his own money do such a thing? No, he would dump in the most efficient way possible to preserve his purchase and even make it more valuable.