Recyclemadness
A friend of mine has recently alerted me to the latest brilliant idea for creating a more sustainable campus: organizing competition between various fraternities on who can recycle more. This seems to be just one form of recycling competitions that are sweeping US college campuses, the largest and most comprehensive one being the so called Recyclemania which purports to include over 550 colleges and universities. So what, aside from the dubious value of recycling in its own right, is wrong with organizing a competition like this one where young people can be given some incentives to do something valuable and "enlightened" while having fun? Well, lots of things. As my friend pointed out, these sorts of competitions create all sorts of disincentives that although perfectly legitimate within their own sets of rules, go squarely against the spirit of competition. For one thing, you are actually encouraged to consume more products so that there is more recyclable material available. If you have access to some free resource (like printing paper) you may abuse those privileges in order to help your team win. And if your team happens to be a college fraternity, and the competition is perceived to give you any form of increased standing within the Greek community, there is pretty much no restriction on what those good ol' frat boys will not be ready to do to help their brothers come on top. I know, because I've seen it happen before.
When I was freshman in college various halls of my dorm decide to compete in who can collect more spare change in the form of coins for some worthwhile social cause (I can't remember any more what it was). It was all interesting and fun until one very rich guy decided to drive to the bank and get several hundreds (or maybe it was even thousands) dollars worth of coins. This was no problem for him – the amount of money was rather insignificant, he needed a way to amuse himself, and the conspicuous consumption that he engaged in had all sorts of positive consequences for his social standing, most importantly all the fringe benefits that accompany it at a college campus. After that the competition was all but over, and none of us had any incentives to help out any longer.
Another story that comes to mind is an alleged attempt in New York City (I think) a few decades ago to try to get rid of all the rats by paying people for every caught rat. It was all going fine until it was discovered that some rather enterprising individuals started breeding mice and selling them, thus actually not helping with the problem and gaming the system for their own benefit. The whole program was brought to a close after that. I have not been able to confirm this story, but it seems pretty plausible.
All of this shows that it's pretty hard to mess with a free market. If there is a natural demand for a product or a service, someone will sooner or later come up with a way of exploiting it, provide us with that product or a service, and hopefully make himself richer in the process. On the other hand if there is no obvious economic benefit from a product or a service, tinkering with the system will only create perverse disincentives that may still benefit a few, but will make everyone on the average worse off in the end.
When I was growing up in Bosnia we didn't have recycling, or even a notion of recycling. However there was a demand for used old paper, and every year our elementary school would organize an effort to get us students to collect as much old paper as possible. We would go door to door, the boy-scout way, and ask our neighbors to give us their old newspapers. We would collect them in one huge container that was located in the schoolyard, and once the container would be filled with paper a truck would come from the paper plant, take it away, and then pay the school for it. The money that the school would earn would be sufficient to finance a school trip or some other activity. One summer a few friends of mine and I decided to collect some old newspapers for our own sake, so that we can earn some pocket money. I remember how giddy and excited one poor friend of mine was when he got paid after we sold the paper to the paper plant. This was perhaps the first time in his life that he had some discretionary income. Working hard and getting paid for your effort can be an extremely potent and stimulating learning experience. I just find it really ironic that that lesson was taught much better a few decades ago under communism to the kids in elementary school than it is being communicated today to the college students in the US.