By Tom Rhodes, 4/18/2013
Environmentalists, leftists, and statists lament the fact that we live in a throwaway society. Where rather than fix or recycle something our society suffers from over-consumption. The source is almost always attributed to greedy capitalists. What if it isn’t greedy capitalists, but the natural reaction to the actual costs of having too much government? First we need to look at the costs of goods, not the price.
No they are not the same. The price is the dollar figure used to transact a trade of goods or services between people, not the cost. The cost includes intangibles such as time, effort, travel costs, etc. Gasoline costs $3.50 a gallon where I live in Citrus County, South of me in Hernando Co. I can purchase gas for $3.20 a gallon. I don’t drive 40 miles south to save 20 cents a gallon on the purchase price because the cost in wear and tear on my vehicle, miles driven, and my time mean paying 20 cents more locally is more cost effective even though the price is higher. That’s just using the easily visible intangible costs to that gallon of gas.
The true cost includes what I had to do to get that $3.50 to trade for the gallon of gas. I’m in a tax bracket that results in me receiving only 72% of my contracted salary, the Federal Government gets the rest. So for me have $3.50 in my pocket I have to do $4.86 of work. I’ll use easy numbers to explain this. If I earned $35/hr and was allowed to keep all the fruit of my labor, I exchange an hour of work for 10 gallons of gas, however, because the government makes prior claims to my labor, I either need to earn $49/hr or work 1.4 hours to get that same 10 gallons of gas.
Now if instead of gas it was a repair service. Say I have a washing machine that needs to be fixed. The repair man says he can fix it for $200 and I’m willing to fix it for $200. Problem solved, but….. the government gets involved and the repair man is taxed and pays both the employee and employer side of the taxes. So instead of him gaining $200 for that repair he only nets $120. His time and effort doing other things has value to him, so to make repairing that washing machine a viable transaction he has to charge me $333. Not so Fast, I’m willing to pay $200 to do the repair, but at $333, not so much. In fact rather than pay $333 to fix a 5 year old machine, I haul it to the metal scrapper and get $10 for scrap metal and purchase a new unit for $500. The unintended consequence of the taxes extracted by government is that many transactions just don’t happen because the costs make them nonviable. People can and do change their behavior based on taxes, so raising taxes has historically proven not to garner corresponding increases in revenue.
Rather than repair and recycle we routinely toss out and replace, because to repair and recycle is cost prohibitive, not necessarily just the price of the unit. Why have a computer printer repaired. A typical diagnosis and repair of a printer takes about 2 hours, to be profitable, pay the wages, insurance, and taxes required by government means that to do computer/printer repairs, a shop must charge $50 to $100/hr or more. So minimally without any parts a printer repair will be in the $100 range. Considering high quality printers can be purchased for as little as $50, who would repair one. Intangibles in computer repair include such things as regulations in dealing with disposing of old circuit boards etc. increasing costs disproportionate to the price the market will bear. Recycling them is equally cost prohibitive. Why take the parts from 3 or 4 broken printers and build 1 or 2 good working units and have spare parts, when it would take a skilled technician 3-4 hours to do that work. If the tax burden on skilled labor and other regulatory costs weren’t so high, repair of printers, and other small appliances, would be viable.
How about plastic blister packaging now used for just about everything? Believe it or not that can also be attributed to too much government. Retail stores used to have clerks who knew what they were selling, and more importantly could monitor the counter, small expensive items would be kept in a counter and the customer would be served. Because government taxes and minimum wage laws make hiring entry people more expensive, it is more cost (not price) effective to put them in plastic blister packs, too big to easily conceal to protect against theft, and have fewer clerks to service customers. Rather than have a clerk count 1 or 2 items from a box of 100 for the customer, small expensive items are in big blister packs, resulting in massive amounts of plastic waste in our landfills. There is no reason for a 4X6” packaging for a micro-SD memory card, but the alternative is having people control their sale, the result is less jobs and more waste because the cost of low skilled labor is artificially greater than income it generates. RFID chips, plastic blister packs, etc. are all created because the costs are lower than having people actually provide low skill services in retail. Minimum wage and income taxes helped create throwaway society.
People don’t just look at price they look at TCO, total cost of ownership. Because government interference has dramatically increased the costs to do business, we’ve become a throwaway society, where we accept goods from sources that don’t have our massive government burden. When I was young there were many small appliance repair shops across the country, where for a reasonable fee you could have your toaster fixed, new brushes put into the motor of your mixer, etc. Technology and automation killed that type of business, new products last longer and just don’t break as much, or can be sold so cheaply (because they are built by robots) that replacement costs less than repair. This is one of the unintended consequences of more and more government, regulations and taxes make fixing things too expensive.