Proper Price for Plastic?

Plastic has rapidly replaced glass, wood, paper, cloth, metals, and ceramics as the go-to material to use in the world. It is quite hard to imagine our modern society without this essential material we literally surround ourselves with today. Are we paying the full price for it today or will the interest rate hit us like a truck down the road? The case I’m building in this article is that we are not paying the real price (yet) for plastic.

Inexpensive, flexible in its application and it takes a long time to degrade. There is plenty of upside to plastics, an umbrella term for many different chemically produced materials ranging from recyclable to totally-not-recyclable. I can’t think of a single day of my life where I haven’t used plastic in some shape or form to help me out: food storage, footwear material, my computer’s shell is plastic, nylon threads of my clothes, key chain, the door handle on the car, tubing, electric cable protection. It would be an exercise in futility to try and line up every plastic thing in my everyday life.

We are overconsuming the material. Why? My theory is that we are not paying the full price for the plastics. Or rather, we outsource the costs in other ways than the price tag you see when you buy it. Allow me to explain the case I’m building.

Production is not where the consumption is

There is a reason why countries like China and Indonesia are the main producers of plastic materials, the latter will be covered thoroughly in the article since its an easy example to push forward into the spotlight. One of the biggest reasons is because life is, simply put, cheaper there.

I asked some friends what they’d want in salary to work in a toxic factory, increasing their cancer risk by about 50% from just working there. Needless to say, the salary was sky high in every instance I presented the question like this. Would you accept an environment like this video presents? How much money would it take to keep you living close to that? Would they like it if the factories were allowed to dump by-product directly into the rivers or oceans you use for drinking water, potentially intoxicating the water supply forever?

These would be unacceptable conditions to live under. We happily consume tons of Christmas decorations every year, but living next to the lethal sludge and spray paints? No way. Yet, even if we where to live with the production of plastics (the West, especially the USA is making plastic materials after all), it’s under much stricter conditions because

socialism kills tshirt

The Chinese Government is allowing the death of its citizens – Socialism Kills!

we are allowed to protest any bad environmental practices, to an extent. At least much, much more so than the Chinese government allows their citizens that kind of freedom. A smidge better system. There are grades even in hell, after all.

Our corrupt politicians are happy to pocket bribe money to overlook bad practices, but we are also consumers, so a boycott is a very powerful way to punish unwanted behavior. The Chinese citizens can’t do that to the same extent that we consumers over here can. The Chinese state wouldn’t allow it to happen; too much is at stake.

Stolen money is oiling the transportation

There is an international agreement in regards to mail traveling with international postal services that allow postage to be fairly cheap all over the world. The service fee within a country is fair game to put prices on as you please, but once a package leaves your border the receiving country is restricted on how charges can be applied to the package on its way to a customer.

I can get free shipping on a package I order from China, but if I was to return it, the Norwegian postal service would stack a heavy charge on it, making it cheaper to just buy a replacement toy all the way from China instead. It is totally bizarre and reveals that there is something fishy going on. The simple truth is that someone else is paying for the shipping. In this case, the Chinese government subsidizes shipping. This is also known as taking tax money (i.e. extortion money) from its citizens and redistributing it to the transportation sector in various ways. Even the United Nations is in on the dirty theft.

The price of plastic stuff would be increased by a large margin if this practice would be nipped in the bud. The “China packages” from apps like Wish.com have put a huge dent in profitability of postal services in the West. The Swedish company Postnord was forced to put a VAT fee on mail from China because Sweden got literally bombarded with packaging. At its peak, it was 150,000 packages of cheap goods per day, making it impossible to operate without going bankrupt due to staff costs to handle the load. Late last year they came to an agreement with Wish that the seller would add a much smaller fee per package to its prices and pay that to Postnord (around $1, instead of Postnord’s $10 VAT addition).

A lot of consumers in Sweden went completely off the rails when Postnord introduced their VAT, hence the agreement was settled between Wish and Postnord as a middle-way that would be okay for both parties. What these people that got upset didn’t understand was that the transportation was only free because someone else paid for it and got really upset when they realized they were going to be paying a share of that transport cost.

Recycling and Storing

I do not believe in coincidences. If you take a peak on what is going on in the big picture you can follow the red line all the way to its source. The Californian ban of plastic straws is one of those things that can be explained as one link in a chain of events. I believe it to be the rude awakening of heavily consuming plastics, yet never having to store or recycle it properly.

China is the main source of plastics, but did you know that up to recently they were also a huge plastic waste importer? Half of the planet’s waste was going back to China. With that option off the menu, heavy users of plastic material needed to solve the trash problem on their own. When the government is trying to solve these kinds of societal

straws.jpg

and environmental things, one of its favorite and most precious tools in the toolbox is the ban-hammer: citizens in the west aren’t going to accept getting cancer from the production of our key chains and sure as heck aren’t going to let mountains of plastic pile up next to our houses and schools. Votes are on the line here.

Do you want to be the politician that is famous for enabling the waste mountains or be the “hero” that did something to prevent it? Easy sell, right? With the simple way of dealing with the waste gone through Chinese waste fills, we have to face the costs associated with using so much plastic a little bit closer to home.

So, what is the proper price of plastic? As a follower of the Subjective Theory of Value, it would be a fool’s errand to try and give you an exact number. What I hope I’ve done though is illuminate how we are paying an improper price. I hope the interest rate isn’t too high.

– ALEX UTOPIUM, Editor for Utopium.blog. Likes Molotov cocktails, long walk along the beach and are currently on a bitcoin-diet.

5 comments

  1. Comment later. Plastics are derived from petroleum, which as a fossil fuel we hope will recede gradually from planetary consumption. Alex you have written a magnum opus which I will try to digest over the next few days

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  2. You’ve definitely built a strong and interesting case. My only point of caution would be that depending on the degree to which the relevant industries are liberalized, a subsidy in China may turn out to be nothing more than a lessened degree of theft (tax). Normally, I prefer cheap consumer prices. But as you outlined, in rare cases like this, particularly those that have heavy negative externalities, high cost barriers to entry can actually be a benefit.

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  3. In NYC there’s a 5 cent charge for plastic bags to carry your items. It’s hard to tell if businesses are actually charging this. But the tax is to disincentivize their use. Not working. Now NY may ban them altogether real soon.I find it interesting that Trader Joe’s seems to be transitioning to plastic bags. Plastic cheaper than paper. I know this adds nothing to your thesis, but it is interesting. I heard the NY recycling program loses money.

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