The June issue of Cato Unbound features a lead essay on recycling by Mike Munger and, so far, response essays from Edward Humes, Melissa Walsh Innes, and Steven Landsburg. As of right now, there are also “conversation” essays from Mike Munger and Melissa Walsh Innes.

In their opening essays, Humes and Innes reiterate the claim that recycling makes economic sense because we are discarding so much “valuable” material in landfills. I put “valuable” in quotes intentionally: as Munger notes, in this context, something is only a resource (and only “valuable”) if people will pay you for it. Paraphrasing Munger, people would be hustling to pay you for your bottles and cans if they were valuable resources. The fact that they aren’t suggests that these aren’t resources. They’re garbage.

Here’s where prices (and profit and loss signals) are useful. If the resource savings from recycling were as substantial as people claim, we should expect to see greedy entrepreneurs and businesses hustling to enjoy these savings by bidding up the prices of recycled materials. It might be true that we save substantial energy by producing from recycled aluminum. Why, then, don’t firms take advantage of these cost savings? I’m pretty sure it’s because these savings are more than offset by other costs.

Humes and Innes question the wisdom of discarding materials, but there’s another way to think about it: holding materials in a landfill is just another way of keeping them in inventory. As Munger details, recycling is costly–usually more costly than producing from virgin materials. If we exhaust our supplies of virgin materials, rising prices will encourage people to develop substitutes. One substitute for mined virgin materials would be…mined materials in landfills. At first glance, this looks wasteful, but again, prices allow us to figure out whether it is more efficient to recycle an aluminum can or save it for later. Munger makes this point explicitly with respect to plastic in his first follow-up essay:

We recycle plastic by shredding it and using it as a fiber. Or by burning it, recapturing no more than 15% of its energy potential. It would be better to bury it, so in the future it could be strip mined when it is actually more valuable.

It’s true the prices are distorted by interventions and policies, but the appropriate fix isn’t subsidized recycling. It’s clearly-defined and well-enforced property rights. I addressed this in my very first article for Forbes. The paper on which the Forbes article is based was recently published in the Quarterly Journal of Austrian Economics and can be found here. Murray Rothbard’s essay “Law, Property Rights, and Air Pollution” is one of the contributions on which I rely.