When I was young, I was told by my parents “Use things, do not abuse them”. As a child it was hard to understand the importance and complexity of this advice but as an Economist, it all makes sense now.
Over the years I have realized the concept of wastage and how flawed our perception actually is. Although money is fungible (being of such nature or kind as to be freely exchangeable or replaceable – dictionary.com), we have taken the concept to an extreme. We literally express everything in terms of money, such that wasting food worth Rs. 1000 is actually considered as wasting a Rs. 1000 currency note instead of wasting the resources that were exhausted to get that food to us. We forget the entire food chain: the hard work of the farmer, the transporter, the miller, the procurer, the chef, and the uncountable renewable and non-renewable natural resources that have been consumed to get that plate of food to us. The Rs. 1000 note may somehow end up in our pocket through maybe a lucky draw, but the world has seen the last of all the oil that was burnt to convert a bunch of seeds into our plate of chicken pulao.
Money’s fungibility is so deeply embedded in us that we generally (if not always) tend to be extremely wasteful whilst having a buffet. We will see it as our right to even waste food which somehow is under our ‘ownership’ because we have ‘paid’ (with money) for it. Water is an even better example. People will waste water because it is so cheaply available – other than Karachi of course. Some people can even afford to waste electricity because they are paying for it. The “Mera paisa, meri marzi” statement is very naïve and we will see how.
The direct impact of wastage is very obvious: the opportunity cost of wastage (eg of food) is very high (a hungry person getting a meal). Even when prices act as a rationing mechanism (you ‘own’ the food when you buy it), a wasteful person is ethically & religiously answerable to his fellow people, as he strips them from the right of consuming that good. The discussions on this direct impact are common because it is tangible. The indirect impact is intangible, so it does not attract much attention.
The indirect impact is mainly economic in nature. Every social/economic interaction is deemed appropriate if consent is given by all the parties that are involved. For example noise in public spaces is considered inappropriate as most people would object. Similarly, smoking in closed public spaces has been banned across the globe as some participants of that transaction (production and consumption of smoke) have an issue with it (negative externality: passive smoking).
Unlike noise or smoking, wastage has far reaching consequences as explained below: Suppose 100 units of food are demanded, 70 being consumed and 30 wasted. If however there was no wastage only 70 units would have been produced, as there would be no need for the excess 30 units that are eventually wasted. This would be shown as an inward shift of the current demand curve, curbing supply and reducing the price. As market prices on an average are the same for everyone in the economy (ignoring price discrimination), the existence of wastage has raised the price for ‘everyone’. There will be some people who cannot afford (the same amount of) the ‘more expensive’ food now. People are using “Apna paisa” but affecting the purchasing power of “Dusre loag” who are not even remotely related to the wastage: the negative externality effect.
Prices, therefore, act as the invisible link, resulting in the negative externality discussed earlier on (noise & smoking). This negative externality is not necessarily limited to a geographical region which is why the economic impact of wastage is not tangible. Wasting chicken in Lahore will affect chicken prices in Rawalpindi as well (suppliers would otherwise supply to Lahore to enjoy higher prices). Despite the huge indirect economic impact of wastage it is not widely discussed because of tangibility (visibility) and the concept of materiality. Although the aggregate impact of wastage is colossal, the impact is divided amongst everyone (price for everyone rises) and on average each individual has to bear an immaterial cost which is hardly any incentive to speak up against such wastage.
Conclusively if we look at the deeper implications of wastage, we will realize how fickle the ‘Mera paisa, meri marzi’ argument is. It is time we change ourselves by inculcating values in the moral fabric of our society that discourages wastage probably by making people look down upon those who waste our precious resources.
The author would like to thank Ms Asma Khalid for her unfaltering support in editing of the article.