Let's Talk Trash

California newspapers ran articles in January 2026 about the abysmal performance of the State’s recycling program. The legislature adopted fixes to the program and we are now seeing a struggle between the packaging industry, CalRecycle, the Governor and the State Legislature over whose vision is going to win. Given the expectation for new laws, new lawsuits and rapidly-filling trash sites, there are a few basic facts that I would like to put on the table.

Fact 1: Although there are altruistic corporations, the majority of businesses are operating to maximize their profit and hence their stock value. This fact is the cornerstone of capitalism and taught in Economics 101. The consequence is that when a business has a choice between recycled material and new raw material, the cheapest will always win.

Fact 2: In spite of protests to the contrary, only individual citizens pay the price of every decision made by businesses and governments. Citizens pay the price in a combination of three ways: (a) increased cost of a product, (b) increased taxes to regulate an industry, and (c) experiencing the externalities of a product that affects the quality of life.

Given these two facts, the current faceoff is not going to resolve the trash issue. The result will likely be pushing any meaningful resolution to the future when the current politicians and business owners are no longer around. This is an “Our kids will have to solve this one” solution. We’ve effectively left: (i) global warming causing crazy weather and projected coastal flooding, (ii) growing scarcity of fresh water, (iii) unhealthy air from pollution, (iv) national debt in the trillions and, (v) wealth inequality that is likely to cause social unrest. So, what’s one more problem for them?

Capitalism could be called the problem but it is not. Capitalism works because it harnesses human nature. The marketplace can and should be tweaked so that it incentivizes behavior that the majority of society wants. The question then becomes, “How can we affect the market so that society achieves what the majority wants?”

“Society” already owns the trash. How can we make it profitable for industry to recycle the trash rather that use new raw materials? If we accept the assumption that the average consumer is not willing to buy the same product at a higher price just because it comes in a recycled container, then government needs to use everyone’s taxes to make the recycled container cheaper. If the product is then cheaper, the customer will buy it instead of the product made with new raw materials. Notice that the solution is to tweak the marketplace so that businesses and consumers make decisions that are best for society. Since this solution does not depend on punitive laws and coercion to achieve its goal, it will be a quantum shift in our approach to a problem.