Sunday, December 19, 2010

Economics, and an Online Game on Recycling


How much can we learn about economics, indeed about our own selves, from recycling, and about the choices we have to make on a daily basis individually and collectively? Let's start answering this question by exploring some of the most basic ideas involved in the academic discipline we call economics.

The science of economics tells us that, at any given point in time, a given resource or factor of production will be scarce. Even in times of 'abundance,' resources and factors of production could be said to be more scarce or less scarce depending upon its supply and upon the availability of technology to extract or modify them for use. This concept of scarcity is central to a fundamental imposition of constraints that we, as societies and individuals, face in how to best manage the resources we are endowed with as well as to how best seek new sources of resources and factors of production. And among the most important of such constraint is what economists have called opportunity cost

Due to scarcity, our decisions over how we use, or don't use, a given resource or production factor will impact other decisions over other resources. For example, time is an important resource, and depending upon our preferences, values, and other subjective and non-subjective constraints and circumstances, we may have (at any given instance) the choice to employ this resource in one activity or other. So let's say we have an hour of free non-sleep time left after a busy day: we may choose to spend that hour in leisure (such as watching a TV comedy show), or we may opt to take care of unfinished house chores. Given constraints and circumstances, such as health and physical fatigue, we now have to make the choice on how to spend that specific hour. If we undertake chores, then leisure must be given up, and if leisure is preferred then the opportunity for house chores will be not taken advantage of. Thus the opportunity cost of leisure is not doing chores, the opportunity cost of chores is forsaking leisure.

Because economics is a social, behavioral, and management science, such concepts apply to almost everything in our professional lives in addition to many day-to-day tasks. Recycling programs seek to conserve and maintain the level of resources at a rate that could keep production of goods and services physically sustainable. They also may prove beneficial to businesses and producers in helping to minimize costs (especially in the long run). But, as societies and economies evolve, expand, and become more sophisticated---and as their production possibilities curves (the total combinations of goods/services that can be produced with available production factors, resources, and technology) expand outward (which would imply the development and implementation of greater technology, efficiency, as well as an expansion of resource bases)---constraints, preferences, and circumstances will still be faced; the dilemmas posed by scarcity will not magically go away. This applies even to businesses that have specialized to serve the recycling industry--from garbage collectors to materials reprocessing--as production factors like labor and capital (i.e. vehicles for transporting waste to disposal sites and recyclables to reprocessing sites, procuring machinery used at sites, etc) and their prices will necessarily need to be constantly considered against scarcity, opportunity costs, and other conditions.


To get an idea of some of the decisions that are involved and are measured and employed against these conditions faced by recycling specialists, I would suggest to take a crack at this game . Published as a part of webpage for a documentary on the recycling industry in Egypt (one of the densest nations in Africa and the developing world), the object of the game is to run a typically modest recycling firm in Cairo and to match their industry's efficiency rate of 80% recycling. Of course, you will face constraints like upkeep costs, figuring out how to expand to optimum recycling facilities and capabilities, as well as the opportunity costs of choosing to whether expand operations to another district in the city (when available). Given all the challenges of matching that efficiency rate in a very dense urban environment, with relatively more modest technology than those found and used in the West, I can say that this strategy simulation has been a humbling and enlightening experience for me.