In California, bottle recycling is mandatory, except when it’s illegal

California requires people to recycle their empty bottles.

However, this recent news article from the Merced Sun-Star says that three people have been charged with “recycling fraud” in California, because the bottles they recycled were “smuggled” into California from Arizona. The bottles from both states are physically identical to each other, but the price paid for the bottles is higher in California than in Arizona.

In the private sector, this kind of behavior is completely legal, and it’s called “arbitrage.” This is what wikipedia says about it:

https://en.wikipedia.org/wiki/Arbitrage

Arbitrage

In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.

This video shows an example of legal arbitrage. In the video, a guy goes to a bunch of Wal-Marts, buys up every copy of Monopoly for Millennials for $19.82 each, and sells them online for three times that price:

https://www.youtube.com/watch?v=FknkqT5tHK8

What that guy in the video did is 100% legal.

But for some strange reason, the people who sold bottles from Arizona in California were breaking the law.

Even though the bottles that they sold were real bottles, they were charged with “fraud.”

And even though the bottles from Arizona were physically identical to the bottles from California, they were charged with “smuggling.”

It’s completely ridiculous that this is illegal.

The people who bought Monopoly for Millennials from that guy in the video don’t care where it came from. As long they get what they paid for, they are happy.

But for some weird reason, politicians seem to think that there is some inherent difference between bottles from California and bottles from Arizona.

In the real world, the only difference is the price. There is no physical difference between the bottles.

If recycling bottles was truly a good idea, then California would be happy to recycle bottles from Arizona, just like the customers who bought Monopoly for Millennials from that guy in the video were happy to buy what they bought. If the item in question is truly valuable, then the buyer won’t care where it came from.

Therefore, for California to mandate bottle recycling in some cases, while outlawing it in other cases –  even though the bottles involved in both cases are physically identical to each other – is absurd.

Here’s a clip from “The Bottle Deposit” from season 7 of Seinfeld, where Kramer and Newman try to make money by recycling bottles from New York in Michigan:

https://www.youtube.com/watch?v=bGJZcHgqX1g

December 5, 2018. Tags: , , , , , , , , , , , , , , . Economics, Environmentalism.

One Comment

  1. AWC replied:

    Here in Socialist Kali, where we bathe and shower in taxes (and apparently voters are too stupid to repeal even a hefty gas tax the State forced on us because the average Kali voter got confused by the words on the repeal prop), we pay a CRV on every bottle and can we buy. The State, in its pure, magnanimous sanctified mission to help everyone, the environment, and anyone else with their hand out (using someone elses money of course), uses that money to fund and encourage recycling through various programs and to pay back the CRV upon redemption. So, the State gets pissed off when they have to refund the CRV for a bottle they didn’t collect the CRV on to begin with. A COMPLETELY foreseeable risk that only the free market would have identified and dealt with before rolling out such a program.

    And…since this is a GOVERNMENT run program after all, it’s incredibly inefficient and is not providing enough financial incentive to anyone in the process chain except the consumer that wants the money that was stolen from them when they bought their soda or beer or water. Due to inefficiencies, many recycling centers have closed down, this has led to a decrease in the amount being recycled which, giving the State more credit than it deserves, was probably the plan anyway, as that is less money they have to pay out, but get to collect since this program has been running an operational deficit for years. With lower costs and higher revenues, they can stroke their chins, sip their bourbon and stoke their cigars while they tell the people “they are working on fixing it.”

    The solution will either be to increase funding, which means just writing bigger checks out of the general fund which means some other program will get less money to fund, until that program begins to fail, and then more bourbon is poured and cigars lit. Or they will just fallback on Taxifornia’s go-to for EVERY problem, raise taxes. So they will jack the CRV, As the CRV is jacked up, the total cost of applicable products rise, economics will take over and people will begin substituting or forgoing, in order to avoid the higher tax, which over time will lead to this problem repeating itself as CRV revenues drop, and then the bourbon and cigars are back.

    OR…the Government could get the f out of it and let the free market determine the value for recycling and come up with a much more efficient system that does not require taxes to fund and rafts of government paid employees to manage.

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