Every so often a newscaster, print journalist or other talking head will go out and dig through some dumpsters in the better part of town following up this expedition with a lengthy diatribe on the high cost of wasting food. Though we have heard this refrain every month or two since childhood, these reporters act as if it is a great revelation that grocery stores throw out "perfectly good" produce, that restaurants get rid of packaged food "suitable for eating" and on and on. Of course this is hardly news to the host of indigent who live on such fare, to the grocery and restaurant workers who feed themselves on food that was to be discarded¹, the "freegans" who try to make some sort of political statement out of living on such waste, and a host of others. But, as it is a topic raised again and again, and as even conservatives are sometimes inclined to agree we "waste too much", I feel the need to point out that "waste" can be a perfectly rational choice².

Let us start with a very simple example. You want to make asparagus and mashed potatoes. The process is pretty simple. You take asparagus, wash it under running water, cut off the woody ends of each stalk, place it in boiling water, and, when it is done, remove it from the water. For mashed potatoes, you peel the potatoes, cut them into pieces, boil those pieces, then mash them with milk, and maybe some butter, and then serve. However, if we took the view of our reporters, it would be seen not as a straight forward cooking process, but as a system rife with waste.

Let us take the asparagus. When you rinse, if the heads are somewhat loose, various bits of asparagus may break free and fall into the sink. Usually they are small, and not numerous, and no one bothers to retrieve them. But they are also perfectly edible, and thus they are wasted. Similarly, when we cut asparagus, we tend to cut it higher than strictly necessary, as cutting it where we are certain it is not hard speeds up the process, while trying to find exactly where the woody part starts is either time consuming, or else allows for the possibility we will end up with some hard pieces in our finished product. Thus, we tend to waste some part of the asparagus which could be eaten. And then, when we cook the asparagus, yet more pieces of the flower end tend to fall off, and yet are rarely gathered and served, and so we lose even more.In the end, we may have wasted 5% or even 10% of the asparagus. Maybe more if we tend to cut the asparagus higher than most.

I know I am beating a dead horse here, going into such length on such a simple topic, but I want to make my point extremely clear. So, let me look at our potatoes, and point out why waste makes sense there. Let us look at peeling potatoes. You can peel them very carefully, trying to waste as little of the potato as possible, or you can peel them quickly, accepting that you will lose more potato. In addition, if you try to waste as little potato as possible, you have to accept that there will be some skin. You also must be careful when boiling them, as if you boil them too much, they will begin to break down and lose material. So, to keep the maximum amount of potato, to waste as little as possible, then you must accept a rather unpleasantly crisp texture, or else accept some waste in order to get a more palatable food.

The list could go on and on, but let me stop here and make a general point. "Waste" is, economically, a meaningless term, at least in the sense it is used in these news reports. People do not "waste" food, they dispose of food which has no economic value to them, or which has a value too low merit keeping it. It is called "waste" because those criticizing them disagree with their assessment, but, usually without much foundation other than a sens of self-righteousness. After all, if these people truly believed the "wasted" food were valuable enough, why not gather and resell it? They could make a killing if they are right and the food is more valuable than the cost of gathering and selling.

But, of course, the truth is it is not. Groceries throw away "perfectly good" food because keeping it risks retaining some spoiled food, and the cost of selling one spoiled item is much higher than of "wasting" a hundred unspoiled ones. And the customers agree. After all, they are the ones who would never again patronize a grocer who gave them salmonella, so they are telling the grocer to "waste" that food rather than risk even remote contamination or putrefaction. In fact, they are responsible for even more "waste" as the same ones who complain about "waste" are the customers who would not buy from a salad bar with wilted lettuce, blackened cauliflower or browned apples. And yet they blame the grocer for following their commands.

And the grocer is but one example. The truth is, all cost-benefit calculations could be described as "waste" if someone wants to contest the decisions made. For example, as I said above, we could minimize the waste when peeling and cleaning vegetables by spending a longer time. In fact, we could probably save even more "waste" food by picking through those bins of food which was thrown out looking for usable pieces. However, the time involved would probably not be worth the return. In the time it took to find $10 worth of unspoiled "free" food, we could probably have earned ten times as much in various other employments. Which means, far from "wasting" that food, the decision to throw it away is a sound economic decision, choosing to economize and refuse to waste our one truly limited resource, time, or labor, if you prefer.

Let us take a non-food example. Cutting trees into boards. There have been various ways to accomplish throughout the ages, and, I must admit, I am not aware of the most recent technology, though I imagine it is less wasteful than the earlier mills, especially since environmentalists love to target logging. But, when the first mills were in place, the wind and water driven ones, as well as the earliest steam mills, the various solutions adopted tended to be more wasteful than the old "two men, one long saw and a pit" method. It produced a lot more sawdust and, as a result, a lot fewer boards. However, there was a huge benefit, or two. First, it could turn 100 trees into 400 boards many times faster than two men could turn those 100 trees in 500 or 600 board. Second, the reduced amount of labor required meant that, per board, the amount of labor required was significantly reduced. (In addition, though it is not relevant here, the quality was also much more uniform, relying much less on the skill, and exhaustion, of the men running the process than manual cutting.)

However, if the theory of "waste" is right, then why did not the less wasteful manual process win out and drive the mechanical mills from business? If the sawdust produced was just "waste", then should the manual production be more efficient and thus profitable? So how did the mechanical mills win?

And here we have the same cost-benefit analysis as we had before. And the main consideration is time. After all, if a machine can produce 100 boards in an hour using 2 men, and a saw pit can produce 20 using the same two men, if their salaries are comparable, the saw pit costs five times a much per board. And that is truly  where we can say the sawdust is not "waste". The sawdust is the price of getting back those additional four hours of labor for every 100 boards produced. Of course, were labor free, that might be a consideration, as we could throw five times as many men at the problem and produce comparable results, but even then there is the question of five times as much space required, five times the tools, and so on. It is conceivable if labor were absolutely free that manual processes might win out, but considering that man is generally unhappy when toiling, it is impossible to conceive of a situation where labor would even approach a price of zero.

Which brings us back to our basic premise, that "waste" is only truly waste if you exchange it for something of lesser value, which is not the case in any of the situations described as "waste". If I choose to simply throw away food, rather than tote it about until I can consume the remainder, it is a judgment based upon the inconvenience of carrying it and the reduced joy of eating leftovers versus the cost of fresh food. Yes, some may think I made the wrong judgment, but their values and mine clearly differ³. That is not "waste" simply a disagreement. And likewise, every other example of "waste". Yes, there is food which is still edible and yet is thrown away. Similarly, there are times when edible foodstuffs are not fully used in the manufacturing process. However, in every such case, the decision was made for a reason. It may prove later that it was not economically correct, and the loss is greater than anticipated, but in those cases the manufacturer will bear the costs and either change or be driven out of business. However, in most cases, the decision proves correct, and the supposed "waste" is simply a "cost" being seen through eyes uninformed as to the economic circumstances.

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1. There are a number of restaurants and grocers which forbid employees eating discarded food, or taking home waste, and for good reason. It is not heartlessness, nor is it a desire to waste. But if food deemed unusable is available to be taken home free, it is an incentive for employees to produce nothing but waste. Thus, to avoid encouraging bad practices, stores which have no problem with strangers going through their cast offs (I fed a friend's goats, pigs and sheep with discarded produce from local groceries), prevent employees from doing the same.

2. This is actually very similar to the essays I wrote ("Cutting "Costs"", "Misunderstanding Profits",  "Again?", "Government Efficiency", "Two Examples of "Inefficiency" in Capitalism", "Pro Hoc, Ergo Propter Hoc", "Bad Economics Part 10") on the supposed inefficiency of capitalism, due to the "waste" involved in advertising, redundant practices and the rest. In both cases what is seen as waste is called such only because those criticizing fail to take into account both the benefits gained from the waste, and the costs of preventing such "waste".

3. All economic value judgments are subjective and cannot be right or wrong. For a more lengthy discussion see "The Limits of "Scientific" Management", "The Right Way", "Greed Versus Evil", "Planning For Imperfection", ""True" Prices",  "Price Gouging", "Put Your Money Where Your Mouth Is, Or The Logical Implications of Price Gouging Laws", "Anecdotes and Extreme Examples", "Greed and the Price of Oil", "The Inherent Disappointment of Authoritarianism" , "The Basics", "An Examination of the Economics and Sociology of Government Spending", "Two Paths" and "Tyranny Without Tyrants".