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> Firms are already incentivised by profit to not waste

Anecdotal but my perception is that clothing has become so extremely low quality, and I assume dirt cheap to produce, that they have less of an incentive to let it go to waste. When I buy socks they get holes after wearing them 7 times, and then they go in the bin too.

If you can make a shirt for $1 and sell it for $10, you can throw out literally half of your inventory and still make $5 per shirt.

If you throw some plastics into a coal fired power plant it is almost the same as if you would burn oil.

I have a feeling nobody is paying particularly close attention to capturing usable energy from this process

There is in France a kind of shared network of hot water used to heat up our homes (well, those that are connected and paying into the system at least). Part of the system works by burning trash and capturing the heat in the process. Supposedly they also work on using renewable energies to do the work.

Some people argue that the whole system is going against the objectives of recycling stuff but at least it's better than just burning it to get rid of it.

There are anecdotes about trash incinerators requiring less kerosene to finish the burn, because of the plastic content.

Update: I made a silly math mistake. That's $9 profit per shirt. So if you make 100 shirts but only sell 50 and burn the rest, that's $450 profit. You make $4.50 per shirt manufactured.

Stated another way: you can total up the manufacturing cost of the shirts you destroyed ($50) and distributed evenly among the ones you sold (50/50=$1 each) and just add that to the cost of each shirt you sell when calculating profit. Same result.

This would been that more competition would be good for the environment because it would drive down prices and margins, and thus the incentive to overproduce. But this rule actually decreases the competitive pressure and increases margins because market exit barriers = market entry barriers

How will apparel be cheaper? When they lower production runs, it'll be less available, which will mean prices will go up.

The only error in the whole post. I think it's more productive to ignore that and focus on the important stuff... which is about why this kind of market interference isn't going to work out the way a naive optimist would hope.

Economically, producing less to start with is not very different from what is currently done, destroying excess inventory. Therefore I don't think it's at all a given that prices will go up.

Destroying the inventory has a cost though.

Setting up the production line is the expensive part, firing things off it once it’s running is what’s cheap.

Storing stock is very expensive too.

This incentivizes what’s happening if you’re making cheap clothes.

This isn't exactly a supply and demand situation that might cause prices to increase by restricting supply, like what you sometimes see with global commodity cartels such as oil.

What's happening in this case is that they are overproducing because profit margins are high enough that they can overproduce and still be happy with the profit after discarding the extra, in the hope of capturing the stochastic upside of extra sales from never being out of stock.

This might cause various random fast fashion junk items to occasionally go out of stock when they wouldn't have in the past, but it's not like you're going to see long waiting lists or high aftermarket prices. People just won't buy that stuff because there will be lots of alternatives, are they just won't buy anything at all and realize they don't need it.

So yes, in an abstract textbook sense, the price might go up in the sense that you might experience some probability of your desired items selling out when that probability was lowered before. But I don't think anybody in their right mind would argue that's a serious economic detriment.

Maybe there's a case to be made that this is a crude way to address what is essentially an allocation failure. But that alone doesn't mean that we shouldn't try it or that it's bad policy.

Overproduction is not an issue. The issue is that they damage unsold things instead selling them for a market price dictated by supply and demand.

This is not only clothing and apparel, also sporting goods and many other items.

This should be forbidden across all industries. Unsold stock should be delivered to non-profits at no cost for further distribution.

If you can't prove that you either sold or transfer to non-profit an item you manufactured then you should be fined for each unaccounted item proportionally to their market price.

And suddenly the EU becomes #1 in private non-profits, the first ever non-profits to turn up revenue and reinvest them into stock from Gap and H&M.

Also the first non-profit to build gigalandfills in Africa.

Obviously there would be some rules for non-profits eligible for those donations.

> so this adds another incentive and removes the pollution externality they have been enjoying.

Displaces it. And adds other externalities like C02 to do so.

If they ship unused crates to Africa then they get cheap clothes. Win win all around.

Not always a win. There have been a few reports that sending large numbers of clothing donations to areas that don't specifically need them has the result of harming local industry that would otherwise be able to produce and sell clothes.

The appearal industry is among the most exploitive in the world. It's good to kill it before it springs up. Bangladesh is not anyone's example of a model country.

You seem so certain despite having it backwards as likely as not.

the western ordered cheap quality overproduction solution of swamping developing countries with it, where much also ends in a trash heap, means they can continue the exploitive and environmentally destructive mass production.

Smaller local industries would be economically better for the countries, supply more aligned so less waste, and there’d be less of the bad factories in Bangladesh.

Note specifically that I said local industry. I don't mean some factory owned by a global chain.

I'm specifically talking about local, small business. Giant companies usually have better labor protections in the 3rd-4th world than small buisness does.

people making clothes for themselves to and to sell in a subsistence living style isnt quite comparable though, and not working exploitatively to extract the wealth from labour to a different country has a value of its own

I read this as "We've had our industrial revolution. No, we don't want you to get yours."

OK, send them somewhere else or sell them at a discount

but brand dilution

I don't care. If you over produce then you made a bad economic decision, tough luck. Destroying goods for accounting reasons is an abhorrent policy driven by greed.

This is kinda the real thing at play here... and the 'wave' in the economics;

After all, the company could have arguably instead produced fewer product, sold what they have already sold for the same price, paid their workers the same amount of money to do less work, they wouldn't have to pay for the destroyed goods, and wouldn't have had to pay for the wasted input materials...

All in the name of profit FOMO.

Assuming there was no /s there:

The US and I assume Europe have laws against "dumping" - selling a product for below cost - because it drives local competitors out of business. That is exactly what shipping containers full of clothes to Africa does.

I think GP was referring to donations, which are not subject to dumping rules AFAIK.

The effect is the same though (well, worse), that was GP's point.

People living in the tropics don't need clothing suited for temperate climates.

People who live in temperate climates wear tshirts, underwear, and socks, if I'm not mistaken.

Then they won't take the donations, problem solved?

The problem is that they do and leave massive piles of winter clothing laying around as garbage.

more market economics framing of life, as if numerous very smart people haven't already tried to make this paradigm work for society, and failed.

The funny thing is that textbook economics has all of the answers about why laissez-faire market economics doesn't work as a foundation for economic policy. It's almost as if it's never been about making good policy and always about doing whatever is best for big businesses and the small number of wealthy people who stand to gain the most from minimizing consumer surplus.

totally. In fact the current monopoly-coddling dispensation is antithetical to market economics, which clearly espouses real competition. It's kinda been coopted and hijacked.

If firms prodice less, prices will be higher.