We Could Rent Everything and Tax the Rest, and No Government We Have Could Make It Happen

The economic model of the rich world is simple to state. Make a great deal of stuff, sell it, and when it breaks or bores its owner, throw it away and make more. Growth is measured by how much passes through, and the faster it passes, the better the numbers look.

This model is not self-sufficient and everybody knows it. It draws down materials it does not replace, and it leaves behind landfill, carbon and poisoned water that nobody paid for. Thomas Friedman made the point at length in Hot, Flat, and Crowded, and I do not need to repeat the inventory. I want to make a narrower argument: the alternatives are not hard to imagine, and the difficulty is entirely political.

Two Alternatives That Already Exist in Pieces

Rent instead of buy. Take the product for free and pay per month of use. This sounds like a small change in billing. It is a large change in incentives. A manufacturer who sells you a washing machine is paid once and is better off if it dies the day after the warranty. A manufacturer who rents you a washing machine is paid as long as it runs and pays for the repairs himself. Suddenly durability is his profit rather than his loss. He designs for repair, keeps spare parts, takes the machine back at the end and reuses what he can, because every one of those is now money in his pocket instead of yours.

This is not fantasy. Businesses lease aircraft engines and pay by the hour of thrust, and the engines are maintained accordingly. Some cities rent bicycles this way; some firms rent lighting. Wherever it has been tried the product got longer-lived, because the person who decided its lifespan was finally the person who paid for its death.

Sell, but tax the thing heavily. Keep ownership but make the purchase price carry the whole cost of the product's life, including disposal. A cheap disposable item becomes expensive; a durable one that costs more to make becomes competitive. The manufacturer again finds that lasting is profitable, because the tax that makes his disposable version uncompetitive does not touch his durable one.

Either lever, or both, points the same way: make the person who chooses how long a thing lasts into the person who pays if it does not. The rest follows from ordinary self-interest.

Why It Is Not Done

If the alternatives are this clear, and the costs of the present model this well understood, why is the present model still the model?

Because the change is large, and it lands on people who are organised.

Every manufacturer of disposable goods, every retailer whose model is volume, every advertiser whose income depends on you wanting the new one, every logistics firm moving the stuff: all would be worse off in the transition, all know it, and all have a seat at the table where the rules are written. The public that would gain is the public in general, which has no seat, and the gain per person is diffuse and arrives later.

That is the standard configuration in which representative government does not act, and I have described the mechanism elsewhere. A minister who proposed a durability tax would face an organised industry tomorrow and a grateful public never, because the public does not follow the issue and will not connect its lower bills in ten years to a decision made now.

The same holds in transport, in housing, in energy, in food. In each, a model that is plainly wasteful persists, an alternative is plainly available, and the transition would be paid by an organised few and enjoyed by an unorganised many. And in each the government we have does what its structure tells it to do, which is nothing.

What Would Be Different Under a Direct Decision

Put the rental model or the durability tax to a direct vote and the arithmetic changes. The organised few still lobby, but there is nobody to lobby; the decision is made by the people who buy washing machines, and they have every reason to prefer one that lasts. I have argued before that the climate problem has this shape, and the throwaway economy is the same problem seen from the shop floor.

I do not claim the public would get the design right on the first attempt. Rental has failure modes; taxes have evasion. But the public is at least the body whose interest lies in solving it, and under the arrangement we have, no such body holds the pen.