My lovely wife and I are expecting our first child in early August, and one way I’m preparing for fatherhood is by volunteering in the preschool ministry at church. It has been challenging but delightful, so far, and I’ve learned a lot in just a few short weeks (mostly about how much I still don’t know). It has also been an interesting exercise in “looking out the window” in accordance with Ronald Coase’s famous admonition. Yesterday’s adventures reading storybooks and dispensing saltines to one-year-olds got me thinking about three e’s: epidemics, externalities, and evolution.

As I understand it, illness spreads like wildfire among groups of small kids. We take a lot of precautions (hand sanitizer for everything, each child’s belongings carefully labeled), but this can only be so effective. Contagious illness may create a negative externality through direct transmission, but a more subtle problem might exist when we consider the fact that as bacteria and viruses are passed from host to host, they mutate and become progressively more resilient. The fact that one kid might make everyone else sick is only half the story; even once everyone gets better, there is likely a newer, ever-so-slightly-more-powerful bug floating around.

Trying to match kids with their individual reusable sippy cups brought this into high relief. Spill-proof sippy cups are definitely drops in the prosperity pool, but failure to match kids with cups or failure to properly sterilize the cups may transmit germs. That got me to thinking about the role of disposables. On one hand, disposables are held up as an example of avarice and waste, and to the extent that some of the costs of using disposables can be socialized, an externality may exist (though I hasten to add, following Walter Block, that this is not a “market failure” but rather a failure by the state to adequately specify and enforce private property rights). At the same time, disposables might reduce disease transmission and, therefore, slow down the rate at which bacteria and viruses evolve.*

The negative externalities from production can be resolved by clarifying property rights; if anything, disposables could produce positive externalities.* Has anyone examined this rigorously? Comments are open if someone can provide a link. I got to thinking about this in part because of an article in Friday’s Wall Street Journal about furor in China over disposable chopsticks.

*-Notes below the fold.

*A colleague who read the first draft of this made two points. First, someone failing to wash a reusable mug between uses might infect himself/herself repeatedly. Second, if there are positive externalities from use of disposables, the “optimal” policy according to the textbook models would be to subsidize use of disposables.