Tracing consequences both seen and unseen.
Christine HarbinAnother Way the Private Sector Can Influence Behavior
Posted at 7:30 pm on April 16, 2010, by Christine Harbin

As component of its Make a Difference campaign, Starbucks gives its customers a 10 cent discount if they use a reusable travel mug. This is another example of how the private sector can encourage certain behaviors without direction from the government, such as environmental stewardship.

Corporate Social Responsibility (CSR) initiatives like Starbucks’s are preferable to government mandates because they respect individual choice. If, for whatever reason, a person does not want to use a reusable mug, he or she can still purchase coffee.

Consumers win because they pay a lower price for the product and also because their choice is unrestricted. Companies like Starbucks win because they can reduce their material and inventory costs. The environment wins because fewer paper cups go to landfills.


Filed under: Economic Theory, Environment, Market Efficiency
Comments: 2 Comments
 

2 Comments »

  1. But is a reusable travel mug better for the environment? I mean, don’t you use water and electricity (hot water) to clean it?

    Comment by billysixstring — April 17, 2010 @ 8:04 am

  2. It’s better than a mostly-recycled paper cup, but I’d hardly say that it’s ‘good’ for the environment.

    But the point is NOT to do good things for the environment. The point is to establish Starbucks as an environmentally conscious (and therefore preferable) brand.

    Comment by David C. Miller — April 17, 2010 @ 3:52 pm

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Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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