20 Mar 2014Working Paper Summaries

Waste, Recycling and Entrepreneurship in Central and Northern Europe, 1870-1940

by Geoffrey Jones and Andrew Spadafora

The efficient and appropriate collection and disposal of solid waste has been recognized as essential to the hygiene and health of urban societies since the nineteenth century. Over the course of the first half of the twentieth century, sanitary engineers and the broader public also came to understand that the inappropriate treatment of waste could cause major environmental degradation, while recycling could contribute significantly to environmental sustainability. A key question for this industry, therefore, has been whether such social value could be combined with the pursuit of profitable opportunities. In this paper the authors focus on the late nineteenth century through the 1940s, a crucial period for the emergence of firms concerned with waste disposal in industrialized central and northern Europe. The authors show that German, Danish, and other European entrepreneurs built substantial businesses which aimed to achieve "shared value" by making positive social and environmental contributions to their societies. Some of these entrepreneurs had strikingly modern views of environmental challenges and they prefigured many later twentieth-century recycling processes. At the same time, the profit motive encouraged technological innovation, a major ideal of capitalist enterprise, and left a legacy of scientific and engineering knowledge of waste materials and their processing and utilization which benefited later recyclers. Although post-1970 non-profit community recycling centers, municipal collection programs, and recycling divisions of waste management companies provide the terminology and the ideology behind modern recycling, they owe their technological and organizational foundations to an earlier generation of profit-seeking engineers, scientists, and entrepreneurs. Key concepts include:

Industrialization and the birth of consumer societies in the nineteenth century encouraged authors the emergence of firms concerned with waste disposal. This paper examines entrepreneurs in this industry in central and northern Europe from the late nineteenth century to the 1940s.
These entrepreneurs sometimes had strikingly modern views of environmental challenges and the need to overcome them. They initiated processes for sorting and recycling waste materials that are still employed today.
They were driven by a desire to keep city and countryside healthy and unpolluted, and to avoid the gratuitous waste of resources.
In an era of municipalization, these entrepreneurs demonstrated the potential for fruitful interactions between business and city government.
Their companies show the challenges of achieving profitability in large-scale recycling. The problems of many of these businesses may help to explain why private waste companies have been associated with late and reluctant entry into recycling activities, often trailing municipal governments and non-profit entities in the late twentieth century.

Author Abstract

This working paper examines the role of entrepreneurs in the municipal solid waste industry in industrialized central and northern Europe from the late nineteenth century to the 1940s. It explores the emergence of numerous German, Danish, and other European entrepreneurial firms explicitly devoted to making a profitable business out of conserving and returning valuable resources to productive use, while maintaining public sanitation and in many cases offering nascent environmental protections. These ventures were qualitatively different from both earlier smaller private waste traders, and the later garbage agglomerates, and have been neglected in an era that historians have treated as a period of municipalization. These entrepreneurs sometimes had strikingly modern views of environmental challenges and the need to overcome them. They initiated processes for sorting and recycling waste materials that are still employed today. Yet it proved difficult to combine making profits and achieving social value in accordance with the "shared value" model of today. As providers of public goods such as health and sanitation and a cleaner environment, the entrepreneurs were often unable to capture sufficient profits to sustain businesses. Recycled-goods markets were volatile. There was also a tension between the constant waste stream on the collection side and a seasonal/cyclical demand for recycled products. The frequent failure of these businesses helps to explain why in more recent decades private waste companies have been associated with late entry into recycling, often trailing municipal governments and non-profit entities.