Waste: Why Economics Got Is So Wrong, and What Could Be the Remedy?

Abstract

A paradigm shift occurred in economics in the middle of the 20 th century. According to the old paradigm, economics studies the determinants of wealth. The new paradigm, called neoclassical economics, posits that economics studies behaviour under scarcity of resources. A corollary of the new view is that people and organisations can be assumed to make optimal, best possible, decisions regarding the scarce resources.The old paradigm of economics recognized waste as a factor influencing wealth. The new paradigm, focusing on optimal allocation of resources, did not apply the notion of waste. The Nobel laureate economist Stigler went in 1976 even further and claimed that waste is not a useful concept in economic theory, though he admitted the occurrence of waste, which he narrowly defined as a foregone product that can be obtained for less than its cost.The 1976 paper of Stigler is critically assessed. Three major shortcomings are found. First, waste is ubiquitous in economic activities, whereas Stigler downplayed its significance. Second, waste can occur irrespective of the context, whereas Stigler insisted that waste occurs in the context of market exchange. Third, decision usually needs to be implemented in the material world, and waste often emerges in this implementation. Stigler considered decisions without taking implementation into account.To rectify the shortcomings in the economic conception of behaviour under scarcity, a new conception is offered. It is based on the recognition of three different types of waste in relation to a decision: background waste, non-optimality of the decision, and foreground waste. There should be an attempt to reduce or to eliminate all three types of waste. The new conception implies that the starting point of neoclassical economics has been seriously wrong.

Método para implementação do trabalho padronizado como elemento adicional do planejamento e controle baseado em localização

“…Perdas como making-do, trabalho em progresso (work in progress -WIP) e falta de terminalidade têm sido apresentadas como os principais tipos de perdas no contexto da construção civil (Koskela, 2004;Bashford et al, 2003;Fireman;Formoso;Isatto, 2013). Segundo Formoso, Bolviken e Viana (2020), tais perdas estão fortemente relacionadas ao conceito de lote de produção, o qual se refere à realização dos processos em cada unidade de produção (ou controle).…”

Results of the Causes and Impacts of Making-Do Wastes in Production in Fortaleza, Ceará, Brazil

“…According to Koskela (2004), making-do waste occurs when a job site activity is started without having all the necessary prerequisites, or when its execution continues even if one or more prerequisites are no longer available. Ronen (1992) called this set of prerequisites a complete kit and states that there are two consequences, technical and behavioral.…”

“…Ronen (1992) called this set of prerequisites a complete kit and states that there are two consequences, technical and behavioral. In addition to these consequences, Koskela (2004) added the safety waste caused by making-do; this safety waste is the result of abnormal manufacturing conditions.…”

“…The wastes were classified according to the steps and sub-steps following the NBR 12721 presets (ABNT, 2005). The impacts were classified according to the adopted parameters of reduced productivity, lack of motivation, loss of material, rework, reduced safety, reduced quality, and lack of finishing (RONEN, 1992;KOSKELA, 2004;.…”

“…Thus, several theories arise or evolve in this context. However, it is known that an important increment for lean construction was the designation by Koskela (2004) of a new category of wastes called making-do, added to the widely known and applied list of Ohno (1988) and Shingo (1989).…”