Many years ago I took a trip out to Great Falls National Park. On the Maryland side there is an observation platform a little bit up river from the falls. There the water is much calmer and on this particular day it moved like a sheet. Along the banks, in the eddies and around debris in the river, I noticed foamy slime and mistook it for some sort of bacteria or scum. Next to me there happened to be a geologist who corrected me:
“No” he said, “those are suds”.
He then described, in brief because after all it is quite simple, how laundry and dish detergent goes right down the drain and gets dumped out with all the other waste water. Car washes – residential and commercial – pour soapy water down the drains and often into storm drains which take it untreated directly to the river.
What many of these detergents have in them, in varying concentrations, is phosphate. Phosphates act as a limiting nutrient in water bodies. What this means is that the amount of aquatic vegetation that grows in a pond, lake, river, or estuary is directly related to how much phosphorous it gets. If you add a little more phosphate to the system you get a lot more growth. this is why most lawn and garden fertilizers are high in phosphate.
Now, you might think that phosphate, as a fertilizer, is a good thing. Just as Carbon Dioxide is necessary for plant life you might think excesses of it in the atmosphere are a good thing. You’d be quite wrong on both accounts. Excess phosphate fertilizer in aquatic systems causes excessive vegetation growth that puts it way outside of the natural equilibrium the environment has attained. This excess vegetation then dies off rapidly and the chemical processes of the subsequent decay take dissolved oxygen out of the water. This essentially suffocates everything else. This phenomenon is called eutrophication and it is the single greatest threat to the Chesapeake Bay as well as an area in the Gulf of Mexico at the mouth of the Mississippi River known as The Dead Zone.
The encounter with the geologist did a lot for me. It reinforced the understanding that the environmental system of which we are all a part is so out-of-sight for many people that the consequences simply never figure into daily life. There is this external cost that is never accounted for in markets. Because of this externality people do not get the chance to put their money where their collective mouths are. The cost of the damage is not incurred by manufacturers so consumers don’t actually pay for it – because they don’t pay for it they can’t stop paying for it. So in this, and in many environmental cases, the free market fails.
That is why governments create policy and pass legislation like the Clean Water Act (1973). However, in this case the effectiveness of the CWA was neutered. Successful lobbying by the industry prevented the CWA from including phosphate restrictions in detergents, so the continual dumping from nearly every household continued. After a few decades many states started banning phosphates in laundry soap, but the lobbying continued to keep it in dish soap.
Now, I may be a cynic, but corporations only make voluntary changes like this for a few reasons. Often it is a settlement from some lawsuit. Or, as may be likely in this case, they actually caved to pressure from market competition. With the advent of highly marketed and highly eco-friendly products in the last decade it has become increasingly difficult to deny the effectiveness of phosphate-free dish soap. With this much healthier alternative in the marketplace with competitive numbers, the industry couldn’t help but take notice.
I know what you’re thinking – the free market DID work. Well, of course it did. In the long run. On a long enough time line there is no market externality. Everything bears out in a free market just like environmental systems always find an equilibrium. What is at the heart of the issue is the devastation that takes place in the process. In this case it just took 40 years for a polluting industry to change a practice that should have been regulated long long long ago. 40 years of phosphate pollution into lakes and estuaries because the industry lobbied a lie to help their profit margins.
So in the end, phosphates are removed from dish soap anyway.
What was gained? Well, corporations were able to protect their bottom line – until market share was taken away. Uh oh, better act now!
What was lost? Untold numbers of fish, crabs, lobster and clean water from 40 years worth of contributing eutrophication when proper regulation would have had profound effect. Yeah, the free market sure works.




