After decades of lobbying by environmentalists and extensive implementation of voluntary programs, municipal solid waste (MSW) recycling recently received widespread official acceptance. The US Environmental Protection Agency (EPA) has set a national goal that 25% of MSW be recycled. Forty-one states plus the District of Columbia have set recycling goals that range up to 70%. Twenty-nine states require municipalities or counties to enact recycling ordinances or to develop recycling programs. Unfortunately, recycling has proven to be costly, ineffective in solving the MSW problem, and even environmentally harmful in some cases. fundamental rethinking is needed to achieve the goals; without reform, many recycling programs will be closed. The supply of recycled materials has grown much faster than the capacity for converting them into useful products. Prices for materials have fluctuated wildly, making planning difficult. It takes time to develop efficient collection and processing systems, and the policymakers and the public have been patient as the kinks in the systems are worked out. The self-evident wisdom of recycling reassured everyone that all these problems could be solved. However, as these difficulties are being resolved, one is developing a much clearer picture of the economics of recycling. Beneath the debates about markets and infrastructure lurk two fundamental questions: Is it cost effective? Does it actually preserve resources and benefit the environment? The paper attempts to answer these questions and offers alternatives to recycling.