Thought Control in Economics

A New Kind of Global Marketplace

What if we were to implement this one simple idea: true cost?

What is the real cost of shipping a container load of toys from Hong Kong to Los Angeles? Or a case of apples grown in New Zealand to markets in North America? And what is the true cost of that fridge humming in your kitchen, that car purring on the road or that steak sizzling on the grill? Practically every one of the products we buy in the global marketplace is undervalued because the environmental costs haven’t been taken into account. As a result, every one of the billions of purchases we make every day pushes the world a little deeper into the cosmic red.

But what if we were to implement this simple idea: true cost?

We calculate the hidden costs associated with products – what the economists nonchalantly refer to as “externalities” – and incorporate them. We force the price of every product in the global marketplace to tell the ecological truth.

We start with the little things: plastic bags, coffee cups, paper napkins. Economists calculate these eco costs – say it’s five cents per plastic bag, ten cents per cup and one cent per napkin – then we just tack that on. We’re already doing that with the various eco-fees and eco-taxes included in the price of tires, cans of paint and other products. But now we abandon the concept of ancillary fees and taxes and implement straight true-cost pricing.

Inevitably, your palate will submit to your wallet.

Then, over a ten-year period, we phase in true-cost eating. We raise the price of avocados from Mexico and shrimp from China to reflect the true cost of transporting them long distances. And we estimate and add on all the hidden costs of our industrial farming and food processing systems. That burger at McDonald’s will cost you more, so will most meats, produce and processed foods. You can eat whatever you want, but you’ll have to pay the true cost. Inevitably, your palate will submit to your wallet. Processed, mega-farmed and imported foods become more expensive as the cost of organic and locally produced food goes down. Bit by bit, purchase by purchase, the global food system heaves toward sustainability.

Then we phase in the true cost of driving. We add on the environmental cost of the carbon our cars emit, the cost of building and maintaining roads, the medical costs of accidents, the noise and the aesthetic degradation caused by urban sprawl and maybe even the military cost of protecting those crucial oil fields and oil tanker supply lines. Your private automobile will cost you around $100,000 and a tank of gas $250. You’re still free to drive all you want, but instead of passing the costs on to future generations, you pay upfront. This would force us to reinvent the way we get around. Demand for monorails, bullet trains, subways and streetcars would surge. We would demand more bike lanes and pedestrian paths and car-free urban centers. And gradually a paradigm shift in urban planning would transform urban life.

True-cost pricing is fraught with daunting, seemingly insurmountable problems. For conventional economists, it’s a frightening concept that would slow growth, reduce the flow of world trade and curb consumption. It would force us to rethink just about every economic axiom we’ve taken for granted since the dawn of the industrial age. It could turn out to be one of the most traumatic economic/social/cultural projects that humanity has ever undertaken. And yet … and yet … the idea of a global marketplace in which the price of every product tells the ecological truth has a simple, almost magical ring to it. It makes sense, it feels right, and it’s totally nonpolitical. It’s the one big idea that – if we are able to agree on it, implement it and muster the collective self-discipline to sustain it – could pull us out of the ecological tailspin we’re in and nudge this failing experiment of ours on Planet Earth back onto the rails.

— Kalle Lasn

71 comments on the article “A New Kind of Global Marketplace”

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Anonymous

This was well written. But how do we measure ecological cost across species and across generations, in terms of dollars (i.e. my grandchildren will be unlikely to have anything with energy density/transportability of oil, so whatever the 'transport and ecological cost' of oil currently might be - say '$500 per barrel', would be far too low on a long term time scale. A

Anonymous

This was well written. But how do we measure ecological cost across species and across generations, in terms of dollars (i.e. my grandchildren will be unlikely to have anything with energy density/transportability of oil, so whatever the 'transport and ecological cost' of oil currently might be - say '$500 per barrel', would be far too low on a long term time scale. A

Anonymous

100k cars...250 a tank gas. You realise this cause poeple to keep their old cars, and use veggie oil instead, both of which are actually worse (more emissions, cropland being used for fuel). Demand for mono rails would surge? How would all of this demand be met in a timely manner? I dont like the current system anymore than you do, but your solutions cause more problems than they solve.

Anonymous

100k cars...250 a tank gas. You realise this cause poeple to keep their old cars, and use veggie oil instead, both of which are actually worse (more emissions, cropland being used for fuel). Demand for mono rails would surge? How would all of this demand be met in a timely manner? I dont like the current system anymore than you do, but your solutions cause more problems than they solve.

Anonymous

Any attempt to honestly and holistically evaluate the cost of products and services available on the global market place will be fraught with difficulties. Such an evaluation demands more subtle and sophisticated analysis, consideration for the long term and dealing with the many complexities that entails. However the hard work and risks involved in pursuing an alternative must be accepted and dealt with. They are necessary aspects in a process of entire change that will simply be impressed upon us more drastically if we choose to wait around for a convenient option. You could take the reins and try engineer a softer landing, but look around you pal, it is not going to be a smooth transition. --- Preparing

Anonymous

Any attempt to honestly and holistically evaluate the cost of products and services available on the global market place will be fraught with difficulties. Such an evaluation demands more subtle and sophisticated analysis, consideration for the long term and dealing with the many complexities that entails. However the hard work and risks involved in pursuing an alternative must be accepted and dealt with. They are necessary aspects in a process of entire change that will simply be impressed upon us more drastically if we choose to wait around for a convenient option. You could take the reins and try engineer a softer landing, but look around you pal, it is not going to be a smooth transition. --- Preparing

Anonymous

The flaw in this thinking is that for some reasons things "cost" less than they should. Clearly the problem is in how the word "cost" is defined. The writer refers to food and manufactured articles and that we are not paying the "true cost". Since, presumably, all manufacturers and retailers are in business to make a profit, and profit is the the amount of money left over after costs (raw materials, labor, transportation, etc) are subtracted, we are actually paying more than the "true cost", not less. The author refers to the intangible "cost" to the environment in terms of "carbon credits" and claims cars will cost $100K without any supporting documentation. $100K paid to who? Will manufacturing costs be that much? Or will the car cost $20K and we pay an additional $80K to the government (directly or indirectly) in the form of taxes on the car? Taxes and environmental surcharges are not the cost, they only add to the amount paid. Who determines how much a cubic meter of 78% nitrogen/21% oxygen/1% other naturally occurring gases (including green house gases such as methane and carbon dioxide) is worth? If a price is arbitrarily assigned by a government agency, is that actually its "true cost" or just a value assigned. How much is a gallon of dihydrogen monoxide (water) worth and who decides? All communities charge for it (again presumably to cover the cost of providing it) but the rate varies wildly from place to place. Things "cost" what it takes to produce them or get them to where they are going. Things are valued by their abundance or scarcity. Things are priced to cover the cost of both. Things are taxed to provide government control and revenue.

Anonymous

The flaw in this thinking is that for some reasons things "cost" less than they should. Clearly the problem is in how the word "cost" is defined. The writer refers to food and manufactured articles and that we are not paying the "true cost". Since, presumably, all manufacturers and retailers are in business to make a profit, and profit is the the amount of money left over after costs (raw materials, labor, transportation, etc) are subtracted, we are actually paying more than the "true cost", not less. The author refers to the intangible "cost" to the environment in terms of "carbon credits" and claims cars will cost $100K without any supporting documentation. $100K paid to who? Will manufacturing costs be that much? Or will the car cost $20K and we pay an additional $80K to the government (directly or indirectly) in the form of taxes on the car? Taxes and environmental surcharges are not the cost, they only add to the amount paid. Who determines how much a cubic meter of 78% nitrogen/21% oxygen/1% other naturally occurring gases (including green house gases such as methane and carbon dioxide) is worth? If a price is arbitrarily assigned by a government agency, is that actually its "true cost" or just a value assigned. How much is a gallon of dihydrogen monoxide (water) worth and who decides? All communities charge for it (again presumably to cover the cost of providing it) but the rate varies wildly from place to place. Things "cost" what it takes to produce them or get them to where they are going. Things are valued by their abundance or scarcity. Things are priced to cover the cost of both. Things are taxed to provide government control and revenue.

Anonymous

How is stating that things cost less than they should a flaw? They do! Say you buy a plastic cup from China, you are paying lower wages for starters, not to mention that the oil that ships it to where ever in the world you are cost whatever exonn says it dose in relation to there profit margins and production costs. I could follow with many other examples in this chain, but I'm sure you can get my drift. There are many factors which determine the cost of a commodity, however what i believe this article is suggesting is that the ecological cost in terms of waste and damages etc. are included into the cost of production. I think this is fair enough. I'm not suggesting this model is the only option either, but unlike anything you have spouted, it is an idea. The idea to think about the environmental impact of a classical economic structure, is not only a good one, but totally necessary if we want to continue to live on this planet. In case you failed to realise. We need good ideas to get people thinking and we actually need to change things. Simply refuting others ideas isn't worth energy you used to do it. Anonymous, Try having something to say before you engage in important dialogues. Thinblackline.

Anonymous

How is stating that things cost less than they should a flaw? They do! Say you buy a plastic cup from China, you are paying lower wages for starters, not to mention that the oil that ships it to where ever in the world you are cost whatever exonn says it dose in relation to there profit margins and production costs. I could follow with many other examples in this chain, but I'm sure you can get my drift. There are many factors which determine the cost of a commodity, however what i believe this article is suggesting is that the ecological cost in terms of waste and damages etc. are included into the cost of production. I think this is fair enough. I'm not suggesting this model is the only option either, but unlike anything you have spouted, it is an idea. The idea to think about the environmental impact of a classical economic structure, is not only a good one, but totally necessary if we want to continue to live on this planet. In case you failed to realise. We need good ideas to get people thinking and we actually need to change things. Simply refuting others ideas isn't worth energy you used to do it. Anonymous, Try having something to say before you engage in important dialogues. Thinblackline.

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