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

We have to bear in mind that all of this would take time to implement, but if we actually manage to calculate all the " hidden costs" a.k.a costs to the environment, What would prevent us from executing this method?

Anonymous

We have to bear in mind that all of this would take time to implement, but if we actually manage to calculate all the " hidden costs" a.k.a costs to the environment, What would prevent us from executing this method?

Anonymous

Once again adbusters tries to formulate a solution and I can't help but shake my head in disbelief. Implementation of such policy -which is based on nothing more than fearmongering and Utopian ideals to begin with- would be a nightmare for all, especially the worlds poor.

Anonymous

Once again adbusters tries to formulate a solution and I can't help but shake my head in disbelief. Implementation of such policy -which is based on nothing more than fearmongering and Utopian ideals to begin with- would be a nightmare for all, especially the worlds poor.

Anonymous

Perhaps we need to think bigger. Implementation of true costs would change the entire notion of rich and poor. Under true cost economics the poor would be forced to revert back to a more feudalistic communal lifestyle and therefore would not need a lot of money for cars, food, school, etc. - it would all be right there. Our current system simply would not incorporate them like it does today.

The biggest problem i see in terms of the "poor" would be our ability to maintain their current level of health care, which seems to be one of the biggest current violations of true cost economics. In its attempt to protects the masses, our heath care system is responsible for such long term detriments on the environment and the overall future of humanity imparted through overpopulation and vaccine impotency. Would true cost economics as stated take things like a weakened immune system into account?

I feel like strict adherence to true cost economics would drastically increase the cost of bearing children, and even an idea like progeny taxation wouldn't be out of the question.

I like true cost economics, but there are so many implications that I feel need to be ironed out.

Anonymous

Perhaps we need to think bigger. Implementation of true costs would change the entire notion of rich and poor. Under true cost economics the poor would be forced to revert back to a more feudalistic communal lifestyle and therefore would not need a lot of money for cars, food, school, etc. - it would all be right there. Our current system simply would not incorporate them like it does today.

The biggest problem i see in terms of the "poor" would be our ability to maintain their current level of health care, which seems to be one of the biggest current violations of true cost economics. In its attempt to protects the masses, our heath care system is responsible for such long term detriments on the environment and the overall future of humanity imparted through overpopulation and vaccine impotency. Would true cost economics as stated take things like a weakened immune system into account?

I feel like strict adherence to true cost economics would drastically increase the cost of bearing children, and even an idea like progeny taxation wouldn't be out of the question.

I like true cost economics, but there are so many implications that I feel need to be ironed out.

Anonymous

There is a large body of study and many organisations that try to calculate the true costs. I don't know about US legislation or practices, but for example, in French law, local authorities have a legal obligation to respond to citizens' rights to trasport at a "financial, economic, social and ecological cost acceptable to the collectivity".
This in turn implies a legal obligation to calculate these costs for divers policy scenarii and choose and implement the "cheapest" scenario. They use standard references for these calculations (which prove for example that the motor car is the most "expensive" form of transport when all these costs are taken into account). This is an ever-closer approximation of the "true" cost.
A "carbon tax" such as already exists in Sweden, has just been implemented in France. I innocently thought was going to bring us closer to this kind of "real" costs in the shops that you refer to and that ecologists have been calling for for years.
I was wrong, it's an unweildy, ill-formulated, unfair and ultimately unjust tax which I fear will have pervesre effects, but it seems that's as far as we're able to go for now. Or is it ?

Anonymous

There is a large body of study and many organisations that try to calculate the true costs. I don't know about US legislation or practices, but for example, in French law, local authorities have a legal obligation to respond to citizens' rights to trasport at a "financial, economic, social and ecological cost acceptable to the collectivity".
This in turn implies a legal obligation to calculate these costs for divers policy scenarii and choose and implement the "cheapest" scenario. They use standard references for these calculations (which prove for example that the motor car is the most "expensive" form of transport when all these costs are taken into account). This is an ever-closer approximation of the "true" cost.
A "carbon tax" such as already exists in Sweden, has just been implemented in France. I innocently thought was going to bring us closer to this kind of "real" costs in the shops that you refer to and that ecologists have been calling for for years.
I was wrong, it's an unweildy, ill-formulated, unfair and ultimately unjust tax which I fear will have pervesre effects, but it seems that's as far as we're able to go for now. Or is it ?

Brandon

I really liked an underlying proposition in this article: namely, that people who demand products should have to address the "true cost" of each of these products. Epic restructuring of our global marketplace to the side... Let's say that we can come up with a loose method for determining these "true costs" today... What if we required retailers/producers to post a product's "true cost" on the product? Similar to the way that the FDA requires food producers to post a product's nutritional value.

This could go a long way in continuing the conversation that could lead to completely restructuring the cost/price structure of the global marketplace. Not to overlook the immediate benefit of giving well-intentioned people the resources to make wise consumer decisions immediately.

Brandon

I really liked an underlying proposition in this article: namely, that people who demand products should have to address the "true cost" of each of these products. Epic restructuring of our global marketplace to the side... Let's say that we can come up with a loose method for determining these "true costs" today... What if we required retailers/producers to post a product's "true cost" on the product? Similar to the way that the FDA requires food producers to post a product's nutritional value.

This could go a long way in continuing the conversation that could lead to completely restructuring the cost/price structure of the global marketplace. Not to overlook the immediate benefit of giving well-intentioned people the resources to make wise consumer decisions immediately.

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