ABSTRACT
Principle 7 states that The free market is not free. It argues that, at present, our economic system allows firms to externalize costs (to society) that are then not included in the prices that are charged (to customers). The problem, therefore, is not that the price mechanism does not work, but that all relevant costs are not currently included in the prices that are charged. And if prices are distorted, the resulting economic exchange will be distorted – producers benefit from lower costs, while consumers benefit from lower prices, and the rest of us pick up the tab. Not only does this create an artificial market for existing products and services, it creates artificial barriers to entry for more competitive alternatives. The solution lies in lifecycle pricing, where all related costs of production and consumption are incorporated into the final prices charged.
