The True Cost of Products

The price tag on your favorite products is basically a lie. This is what economists call an externality.

When a factory pollutes the air to make your cheap t-shirt, they aren't paying for that environmental

damage, so the cost falls on society while the price stays artificially low.

That is a market failure. It works the other way too. Things like education

benefit everyone, not just the student, but because the market ignores those extra perks,

we don't get enough of it. The government uses taxes and subsidies to force the market

to actually tell the truth about what things cost.