Who doesn’t like free? Free transport, a free consultation, a free service or good: the promise is attractive. In a context where purchasing power is a legitimate concern for the French, it even seems to make common sense. However, economics teaches us a less intuitive reality: free things have a price. Behind what seems to cost nothing at the moment there is almost always an invoice, paid differently, later or by someone else.
This is not a question of calling into question political or commercial choices that have been made, but simply of allowing everyone to become aware of a simple but little-known thing: free access is often illusory and can end up being expensive.
Hidden and transferred costs
The economy has long been based on a simple principle: a good or service has a clearly identified price. The consumer knows what he is paying and can compare offers. In the composition of a price, we find the costs of raw materials, production, transportation, etc.
This logic has been profoundly transformed: consumerism certainly pushes for lower prices (positive for customers but not necessarily for workers), but the digital revolution has led to a further leap towards “everything free”. Paradoxically, digital (costly in investments) offers “free” consumption and multiplies the tools for price comparison or group purchases.
But it adds opacity to the understanding of product prices, it hides environmental and social impacts, it pays less for work and much more for data and advertising. We have entered into an economy of hidden and transferred costs.
A powerful lever of attractiveness
Public authorities, businesses and economic players quickly understood that the word “free” constituted a powerful lever of attractiveness. The individual is naturally attracted to what appears to cost nothing. Economists also speak of a “zero price effect”: when the price falls to zero, demand increases disproportionately, even addictively. “Free” profoundly modifies our decisions, to the point of making us forget any rational analysis of costs and benefits.
However, costs never disappear, they shift. Producing a good or providing a service requires work, resources, investments, infrastructure and skills. If the user does not pay the price directly, the cost remains. It is then financed by taxes, by debt, by other consumers, by ourselves, by a progressive degradation of the good or service…
Thus, social networks, search engines or many mobile applications are accessible free of charge. But their business model is based on the collection and monetization of information provided by users. Attention becomes a commodity, data an economic asset. What the user does not pay in euros, he pays in advertising exposure, in time or in loss of control of his digital life.
Economic actors also offer “free” or very low-cost services by choice or because they are required to do so. The drop in the price displayed results in a deterioration in the level of support. The cost is then paid in the form of wasted time, additional steps, or a reduced ability to resolve complex situations and it is the quality of service that is affected.
Negative externalities
Finally, free shipping or free returns in e-commerce make transportation seem worthless. They encourage multiple orders, impulse purchases and mass returns, with very real consequences, such as more trips, additional carbon emissions, excess packaging and sometimes the destruction of returned products whose resale would cost more than their replacement. The cost then becomes environmental.
Economists then speak of negative externalities. There are others, such as loss of proximity. When a company compensates for the free provision of certain services by concentrating its activity or closing points of sale, it is the territorial presence that declines. Consumers sometimes earn a few euros on a service, but lose a local advisor, a business in their city center. What disappears does not appear on any invoice, but has a lasting impact on the quality of life and the cohesion of territories.
So the question is not whether something is free. It is to determine who actually pays, when and in what form. Because in an economy of hidden costs, the price has not disappeared, it has simply become less visible: time, data, environment, proximity, quality of service. What we no longer pay at the “checkout”, we always pay differently. The next time someone tells you that a product or service is free, ask yourself what the hidden costs are, what is the price to pay? And finally, who pays the bill?
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