True pricing as a key prerequisite of sustainability

In an era marked by accelerating climate change, dwindling biodiversity, compelled migrations, profound poverty, and deepening economic inequities, I suggest a framework which could offer a solution to systemic market failures that harm both human well-being and the environment.

Building on the Brundtland definition of sustainable development—meeting the needs of the present without compromising future generations—I propose true pricing as a practical framework to address these challenges. True pricing ensures that all producers’ needs are met while markets work to alleviate human suffering and enhance environmental sustainability.

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Rudolf Steiner (1861-1925) described a true price as one that allows a producer to meet all personal and dependent needs until the next product cycle is completed.​ Drawing inspiration from this concept, I argue that untrue pricing—when prices fail to reflect the needs of producers—creates a cascade of inequity, poverty, environmental degradation, and economic instability. True pricing seeks to reverse this by fully accounting for producers’ needs in the pricing of products, costs, assets, and liabilities.

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A new framework for sustainability

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• True pricing is a necessary foundation of sustainability, allowing producers to sustain their livelihoods and productive activities.

• Combining true pricing with accounting provides a universally actionable framework to align economic practices with sustainability.

• True pricing is an objective tool that provides guidance to economic partners: producers, consumers, investors, policymakers, and sustainability practitioners alike.

• This work outlines accounting-based indicators for implementation that help assess and implement true pricing with clarity and objectivity.

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Four actionable indicators

True pricing rests on the idea that any business must generate sufficient operating income to meet both the productive requirements and the household needs of its manager(s) during the next production cycle. This forward-looking perspective is crucial for sustainable economic activity. Four inter-dependent indicators must be consistently reached at and met over time to ensure economic viability and sustainability:

1. Revenue Independence – Can the business sustain itself without speculative or artificial income?

2. Full Cost Coverage – Does its pricing account for all necessary costs, including labor, capital renewal, and sustainability?

3. Asset Retention and Reinvestment—Is the business maintaining its productive base, or is it consuming itself to survive?

4. Debt Sustainability – Can the business service its debt from operating income, or is it in a cycle of borrowing for survival?

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The accompanying diagram visualizes how these indicators manifest in standard accounting structures. The central accounts of a producer (income statement left, balance sheet right) mirror those of their economic partners, illustrating their interdependence. The red arrow represents the achievement of sufficient operating income -- the hallmark of true pricing. The four black numbered arrows correspond to the indicators above, showing the necessary adjustments in each accounting area.

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This framework transforms true pricing from an abstract concept into concrete, measurable indicators that businesses can actively monitor and manage. When these indicators are not met, it triggers a cascade of unsustainable practices, as detailed in the doctoral research.