Free of charge

Free of charge, at no charge, at no cost, complimentary, gratis, and the like are phrases or terms used to indicate that a thing for which a monetary cost is normally assessed is being provided without any payment being required.

Such expressions are commonly used in commerce and public administration to indicate that no payment is required from the immediate recipient. However, the adage that there is "no such thing as a free lunch" reflects the economic principle that resources used to provide a good or service must ultimately be supplied by someone. Even where the recipient pays nothing directly, circumstances may result in a cost being imposed on the recipient at some future point.

Economics

Economists have long distinguished between goods and services provided free of charge and those financed directly by their users. In Outlines of Economics (1923), Richard T. Ely and his coauthors argued that whether a public service should be provided gratuitously depends upon factors including its social benefit, the fairness of financing it through taxation, whether free provision would encourage wasteful consumption, and its broader economic effects.

Governments often provide services that are technically free of charge to the specific recipient. As Ely explained, "we have a large and heterogeneous group of industries which are maintained principally for service for their educational and developmental influence not primarily for regulation and not at all for profit but for the public good", including "not only schools and educational institutions of all kinds but roads and canals the savings banks and public pawn shops maintained in several countries of continental Europe workingmen's insurance and model manufacturing establishments such as France maintains for the production of tapestries and fine porcelains". Ely describes obtaining revenue from these activities as "almost a negligible consideration", providing a framework for determining whether these services should be provided free of charge based on their net social effect and on how broadly they are used, noting that "if only a small portion of the community enjoys the service it would usually be unjust to charge less than cost because the deficit would be borne by general taxation falling upon the entire community unless indeed the benefit to one restricted class is seen to be of advantage to the whole community". Ely concludes:

Assuming that the service benefits the whole community this is still not sufficient to justify a charge less than the cost of production.