Battling an Military of Price-Setters
This article seems within the October 2026 subject of The American Prospect journal. If you’d wish to obtain our subsequent subject in your mailbox, please subscribe here.
When inflation spiked shortly after the COVID disaster, neoliberal economists kicked into excessive gear. Their mission was to defend firms for all value hikes. The cause why costs have been spiking, claimed the adherents to the dismal science, owed to demand—rents ostensibly spiked as a result of growing demand for house workplaces—or respectable price will increase, or actually any trigger apart from the companies truly setting costs larger.
The mainstream media dutifully followed suit. Never thoughts that company earnings have been hovering, or that corporations have been utilizing new methods to personalize costs and even turning over their pricing choices to third-party consultants making use of synthetic intelligence. Prices have been merely the work of the invisible hand of the market, not executives wanting to make use of the alternatives introduced by the inflationary surroundings to smuggle in larger earnings.
Whenever a heterodox economist took a dissenting view from the dominant explanations for inflation, together with your ebook reviewer, they have been ostracized. We noticed this most clearly with Isabella Weber, whose modest suggestion of value controls was mocked as being “actually silly” by none apart from Paul Krugman. (Ironically, it was Krugman who peddled the foolish home-office principle of upper rents and ignored, for instance, the usage of a typical pricing algorithm by rival landlords.)
Into this debate stepped Lindsay Owens, a Stanford-educated sociologist, Capitol Hill veteran, and the creator of Gouged: The End of a Fair Price—and What That Means for Your Wallet. She broke by way of the economists’ bluster, first with a viral tweet on price-gouging in 2022, which become a New York Times essay. The essay did one thing that few economists or political analysts bothered with: It listened to the precise earnings calls the place executives laid out their plans to ramp up costs as a lot as they might. There wasn’t an invisible hand in any case, however actual folks telling on themselves to their traders.
The solely beneficiaries of customized pricing are the companies engaged within the predation.
Three years later, Owens went viral once more with a white paper about Instacart’s temporary dalliance with customized pricing. The examine, performed by the group she runs, Groundwork Collaborative, together with Consumer Reports and More Perfect Union, confirmed that roughly 75 p.c of the gadgets in equivalent Instacart baskets bought on the similar time diverse in value from one shopper to the following. Owens’s critique of Instacart’s pricing was so stinging that she managed to spur an investigation by Trump’s in any other case sleepy Federal Trade Commission. Instacart ultimately relented, disavowing the surveillance expertise through which it had invested hundreds of thousands to rob prospects blind.
Now Owens has put all the things she’s realized over the previous a number of years collectively in a ebook detailing how pricing is distorted, manipulated, and seized upon by profit-hungry firms. The ebook is partly a revolt in opposition to economists, and deservedly so: As she writes, “I’m positive you will discover loads of economists and CEOs who will let you know that there’s nothing to see right here.”
In a seemingly fixed audition for company funding, many (if not most) economists bend over backwards to defend customized pricing, typically by citing literature associated to third-degree value discrimination, equivalent to pupil or senior reductions. The drawback is that customized pricing is a type of first-degree value discrimination, and the advantages from third-degree value discrimination don’t carry over. If we allow an organization to cost price-insensitive prospects extra for a similar product, the argument goes, the corporate may scale back the value for price-delicate prospects, allowing for an enlargement of output. Owens says, archly: “If that seems like bullshit to you, you’re not alone.” What Owens doesn’t say—once more, as a result of she’s not attempting to persuade conflicted economists—is that as long as the corporate can cost the price-sensitive sorts one penny under their willingness to pay below a personalized-pricing regime, no shopper advantages from the alternate.
Consumer surplus, one measure ostensibly guiding neoliberal financial considering, is actually zero when the value is ready at every shopper’s willingness to pay. Price-insensitive sorts see their shopper surplus get drained, whereas the price-sensitive sorts understand no enchancment from the established order. The solely beneficiaries of customized pricing, subsequently, are the companies engaged within the predation. And the notion, once more peddled by sure economists, that we will take these newfound earnings and redistribute them to the losers is hopelessly naïve.
Owens additionally acknowledges a basic fact that’s rejected by the financial orthodoxy: that consolidation facilitates coordinated value hikes. “Competition is kryptonite for gougers,” she explains within the introduction. “So step one is to wipe out the competitors. And that’s precisely what occurred.” Industrial group economists have made a profession of defending consolidation and railing in opposition to anybody who thinks that larger markups could be modeled as a perform of focus. They’ve even invented names like “superstars” to mirror companies that take over industries by way of purportedly superior acumen—and simply occur to not share any of the spoils with their staff.
Gouged is a quick learn and makes its persuasive case in simply 176 pages. As somebody who has made a profession out of investigating companies engaged in price-fixing and different schemes to separate shoppers (or staff) from what’s rightly theirs, I assumed the contents can be acquainted territory. But Owens uncovered tales and particulars that have been amazingly recent and highly effective, even for this insider.
In Chapter 1, titled “Profiting Off You: High-Tech Pricing Consultants—Part Geek Squad, Part Seal Team Six—Killed the Price Tag,” we find out about Hermann Simon, a German professor and co-founder of Simon-Kucher & Partners (SKP). With a workers of 60 Ph.D.s, together with physicists, SKP suggested corporations on pricing throughout almost each main trade. And not like advertising and marketing companies, which revered conflicts of curiosity, SKP suggested purported rivals, like Coke and Pepsi, on set their costs. SKP legitimized a science of pricing (price-fixing, actually) with a mission: “forming a rising tutorial transport systems to assist corporations optimize costs upward.”
RealPage, which permits landlords to repair costs on leases by turning over their pricing authority to a typical algorithm, is a key villain in Gouged. But the ebook reveals that RealPage is simply the most recent iteration of conspiracies which have emptied shoppers’ wallets for many years. In the late Nineteen Eighties, U.S. airways used the Airline Tariff Publishing Company (ATPCO) to sign their future pricing intentions to rivals. ATPCO was used to ship “trial balloons” to an airline’s rival, which have been accompanied by “footnote designators” specifying the route, fare class, and the phrases of the proposed hike. The Department of Justice estimated the ATPCO scheme price shoppers almost $2 billion between 1988 and 1992.
But after investigating ATPCO, the DOJ opted to settle the case with some minor modifications to decelerate the speed of ticket value adjustments. Not solely did this not work, but it surely led on to newer high-tech improvements. In truth, Jeffrey Roper, a former Alaska Airlines govt and principal goal within the ATPCO investigation—his laptop was seized at one level—was RealPage’s “principal scientist” at launch.
Using comparable although extra refined methods, RealPage’s algorithm, known as YieldStar, was programmed by no means to advocate a hire under the minimal hire it recommended, successfully making a “arduous flooring” for hire costs. Owens explains the function of RealPage’s “pricing advisers,” who served as enforcers of the cartel; if a proposed hire hike was rejected, the pricing adviser escalated the matter to the owner’s regional supervisor. Stephen Winn, RealPage’s CEO, wasn’t glad with merely lifting rents through a typical algorithm; he additionally cajoled landlords to “monetize lobbies, parking garages, rooftops, and even broom closets,” and to impose upkeep charges when tenants request repairs.
Uber is one other key villain in Gouged. Per Owens, Uber’s “best innovation wasn’t ‘disrupting’ the taxi trade—it was socializing and normalizing the very thought of dynamic pricing. They made us snug with the notion that costs may change at any second.” By now, most of us are accustomed to Uber’s efforts to customise your fare based mostly on (amongst different issues) the place you’re getting picked up, the place you’re heading, and, allegedly, your remaining battery life. What was much less understood, a minimum of for this reviewer, is the way in which Uber has applied customized pricing on the labor facet of the equation—that’s, utilizing employee information to personalize wages.
In 2022, Uber rolled out a system of “upfront pricing,” which permitted it to boost fares whereas chopping driver pay. Owens critiques the analysis of Columbia’s Len Sherman, who discovered that after the introduction of upfront pricing, one Uber driver’s “take price”—the share of the fare captured by the corporate—elevated from 32 to 42 p.c by the tip of 2024. Similar analysis by Oxford economists discovered that Uber’s take price within the U.Okay. jumped from 25 to 29 p.c after the introduction of upfront pricing. Discrimination is nice for the entity doing the discriminating.
A chapter on how corporations spy on you was particularly disturbing. Did you already know that house insurers use aerial drones to check your rooftop? If the situations sign neglect, they may cancel your protection earlier than an accident. Did you already know that carmakers are reporting your driving tendencies to 3rd events, who “analyze, bundle, and resell it to insurance coverage corporations to hike your premiums or cancel your coverage altogether”? Did you already know that the McDonald’s app tracks its prospects’ “spending habits, go to frequency, and even the time of month after they’re most definitely to have disposable earnings”? McDonald’s can then regulate costs; if the app detects you visiting after payday, Owens explains, it would supply fewer reductions throughout that interval. Did you already know that Starbucks offered a Washington Post reporter’s information to greater than 60 third events? We be taught that the app adjusted his rewards and reductions downward the more cash he spent, presumably a sign that his willingness to pay was larger than initially thought.
Gouged is especially useful for lawmakers searching for methods to constrain the onslaught of anti-competitive pricing techniques. To bolster our defenses, the ebook suggests a modern-day “Shoppers’ Bill of Rights.” In explicit, Owens requires guidelines that may compel sellers to indicate the complete, all-in value up entrance; make it simpler to cancel a subscription; give consumers the fitting to restore something they purchase; ban algorithmic price-fixing; curb dynamic pricing by permitting just for one value change per day; ban surveillance pricing by reinstituting the value tag; ban algorithmic wage discrimination and assure a good wage; and guarantee AI chatbots work for the person, not the AI firm or retailer.
The quicker we will convert these concepts into laws, the quicker we will reclaim a way of equity in our financial system—with or with out the assist of neoliberal economists. As our religion in free-market capitalism collapses within the face of widening inequality and anti-competitive schemes to empty our wallets, is it any marvel why democratic socialists are gaining traction?
This article seems in Oct 2026 Issue.
