This part appears in the October 2026 issue of The American Prospect magazine. If you’d akin to obtain our next matter in your mailbox, please subscribe here.
When cost increase spiked shortly following the COVID crisis, neoliberal economists kicked into elevated gear. Their goal was to defend corporations for all cost hikes. The logic why prices were spiking, claimed the adherents to the dismal science, due to demand—rents ostensibly spiked because of growing demand for residence offices—or lawful disbursal increases, or really any logic another than the firms really environment prices higher.
The mainstream media dutifully followed suit. Never intellect that company profits were soaring, or that companies were using new techniques to personalize prices and equal turning complete their pricing decisions to third-party consultants making use of synthetic intelligence. Prices were merely the activity of the invisible hand of the market, not executives wanting to use the opportunities presented by the inflationary surroundings to smuggle in higher profits.
Whenever a heterodox economist took a dissenting perspective from the foremost explanations for inflation, including your publish reviewer, they were ostracized. We saw this most plainly alongside Isabella Weber, whose humble recommendation of cost controls was mocked as being “truly stupid” by none another than Paul Krugman. (Ironically, it was Krugman who peddled the silly home-office theory of higher rents and ignored, for example, the use of a average pricing algorithm by competitor landlords.)
Into this conversation stepped Lindsay Owens, a Stanford-educated sociologist, Capitol Hill veteran, and the author of Gouged: The End of a Fair Price—and What That Means for Your Wallet. She bankrupt through the economists’ bluster, archetypal alongside a viral tweet on price-gouging in 2022, which turned into a New York Times essay. The composition did item that few economists or governmental analysts bothered with: It listened to the genuine earnings calls anywhere executives laid out their plans to ramp up prices as much as they could. There wasn’t an invisible hand following all, but genuine group telling on themselves to their investors.
The lone beneficiaries of personalized pricing are the firms busy in the predation.
Three years later, Owens went viral again alongside a white paper concerning Instacart’s concise dalliance alongside personalized pricing. The study, conducted by the institution she runs, Groundwork Collaborative, alongside alongside Consumer Reports and More Perfect Union, showed that approximately 75 percent of the items in identical Instacart baskets purchased at the identical period varied in cost from one shopper to the next. Owens’s critique of Instacart’s pricing was so stinging that she managed to spur an inquiry by Trump’s alternatively sleepy Federal Trade Commission. Instacart eventually relented, disavowing the surveillance innovation in which it had invested millions to rob customers blind.
Now Owens has put everything she’s learned complete the former multiple years together in a publish detailing how pricing is distorted, manipulated, and seized upon by profit-hungry corporations. The publish is partially a revolt against economists, and deservedly so: As she writes, “I’m certain you can discover plentifulness of economists and CEOs who volition inform you that there’s nothing to see here.”
In a apparently changeless audition for company funding, many (if not most) economists curve complete backwards to defend personalized pricing, frequently by citing writings connected to third-degree cost discrimination, specified as pupil or elder discounts. The issue is that personalized pricing is a form of first-degree cost discrimination, and the benefits from third-degree cost bias do not transport over. If we authorize a business to accusation price-insensitive customers additional for the identical product, the disagreement goes, the business can additionally decrease the cost for price-sensitive customers, permitting for an enlargement of output. Owens says, archly: “If that appears akin bullshit to you, you’re not alone.” What Owens doesn’t say—again, since she’s not trying to convince conflicted economists—is that so lengthy as the business can accusation the price-sensitive types one penny below their willingness to pay under a personalized-pricing regime, no person benefits from the exchange.
Consumer surplus, one measure ostensibly directing neoliberal financial thinking, is exactly zero whenever the cost is set at all consumer’s willingness to pay. Price-insensitive types see their person surplus get drained, during the price-sensitive types acknowledge no betterment from the position quo. The lone beneficiaries of personalized pricing, therefore, are the firms busy in the predation. And the notion, again peddled by certain economists, that we can obtain these newfound profits and redistribute them to the losers is hopelessly naïve.
Owens additionally recognizes a essential fact that is rejected by the financial orthodoxy: that consolidation facilitates coordinated cost hikes. “Competition is kryptonite for gougers,” she explains in the introduction. “So the archetypal stage is to rub out the competition. And that’s exactly what happened.” Industrial institution economists have made a occupation of defending consolidation and railing against anyone who thinks that higher markups can be modeled as a function of concentration. They’ve equal invented names akin “superstars” to indicate firms that obtain complete industries through purportedly better acumen—and fair happen to not portion any of the spoils alongside their workers.
Gouged is a accelerated peruse and makes its persuasive case in fair 176 pages. As person who has made a occupation out of examining firms busy in price-fixing and another schemes to distinct consumers (or workers) from what is rightly theirs, I presumed the contents would be acquainted territory. But Owens uncovered stories and particulars that were amazingly caller and powerful, equal 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 study concerning Hermann Simon, a German prof and co-founder of Simon-Kucher & Partners (SKP). With a personnel of 60 Ph.D.s, including physicists, SKP advised companies on pricing throughout nearly all important industry. And dissimilar promotion firms, which respected conflicts of interest, SKP advised purported rivals, akin Coke and Pepsi, on how to set their prices. SKP legitimized a discipline of pricing (price-fixing, really) alongside a mission: “forming a expanding scholarly infrastructure to assistance companies optimize prices upward.”
RealPage, which allows landlords to fix prices on rentals by turning complete their pricing authority to a average algorithm, is a key villain in Gouged. But the publish shows that RealPage is fair the latest repeat of conspiracies that have emptied consumers’ wallets for decades. In the delayed 1980s, U.S. airlines used the Airline Tariff Publishing Company (ATPCO) to indication their forthcoming pricing intentions to rivals. ATPCO was used to dispatch “trial balloons” to an airline’s rival, which were accompanied by “footnote designators” specifying the route, diet class, and the conditions of the projected hike. The Department of Justice estimated the ATPCO scheme disbursal consumers nearly $2 milliard between 1988 and 1992.
But following examining ATPCO, the DOJ opted to resolve the case alongside several insignificant modifications to dilatory downward the charge of ticket cost changes. Not lone did this not work, but it led immediately to additional latest high-tech innovations. In fact, Jeffrey Roper, a erstwhile Alaska Airlines administrator and chief mark in the ATPCO investigation—his device was seized at one point—was RealPage’s “principal scientist” at launch.
Using akin although additional advanced techniques, RealPage’s algorithm, called YieldStar, was programmed never to propose a rent below the minimum rent it suggested, efficiently creating a “hard floor” for rent prices. Owens explains the function of RealPage’s “pricing advisers,” who served as enforcers of the cartel; if a projected rent hike was rejected, the pricing adviser escalated the matter to the landlord’s local manager. Stephen Winn, RealPage’s CEO, wasn’t satisfied alongside merely lifting rents via a average algorithm; he additionally cajoled landlords to “monetize lobbies, parking garages, rooftops, and equal broom closets,” and to enforce care fees whenever tenants petition repairs.
Uber is another key villain in Gouged. Per Owens, Uber’s “greatest innovation wasn’t ‘disrupting’ the taxi industry—it was socializing and normalizing the extremely idea of energetic pricing. They made us comfortable alongside the notion that prices could alter at any moment.” By now, most of us are acquainted alongside Uber’s efforts to customize your diet according to (among another things) anywhere you are getting picked up, anywhere you are heading, and, allegedly, your remaining power division life. What was small understood, at smallest for this reviewer, is the way Uber has implemented personalized pricing on the labor flank of the equation—that is, using employee data to personalize wages.
In 2022, Uber rolled out a scheme of “upfront pricing,” which permitted it to lift fares during cutting controller pay. Owens reviews the investigation of Columbia’s Len Sherman, who established that following the introduction of upfront pricing, one Uber driver’s “take rate”—the percent of the diet captured by the company—increased from 32 to 42 percent by the end of 2024. Similar investigation by Oxford economists established that Uber’s obtain charge in the U.K. jumped from 25 to 29 percent following the introduction of upfront pricing. Discrimination is awesome for the being doing the discriminating.
A division on how companies spy on you was particularly disturbing. Did you cognize that residence insurers use airborne drones to study your rooftop? If the conditions indication neglect, they power cancel your safety before an accident. Did you cognize that carmakers are reporting your driving tendencies to third parties, who “analyze, bundle, and resell it to coverage companies to hike your premiums or cancel your guideline altogether”? Did you cognize that the McDonald’s app tracks its customers’ “spending habits, sojourn frequency, and equal the period of duration whenever they’re most apt to have available income”? McDonald’s can afterward modify prices; if the app detects you visiting following payday, Owens explains, it power recommendation small discounts during that period. Did you cognize that Starbucks sold a Washington Post reporter’s data to additional than 60 third parties? We study that the app adjusted his rewards and discounts downward the additional prosperity he spent, presumably an sign that his willingness to pay was higher than initially thought.
Gouged is particularly helpful for lawmakers looking for ways to constrain the attack of anti-competitive pricing tactics. To bolster our defenses, the publish suggests a modern-day “Shoppers’ Bill of Rights.” In particular, Owens calls for rules that would compel sellers to display the full, all-in cost up front; create it easier to cancel a subscription; provision shoppers the correct to repair item they buy; ban algorithmic price-fixing; curb energetic pricing by allowing lone for one cost alter per day; ban surveillance pricing by reinstituting the cost tag; ban algorithmic pay bias and justify a fair wage; and justify AI chatbots activity for the user, not the AI business or retailer.
The faster we can change these ideas into legislation, the faster we can reclaim a awareness of fairness in our economy—with or without the assistance of neoliberal economists. As our belief in free-market capitalism collapses in the visage of widening inequality and anti-competitive schemes to bare our wallets, is it any amazement why delegate socialists are gaining traction?
This part appears in Oct 2026 Issue.
