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capitalism-is-a-psychopathy · 2 months ago

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Billionaires destroy more than they create

In a land often championed for its economic opportunity and equality, the American Dream promises that anyone who works hard can rise to prosperity. But for many in today’s middle and lower economic classes, that dream is fading, shadowed by a reality that feels increasingly rigged. At the heart of this issue lies a stark and glaring imbalance: billionaires, a minuscule fraction of the population, wield a staggering concentration of wealth and influence. This is not just an issue of economics but one that touches the foundations of democracy and fairness.

Imagine the economy as a massive machine, built to churn wealth throughout society. In an ideal world, this wealth would cycle effectively, where each part contributes and benefits in turn. But as billionaires amass wealth at unprecedented levels, this machine has come to function more like a funnel, siphoning resources from the broader society and concentrating them at the very top. This dynamic, driven by complex financial structures and tax strategies, isn’t merely an accumulation of personal fortunes but a systematic extraction from the economic potential of others. The capital that could have flowed through wages, education, and public infrastructure is often diverted into private bank accounts and shell companies, rarely benefiting the people who drive and build the economy day by day.

As wealth accumulates at the top, so too does political influence. Billionaires, with vast financial resources, can fund political campaigns, lobbyists, and entire networks of think tanks dedicated to shaping policy. Through these channels, they push for tax policies, regulations, and trade agreements that benefit the ultra-wealthy at the expense of middle- and lower-income families. Politicians, indebted to these donors, increasingly look to billionaire interests rather than to constituents’ needs. This creates a disturbing feedback loop: billionaires influence politics to further policies that reinforce their own wealth and power, leaving the broader populace with dwindling opportunities to influence their own government.

This concentrated power extends far beyond campaign finance and lobbying. With ownership over significant segments of media networks, billionaires control the narratives that millions consume daily. Through these media outlets, they shape public opinion, diverting attention from policies that would challenge wealth accumulation and pushing narratives that frame the ultra-wealthy as essential “job creators” or “innovators” rather than acknowledging their role in widening economic divides. Issues that might threaten their economic stranglehold are often buried, while others, that create division and distract, are amplified.

For the middle and lower classes, this confluence of wealth, media, and political power has a real impact. Stagnant wages, diminishing job security, and rising costs of living aren’t natural outcomes of a complex economy—they’re symptoms of a system shaped to benefit those at the top. Policies that could lift working-class Americans, like raising the minimum wage, universal healthcare, or better labor protections, are often stifled in legislative deadlock, thanks in part to the political influence of the ultra-wealthy who stand to lose from them.

So, as this cycle continues, the gap between billionaires and everyone else widens. The billions accumulated at the top no longer signify mere success but a barrier to mobility for everyone else. The middle and lower classes find themselves carrying the economic burdens, often working harder for less. Meanwhile, billionaires remain insulated, living in a different economic reality, one far removed from the struggles of the average American. This isn’t just an economic imbalance but a distortion of democracy itself, as the machinery of power and influence is pulled further from the reach of ordinary citizens and held more tightly by those whose interests rarely align with theirs.

Without addressing this imbalance, the promise of opportunity, the cornerstone of the American Dream, becomes less attainable with each passing year, not just for the lower and middle classes but for the nation’s future as a whole.

Addressing their manipulation

Billionaires and their advocates often employ a familiar set of narratives to justify their wealth and the structures that enable it. These arguments, framed in terms of the free market, capitalism, or fear of socialism, are not only misleading but often serve to distract from the deeper systemic issues at play. Below is a breakdown of these claims and the counterarguments that expose their flaws:

1. “It’s Just the Free Market at Work”

The myth of the “free market” implies that billionaires achieve their wealth purely through talent, innovation, and competition in a market where everyone has equal opportunity. But in reality, the U.S. economy is far from a genuinely “free” market.

Counterpoints:

• Government Subsidies and Tax Breaks: Many billionaires’ businesses rely heavily on taxpayer-funded subsidies, special tax breaks, and other forms of government assistance. Large corporations frequently lobby for policies that grant them tax advantages, including offshore loopholes and capital gains tax breaks. This creates an environment where they aren’t competing on equal ground but rather with significant state support, distorting the market in their favor.

• Anti-Competitive Practices: Many large corporations, especially in tech and finance, engage in monopolistic behavior, buying out competitors or using aggressive tactics to drive them out of the market. This concentration of power stifles competition, contradicting the notion of a “free” market where anyone can succeed if they work hard.

• Inherited Wealth and Privilege: A significant portion of billionaire wealth is inherited rather than self-made. Generational wealth compounds, giving the ultra-wealthy an enormous head start over those without similar family resources. This challenges the idea that wealth accumulation is simply the product of individual merit or a fair market.

2. “This Is What Capitalism Is Supposed to Look Like”

The argument here suggests that capitalism is an inherently competitive system, where the most successful rise to the top, benefiting everyone through innovation and job creation. This narrative hinges on the idea of “trickle-down economics,” where the wealth of the richest eventually spreads throughout society.

Counterpoints:

• Trickle-Down Economics Doesn’t Work: Decades of evidence show that wealth rarely “trickles down” to the rest of society in any meaningful way. Income inequality has only widened, with wages stagnating for most workers while billionaire wealth has soared. Billionaires tend to reinvest wealth in ways that concentrate their holdings, like in stocks, rather than in ways that benefit the broader economy.

• Wealth Extraction, Not Wealth Creation: Many billionaires achieve and maintain their fortunes through rent-seeking behavior—extracting wealth from existing resources rather than creating new value. Hedge funds, private equity, and real estate empires often profit by cutting costs (like labor) rather than by innovating or producing new goods and services. This dynamic benefits investors but hurts workers and consumers.

• Capitalism Can Take Other Forms: The capitalism practiced in the U.S. today, sometimes called “neoliberal capitalism,” focuses on minimal regulation, tax cuts for the wealthy, and privatization. However, other countries demonstrate that capitalism can function with stronger social safety nets, wealth redistribution policies, and tighter regulations on corporate power. Nordic countries, for example, balance capitalism with robust welfare systems, ensuring a more equitable distribution of wealth and services.

3. “Without Billionaires, There Would Be No Innovation or Job Creation”

A popular myth is that billionaires are essential “job creators” and “innovators” whose wealth ultimately benefits society by funding new businesses and creating employment. This claim positions billionaires as indispensable to economic growth.

Counterpoints:

• Public Funding Fuels Innovation: Many of the biggest technological advances, including the internet, GPS, and medical breakthroughs, were developed with public funding rather than billionaire investments. Government research grants and subsidies often lay the groundwork for major innovations that billionaires later profit from. In other words, society bears much of the financial risk, while billionaires reap the rewards.

• Small Businesses Create Most Jobs: Small businesses, not billionaires or large corporations, are responsible for most job creation in the United States. Big corporations often eliminate jobs through automation, outsourcing, or consolidation. They may employ a large workforce, but they also tend to exploit workers through low wages, precarious employment, and cost-cutting measures.

• Billionaires Accumulate Wealth Through Wealth, Not Innovation: Many billionaires maintain their wealth not by creating jobs or innovating but by using their existing capital to generate more wealth, often through financial instruments that have little to do with actual economic productivity. Stock buybacks, dividends, and passive investments grow their fortunes without necessarily contributing to broader economic prosperity.

4. “Any Alternative Is Socialism or Communism”

When calls arise for higher taxes on the wealthy, stricter regulations, or broader social programs, the response is often to invoke the fear of “socialism” or “communism.” This argument seeks to paint any attempt at wealth redistribution or regulation as a slippery slope toward total government control.

Counterpoints:

• Social Safety Nets and Regulations Are Not Socialism: Social safety nets, progressive taxation, and regulations do not equate to socialism or communism; they’re features of a balanced capitalist system that seeks to prevent extreme inequality and protect public welfare. Countries like Germany, Canada, and Denmark combine regulated capitalism with strong social programs, resulting in healthier economies and greater well-being for citizens without abandoning capitalism.

• Inequality Threatens Capitalism: Growing inequality and economic instability can undermine the foundations of capitalism. A healthy capitalist economy requires a strong middle class with buying power, which excessive wealth concentration undermines. Reforms like progressive taxation, labor protections, and universal healthcare aren’t a rejection of capitalism but rather a means of stabilizing it.

• Historical Success of Mixed Economies: Many of the most successful and prosperous countries practice a mixed economy, where capitalism coexists with social policies that promote equality. The U.S. itself has employed a mixed economy model in the past, particularly after the New Deal, which implemented social safety nets, labor protections, and financial regulations that led to a period of unprecedented growth and prosperity for the middle class.

5. “They Earned It Fair and Square”

Finally, the idea persists that billionaires deserve their wealth because they “earned” it. This argument suggests that any policy aiming to redistribute wealth is fundamentally unfair, penalizing those who worked hard to succeed.

Counterpoints:

• Systemic Advantages and Wealth Hoarding: As previously mentioned, many billionaires begin with advantages—like family wealth or elite educational opportunities—that aren’t available to most people. Additionally, billionaires often employ complex strategies to avoid taxes, lobby for favorable regulations, and capitalize on government subsidies. These factors mean they haven’t earned wealth solely through hard work or merit.

• Billionaires Didn’t Build Alone: No billionaire operates in isolation; they rely on infrastructure, public education, and the work of thousands or millions of employees. A CEO’s wealth is made possible by a web of collective contributions, yet that wealth is rarely shared equitably. While billionaires might be rewarded for their role, their fortune is far from the result of individual effort alone.

In short, these narratives around billionaires often mask a more uncomfortable truth: today’s system is structured in ways that favor the ultra-wealthy at the expense of the broader population. Economic reform, rather than a threat to capitalism, is a necessary step to ensure a more just, equitable society where wealth accumulation doesn’t depend on privilege, influence, or systemic manipulation.

Making a change

Addressing the economic imbalance and the unchecked power of the ultra-wealthy presents a unique challenge, especially given the intense political polarization in the United States. For the middle and lower classes to push back effectively, they will need to build a coalition that transcends party lines and focuses on shared economic interests rather than divisive rhetoric.

1. Build Awareness Through Shared Issues, Not Ideology

The rhetoric around “free markets” and “socialism” often obscures real issues of economic struggle that affect both conservative and progressive working- and middle-class citizens alike. Instead of framing the issue in ideological terms, framing it in terms of tangible, shared grievances can help bridge the divide:

• Focus on Economic Inequality: Income stagnation, unaffordable healthcare, and housing insecurity are felt across the political spectrum. By shifting the narrative from “class warfare” to “economic fairness,” advocates can sidestep partisan language and emphasize the shared experience of economic struggle.

• Highlight the Impact of Corporate Power on Local Communities: Framing issues around how large corporations hurt small, local businesses can resonate strongly with both sides of the political spectrum. This approach often taps into conservative values around community and self-reliance, while also aligning with progressive critiques of corporate overreach.

2. Organize Around Labor Rights and Worker Protections

Historically, unions have been instrumental in improving working conditions and advocating for fair wages, and labor movements transcend political divisions. Many Americans—left, right, and center—share concerns about the erosion of workers’ rights, stagnant wages, and the declining influence of the average worker.

• Expand Union Participation and Labor Movements: Reinvigorating unions and expanding labor protections could give workers a stronger collective voice. New labor movements that focus on economic rights without overtly partisan language could attract support across the political spectrum, particularly when they champion issues like fair wages, workplace safety, and job security.

• Support Worker Cooperatives and Employee-Owned Businesses: Promoting models like worker cooperatives or employee-owned businesses can offer a compelling alternative to the current structure of corporate ownership without resorting to divisive rhetoric. These models prioritize local control and shared economic benefits, appealing to values of self-sufficiency and fairness.

3. Pressure Politicians on Key Economic Policies

A key to bridging the partisan gap is to focus on policies that benefit the broader populace rather than framing them as part of any ideological agenda. The majority of Americans, regardless of political affiliation, support policies like fair taxation, healthcare reform, and increased access to education when framed in terms of fairness and opportunity.

• Promote Tax Reform as “Fairness,” Not Redistribution: Instead of advocating for “redistribution,” proponents can push for tax policies that ensure everyone pays their fair share. Policies like a wealth tax or higher taxes on capital gains can be framed as holding the ultra-wealthy accountable rather than demonizing them, a stance that resonates with people who value fairness and personal responsibility.

• Advocate for Antitrust Legislation: Pushing for stronger antitrust laws to break up monopolies and prevent anti-competitive practices can appeal to both sides. For conservatives, this aligns with the values of market competition; for progressives, it aligns with corporate accountability and consumer protection.

4. Engage in Alternative Media and Independent Journalism

The ultra-wealthy often own or influence major media outlets, which can shape public opinion in ways that protect their interests. For the middle and lower classes to gain a clearer view of economic issues, alternative media sources and independent journalism that aren’t beholden to billionaire interests are crucial.

• Support Independent News Outlets: A growing number of independent news organizations are dedicated to in-depth economic reporting without catering to corporate interests. Supporting these outlets allows individuals to access a range of perspectives that help reveal the true impact of policies on ordinary people.

• Utilize Social Media Responsibly to Build Cross-Party Awareness: Social media, while often a divisive force, can also be used to spread information about economic injustice. When used responsibly to share facts, case studies, and stories of economic hardship, it can cut through the rhetoric and provide people across the political spectrum with a shared understanding of the issues.

5. Prioritize Voting Reform and Campaign Finance Reform

Money in politics is one of the core reasons why economic policies favor the wealthy. Bipartisan support for reducing corporate influence in politics is possible, especially when the focus is on fairness, transparency, and accountability in government.

• Promote Campaign Finance Reform as an Anti-Corruption Effort: Campaign finance reform, which seeks to limit the influence of wealthy donors and corporations on elections, can appeal to conservatives and liberals alike who are frustrated with the influence of money in politics. Instead of framing it as an anti-capitalist measure, framing it as an anti-corruption measure can attract broader support.

• Support Voting Reforms for a More Representative Democracy: Reforms like ranked-choice voting, ending gerrymandering, and preventing voter suppression can help create a political environment that more accurately represents the will of the people rather than special interests. By creating a more representative democracy, policies that reflect the economic needs of the middle and lower classes have a better chance of being enacted.

6. Create Cross-Partisan Grassroots Coalitions Focused on Economic Issues

Many grassroots organizations are focused on economic justice, but they tend to align themselves with one side of the political spectrum, often losing potential support in the process. Building cross-partisan coalitions that emphasize shared economic challenges rather than ideological differences could foster stronger, more united advocacy for middle- and working-class issues.

• Organize Around Issues, Not Parties: Groups like the Poor People’s Campaign, which focuses on poverty and economic justice, have successfully united people across political lines around issues that transcend party loyalty. This approach allows people to focus on their shared struggles, making the movement harder for politicians to ignore.

• Build Community-Level Alliances: Many economic issues are felt acutely at the local level. By focusing on community-level initiatives that address healthcare, affordable housing, and education, people can create practical, on-the-ground solutions that don’t require alignment with national politics. These local successes can serve as models for broader change.

7. Emphasize Civic Education on Economic Policies

Finally, bridging the gap will require education and awareness. Many people accept billionaire-fueled rhetoric because they lack exposure to alternative perspectives. Civic education efforts that focus on teaching economic principles, tax policy, and the influence of corporate power can empower people to understand the real impacts of current policies on their lives.

• Create Accessible Educational Resources: Podcasts, documentaries, workshops, and community discussions can all serve as tools for demystifying economic issues. When people have a clearer understanding of how things like tax policies and wage laws work, they are better equipped to make informed decisions.

• Promote Financial Literacy and Empower Individuals: Financial literacy programs that help individuals understand budgeting, credit, and investments empower people to navigate the economy more effectively. While this doesn’t directly address systemic issues, it gives individuals a greater understanding of the forces shaping their lives and can be a first step toward broader engagement.

By approaching these issues with a focus on shared struggles, fairness, and practical solutions, the middle and lower classes can work together to build a movement that transcends political divides. This movement can challenge the status quo without becoming mired in divisive ideological battles. The real strength of such an effort lies in its ability to unite ordinary people around a common vision for a fairer, more just economic system—one that serves all citizens, not just the wealthiest few.

#capitalism #reality #billionaires #middle class #trickle down economics #facts #economy #economics #wealth #ultra wealthy

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mostlysignssomeportents · 7 months ago

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Surveillance pricing

THIS WEEKEND (June 7–9), I'm in AMHERST, NEW YORK to keynote the 25th Annual Media Ecology Association Convention and accept the Neil Postman Award for Career Achievement in Public Intellectual Activity.

Correction, 7 June 2024: The initial version of this article erroneously described Jeffrey Roper as the founder of ATPCO. He benefited from ATPCO, but did not co-found it. The initial version of this article called ATPCO "an illegal airline price-fixing service"; while ATPCO provides information that the airlines use to set prices, it does not set prices itself, and while the DOJ investigated the company, they did not pursue a judgment declaring the service to be illegal. I regret the error.

Noted anti-capitalist agitator Adam Smith had it right: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

Despite being a raving commie loon, Smith's observation was so undeniably true that regulators, policymakers, and economists couldn't help but acknowledge that it was true. The trustbusting era was defined by this idea: if we let the number of companies in a sector get too small, or if we let one or a few companies get too big, they'll eventually start to rig prices.

What's more, once an industry contracts corporate gigantism, it will become too big to jail, able to outspend and overpower the regulators charged with reining in its cheating. Anyone who believes Smith's self-evident maxim had to accept its conclusion: that companies had to be kept smaller than the state that regulated them. This wasn't about "punishing bigness" – it was the necessary precondition for a functioning market economy.

We kept companies small for the same reason that we limited the height of skyscrapers: not because we opposed height, or failed to appreciate the value of a really good penthouse view – rather, to keep the building from falling over and wrecking all the adjacent buildings and the lives of the people inside them.

Starting in the neoliberal era – Carter, then Reagan – we changed our tune. We liked big business. A business that got big was doing something right. It was perverse to shut down our best companies. Instead, we'd simply ban big companies from rigging prices. This was called the "consumer welfare" theory of antitrust. It was a total failure.

40 years later, nearly every industry is dominated by a handful of companies, and these companies price-gouge us with abandon. Worse, they use their gigantic ripoff winnings to fill war-chests that fund the corruption of democracy, capturing regulators so that they can rip us off even more, while ignoring labor, privacy and environmental law and ducking taxes.

It turns out that keeping gigantic, opaque, complex corporations honest is really hard. They have so many ways to shuffle money around that it's nearly impossible to figure out what they're doing. Digitalization makes things a million times worse, because computers allow businesses to alter their processes so they operate differently for every customer, and even for every interaction.

This is Dieselgate times a billion: VW rigged its cars to detect when they were undergoing emissions testing and switch to a less polluting, more compliant mode. But when they were on the open road, they spewed lethal quantities of toxic gas, killing people by the thousands. Computers don't make corporate leaders more evil, but they let evil corporate leaders execute far more complex and nefarious plans. Digitalization is a corporate moral hazard, making it just too easy and tempting to rig the game.

That's why Toyota, the largest car-maker in the world, just did Dieselgate again, more than a decade later. Digitalization is a temptation no giant company can resist:

https://www.bbc.com/news/articles/c1wwj1p2wdyo

For forty years, pro-monopoly cheerleaders insisted that we could allow companies to grow to unimaginable scale and still prevent cheating. They passed rules banning companies from explicitly forming agreements to rig prices. About ten seconds later, new middlemen popped up offering "information brokerages" that helped companies rig prices without talking to one another.

Take Agri Stats: the country's hyperconcentrated meatpacking industry pays Agri Stats to "consult on prices." They provide Agri Stats with a list of their prices, and then Agri Stats suggests changes based on its analysis. What does that analysis consist of? Comparing the company's prices to its competitors, who are also Agri Stats customers:

https://pluralistic.net/2023/10/04/dont-let-your-meat-loaf/#meaty-beaty-big-and-bouncy

In other words, Agri Stats finds the highest price for each product in the sector, then "advises" all the companies with lower prices to raise their prices to the "competitive" level, creating a one-way ratchet that sends the price of food higher and higher.

More and more sectors have an Agri Stats, and digitalization has made this price-gouging system faster, more efficient, and accessible to sectors with less concentration. Landlords, for example, have tapped into Realpage, a "data broker" that the same thing to your rent that Agri Stats does to meat prices. Realpage requires the landlords who sign up for its service to accept its "recommendations" on minimum rents, ensuring that prices only go up:

https://popular.info/p/feds-raid-corporate-landlord-escalating

Writing for The American Prospect, Luke Goldstein lays out the many ways in which these digital intermediaries have supercharged the business of price-rigging:

https://prospect.org/economy/2024-06-05-three-algorithms-in-a-room/

Goldstein identifies a kind of patient zero for this ripoff epidemic: Jeffrey Roper, a former Alaska Air exec who benefited from a service that helps airlines set prices. ATPCO was investigated by the DOJ in the 1990s, but the enforcers lost their nerve and settled with the company, which agreed to apply some ornamental fig-leafs to its collusion-machine. Even those cosmetic changes were seemingly a bridge too far Roper, who left the US.

But he came back to serve as Realpage's "principal scientist" – the architect of a nationwide scheme to make rental housing vastly more expensive. For Roper, the barrier to low rents was empathy: landlords felt stirrings of shame when they made shelter unaffordable to working people. Roper called these people "idiots" who sentimentality "costs the whole system."

Sticking a rent-gouging computer between landlords and the people whose lives they ruin is a classic "accountability sink," as described in Dan Davies' new book "The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How The World Lost its Mind":

https://profilebooks.com/work/the-unaccountability-machine/

It's a form of "empiricism washing": if computers are working in the abstract realm of pure numbers, they're just moving the objective facts of the quantitative realm into the squishy, imperfect qualitative world. Davies' interview on Trashfuture is excellent:

https://trashfuturepodcast.podbean.com/e/fire-sale-at-the-accountability-store-feat-dan-davies/

To rig prices, an industry has to solve three problems: the problem of coming to an agreement to fix prices (economists call this "the collective action problem"); the problem of coming up with a price; and the problem of actually changing prices from moment to moment. This is the ripoff triangle, and like a triangle, it has many stable configurations.

The more concentrated an industry is, the easier it is to decide to rig prices. But if the industry has the benefit of digitalization, it can swap the flexibility and speed of computers for the low collective action costs from concentration. For example, grocers that switch to e-ink shelf tags can make instantaneous price-changes, meaning that every price change is less consequential – if sales fall off after a price-hike, the company can lower them again at the press of a button. That means they can collude less explicitly but still raise prices:

https://pluralistic.net/2024/03/26/glitchbread/#electronic-shelf-tags

My name for this digital flexibility is "twiddling." Businesses with digital back-ends can alter their "business logic" from second to second, and present different prices, payouts, rankings and other key parts of the deal to every supplier or customer they interact with:

https://pluralistic.net/2023/02/19/twiddler/

Not only does twiddling make it easier to rip off suppliers, workers and customers, it also makes these crimes harder to detect. Twiddling made Dieselgate possible, and it also underpinned "Greyball," Uber's secret strategy of refusing to send cars to pick up transportation regulators who would then be able to see firsthand how many laws the company was violating:

https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html

Twiddling is so easy that it has brought price-fixing to smaller companies and less concentrated sectors, though the biggest companies still commit crimes on a scale that put these bit-players to shame. In The Prospect, David Dayen investigates the "personalized pricing" ripoff that has turned every transaction into a potential crime-scene:

https://prospect.org/economy/2024-06-04-one-person-one-price/

"Personalized pricing" is the idea that everything you buy should be priced based on analysis of commercial surveillance data that predicts the maximum amount you are willing to pay.

Proponents of this idea – like Harvard's Pricing Lab with its "Billion Prices Project" – insist that this isn't a way to rip you off. Instead, it lets companies lower prices for people who have less ability to pay:

https://thebillionpricesproject.com/

This kind of weaponized credulity is totally on-brand for the pro-monopoly revolution. It's the same wishful thinking that led regulators to encourage monopolies while insisting that it would be possible to prevent "bad" monopolies from raising prices. And, as with monopolies, "personalized pricing" leads to an overall increase in prices. In econspeak, it is a "transfer of wealth from consumer to the seller."

"Personalized pricing" is one of those cuddly euphemisms that should make the hair on the back of your neck stand up. A more apt name for this practice is surveillance pricing, because the "personalization" depends on the vast underground empire of nonconsensual data-harvesting, a gnarly hairball of ad-tech companies, data-brokers, and digital devices with built-in surveillance, from smart speakers to cars:

https://pluralistic.net/2024/03/12/market-failure/#car-wars

Much of this surveillance would be impractical, because no one wants their car, printer, speaker, watch, phone, or insulin-pump to spy on them. The flexibility of digital computers means that users always have the technical ability to change how these gadgets work, so they no longer spy on their users. But an explosion of IP law has made this kind of modification illegal:

https://locusmag.com/2020/09/cory-doctorow-ip/

This is why apps are ground zero for surveillance pricing. The web is an open platform, and web-browsers are legal to modify. The majority of web users have installed ad-blockers that interfere with the surveillance that makes surveillance pricing possible:

https://doc.searls.com/2023/11/11/how-is-the-worlds-biggest-boycott-doing/

But apps are a closed platform, and reverse-engineering and modifying an app is a literal felony – several felonies, in fact. An app is just a web-page skinned with enough IP to make it a felony to modify it to protect your consumer, privacy or labor rights:

https://pluralistic.net/2024/05/07/treacherous-computing/#rewilding-the-internet

(Google is leading a charge to turn the web into the kind of enshittifier's paradise that apps represent, blocking the use of privacy plugins and proposing changes to browser architecture that would allow them to felonize modifying a browser without permission:)

https://pluralistic.net/2023/08/02/self-incrimination/#wei-bai-bai

Apps are a twiddler's playground. Not only can they "customize" every interaction you have with them, but they can block you (or researchers seeking to help you) from recording and analyzing the app's activities. Worse: digital transactions are intimate, contained to the palm of your hand. The grocer whose e-ink shelf-tags flicker and reprice their offerings every few seconds can be collectively observed by people who are in the same place and can start a conversation about, say, whether to come back that night a throw a brick through the store's window to express their displeasure. A digital transaction is a lonely thing, atomized and intrinsically shielded from a public response.

That shielding is hugely important. The public hates surveillance pricing. Time and again, through all of American history, there have been massive and consequential revolts against the idea that every price should be different for every buyer. The Interstate Commerce Commission was founded after Grangers rose up against the rail companies' use of "personalized pricing" to gouge farmers.

Companies know this, which is why surveillance pricing happens in secret. Over and over, every day, you are being gouged through surveillance pricing. The sellers you interact with won't tell you about it, so to root out this practice, we have to look at the B2B sales-pitches from the companies that sell twiddling tools.

One of these companies is Plexure, partly owned by McDonald's, which provides the surveillance-pricing back-ends for McD's, Ikea, 7-Eleven, White Castle and others – basically, any time a company gives you a hard-sell to order via its apps rather than its storefronts or its website, you should assume you're getting twiddled, hard.

These companies use the enshittification playbook to trap you into using their apps. First, they offer discounts to customers who order through their apps – then, once the customers are fully committed to shopping via app, they introduce surveillance pricing and start to jack up the prices.

For example, Plexure boasts that it can predict what day a given customer is getting paid on and use that information to raise prices on all the goods the customer shops for on that day, on the assumption that you're willing to pay more when you've got a healthy bank balance.

The surveillance pricing industry represents another reason for everything you use to spy on you – any data your "smart" TV or Nest thermostat or Ring doorbell can steal from you can be readily monetized – just sell it to a surveillance pricing company, which will use it to figure out how to charge you more for everything you buy, from rent to Happy Meals.

But the vast market for surveillance data is also a potential weakness for the industry. Put frankly: the commercial surveillance industry has a lot of enemies. The only thing it has going for it is that so many of these enemies don't know that what's they're really upset about is surveillance.

Some people are upset because they think Facebook made Grampy into a Qanon. Others, because they think Insta gave their kid anorexia. Some think Tiktok is brainwashing millennials into quoting Osama bin Laden. Some are upset because the cops use Google location data to round up Black Lives Matter protesters, or Jan 6 insurrectionists. Some are angry about deepfake porn. Some are angry because Black people are targeted with ads for overpriced loans or colleges:

https://www.theregister.com/2024/06/04/meta_ad_algorithm_discrimination/

And some people are angry because surveillance feeds surveillance pricing. The thing is, whatever else all these people are angry about, they're all angry about surveillance. Are you angry that ad-tech is stealing a 51% share of news revenue? You're actually angry about surveillance. Are you angry that "AI" is being used to automatically reject resumes on racial, age or gender grounds? You're actually angry about surveillance.

There's a very useful analogy here to the history of the ecology movement. As James Boyle has long said, before the term "ecology" came along, there were people who cared about a lot of issues that seemed unconnected. You care about owls, I care about the ozone layer. What's the connection between charismatic nocturnal avians and the gaseous composition of the upper atmosphere? The term ecology took a thousand issues and welded them together into one movement.

That's what's on the horizon for privacy. The US hasn't had a new federal consumer privacy law since 1988, when Congress acted to ban video-store clerks from telling the newspapers what VHS cassettes you were renting:

https://en.wikipedia.org/wiki/Video_Privacy_Protection_Act

We are desperately overdue for a new consumer privacy law, but every time this comes up, the pro-surveillance coalition defeats the effort. but as people who care about conspiratorialism, kids' mental health, spying by foreign adversaries, phishing and fraud, and surveillance pricing all come together, they will be an unbeatable coalition:

https://pluralistic.net/2023/12/06/privacy-first/#but-not-just-privacy

Meanwhile, the US government is actually starting to take on these ripoff artists. The FTC is working to shut down data-brokers:

https://pluralistic.net/2023/08/16/the-second-best-time-is-now/#the-point-of-a-system-is-what-it-does

The FBI is raiding landlords to build a case against Frontpage and other rent price-fixers:

https://popular.info/p/feds-raid-corporate-landlord-escalating

Agri Stats is facing a DoJ lawsuit:

https://www.nationalhogfarmer.com/market-news/agri-stats-loses-motions-to-transfer-dismiss-in-doj-antitrust-case

Not every federal agency has gotten the message, though. Trump's Fed Chairman, Jerome Powell – whom Biden kept on the job – has been hiking interest rates in a bid to reduce our purchasing power by making millions of Americans poorer and/or unemployed. He's doing this to fight inflation, on the theory that inflation is being cause by us being too well-off, and therefore trying to buy more goods than are for sale.

But of course, interest rates are inflationary: when interest rates go up, it gets more expensive to pay your credit card bills, lease your car, and pay a mortgage. And where we see the price of goods shooting up, there's abundant evidence that this is the result of greedflation – companies jacking up their prices and blaming inflation. Interest rate hawks say that greedflation is impossible: if one company raises its prices, its competitors will swoop in and steal their customers with lower prices.

Maybe they would do that – if they didn't have a toolbox full of algorithmic twiddling options and a deep trove of surveillance data that let them all raise prices together:

https://prospect.org/blogs-and-newsletters/tap/2024-06-05-time-for-fed-to-meet-ftc/

Someone needs to read some Adam Smith to Chairman Powell: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/06/05/your-price-named/#privacy-first-again

Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg

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