Post AidKGbNSour8Mrd2fo by pluralistic@mamot.fr
(DIR) More posts by pluralistic@mamot.fr
(DIR) Post #AidKGIR1FTPVcO974q by pluralistic@mamot.fr
2024-06-05T21:25:20Z
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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."--If you'd like an essay-formatted version of this thread 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-again1/
(DIR) Post #AidKGJxJasq2KqGQ3U by Radical_EgoCom@mastodon.social
2024-06-05T23:55:58Z
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@pluralistic Adam Smith was not anti-capitalist. He is widely regarded as one of the founding figures of modern capitalism despite his views on capitalism differing from contemporary interpretations.
(DIR) Post #AidKGL0BhgjLa2cEAi by pluralistic@mamot.fr
2024-06-05T21:25:49Z
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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.2/
(DIR) Post #AidKGN2O8Tg9tRf0sa by pluralistic@mamot.fr
2024-06-05T21:25:57Z
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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. 3/
(DIR) Post #AidKGPybD1Ql0YuWtE by pluralistic@mamot.fr
2024-06-05T21:26:56Z
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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.4/
(DIR) Post #AidKGSKITJyWIR4szI by pluralistic@mamot.fr
2024-06-05T21:27:06Z
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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.5/
(DIR) Post #AidKGVKlI385ckJnd2 by pluralistic@mamot.fr
2024-06-05T21:27:27Z
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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.6/
(DIR) Post #AidKGXWt7w1AQw0Vo8 by pluralistic@mamot.fr
2024-06-05T21:27:35Z
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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.7/
(DIR) Post #AidKGZVtkaPkaRYkXg by pluralistic@mamot.fr
2024-06-05T21:27:46Z
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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. 8/
(DIR) Post #AidKGbNSour8Mrd2fo by pluralistic@mamot.fr
2024-06-05T21:27:54Z
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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/c1wwj1p2wdyo9/
(DIR) Post #AidKGdR5AQwGkfKxai by pluralistic@mamot.fr
2024-06-05T21:28:01Z
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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.10/
(DIR) Post #AidKGgsqLfvZRdLfmK by pluralistic@mamot.fr
2024-06-05T21:28:07Z
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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-bouncy11/
(DIR) Post #AidKGjPAyQylGUUWS8 by pluralistic@mamot.fr
2024-06-05T21:28:29Z
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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. 12/
(DIR) Post #AidKGlPFX8E5TIXbqS by pluralistic@mamot.fr
2024-06-05T21:28:48Z
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Landlords 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-escalatingWriting 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/13/
(DIR) Post #AidKGnoqYvtExGX51M by pluralistic@mamot.fr
2024-06-05T21:28:56Z
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Goldstein identifies a kind of patient zero for this ripoff epidemic: Jeffrey Roper, a former Alaska Air exec who quit to found an illegal airline price-fixing service called ATPCO. 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.14/
(DIR) Post #AidKGpqh12YTFZPaAy by pluralistic@mamot.fr
2024-06-05T21:29:05Z
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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." 15/
(DIR) Post #AidKGrf4HERcs5zKKm by pluralistic@mamot.fr
2024-06-05T21:29:14Z
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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/16/
(DIR) Post #AidKGuBksfmOi3ISYq by pluralistic@mamot.fr
2024-06-05T21:29:23Z
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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/17/
(DIR) Post #AidKGwF1FVZx4kq5vU by pluralistic@mamot.fr
2024-06-05T21:29:29Z
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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. 18/
(DIR) Post #AidKGyho5RnKicK74i by pluralistic@mamot.fr
2024-06-05T21:29:50Z
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The more concentrated an industry is, the easier it is 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 price of a button.19/
(DIR) Post #AidKH2EAzYTBdsUVRg by pluralistic@mamot.fr
2024-06-05T21:29:58Z
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That means they can collude less explicitly but still raise prices:https://pluralistic.net/2024/03/26/glitchbread/#electronic-shelf-tagsMy name for this digital flexibility "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/20/
(DIR) Post #AidKHCNlEm4v8V3Im0 by pluralistic@mamot.fr
2024-06-05T21:30:09Z
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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.html21/
(DIR) Post #AidKHFJcKdXwEW8XEO by pluralistic@mamot.fr
2024-06-05T21:30:19Z
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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*, @ddayen 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/22/
(DIR) Post #AidKHIcW2pRiU00AbY by pluralistic@mamot.fr
2024-06-05T21:30:27Z
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"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/23/
(DIR) Post #AidKHKpLq4txKO1RtA by pluralistic@mamot.fr
2024-06-05T21:30:34Z
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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."24/
(DIR) Post #AidKHNQeANvHOdUGIa by pluralistic@mamot.fr
2024-06-05T21:30:42Z
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"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-wars25/
(DIR) Post #AidKHQwJ781yHhK5Z2 by pluralistic@mamot.fr
2024-06-05T21:30:51Z
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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/26/
(DIR) Post #AidKHV4FlWlP5V4UVM by pluralistic@mamot.fr
2024-06-05T21:31:05Z
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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. 27/
(DIR) Post #AidKHYi4DxOSNqipTk by pluralistic@mamot.fr
2024-06-05T21:31:14Z
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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-bai28/
(DIR) Post #AidKHbiB40GRh3nSZE by pluralistic@mamot.fr
2024-06-05T21:31:35Z
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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. 29/
(DIR) Post #AidKHeP93Dp42tunom by pluralistic@mamot.fr
2024-06-05T21:33:02Z
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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.30/
(DIR) Post #AidKHhS5iixhUuJhKK by pluralistic@mamot.fr
2024-06-05T21:34:03Z
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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.31/
(DIR) Post #AidKHkQme2hMjijCCm by pluralistic@mamot.fr
2024-06-05T21:34:21Z
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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.32/
(DIR) Post #AidKHnAaSiWdEMAnsO by pluralistic@mamot.fr
2024-06-05T21:34:28Z
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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. 33/
(DIR) Post #AidKHqBPG7xmZla04O by pluralistic@mamot.fr
2024-06-05T21:34:41Z
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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. 34/
(DIR) Post #AidKHt92FOqhlHUeI4 by pluralistic@mamot.fr
2024-06-05T21:34:54Z
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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.35/
(DIR) Post #AidKHvtY1RF8I7Gp4C by pluralistic@mamot.fr
2024-06-05T21:35:04Z
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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.36/
(DIR) Post #AidKHyhbaITMzwhpMu by pluralistic@mamot.fr
2024-06-05T21:35:18Z
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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. 37/
(DIR) Post #AidKI1vBcG7Qyw5DSC by pluralistic@mamot.fr
2024-06-05T21:36:07Z
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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, on 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/38/
(DIR) Post #AidKI4iXDkmVeZBeeO by pluralistic@mamot.fr
2024-06-05T21:36:18Z
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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.39/
(DIR) Post #AidKI8LdioqOuiVQWG by pluralistic@mamot.fr
2024-06-05T21:36:27Z
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There's a very useful analogy here to the history of the ecology movement. As @thepublicdomain 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*.40/
(DIR) Post #AidKIB9LIzn3bRm9Gi by pluralistic@mamot.fr
2024-06-05T21:36:36Z
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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_Act41/
(DIR) Post #AidKIEDLuXmR6kftR2 by pluralistic@mamot.fr
2024-06-05T21:36:48Z
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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-privacy42/
(DIR) Post #AidKII1RkkdKuz8RQu by pluralistic@mamot.fr
2024-06-05T21:36:56Z
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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-doesThe FBI is raiding landlords to build a case against Frontpage and other rent price-fixers:https://popular.info/p/feds-raid-corporate-landlord-escalatingAgri Stats is facing a DoJ lawsuit:https://www.nationalhogfarmer.com/market-news/agri-stats-loses-motions-to-transfer-dismiss-in-doj-antitrust-case43/
(DIR) Post #AidKIKvAyWOruPDyZk by pluralistic@mamot.fr
2024-06-05T21:37:09Z
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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.44/
(DIR) Post #AidKINzXYkfpQoI0IK by pluralistic@mamot.fr
2024-06-05T21:37:22Z
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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. 45/
(DIR) Post #AidKIRaAD2keZGRnIO by pluralistic@mamot.fr
2024-06-05T21:37:30Z
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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/46/
(DIR) Post #AidKIUB6YfUOcPkK9Y by pluralistic@mamot.fr
2024-06-05T21:37:39Z
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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."47/
(DIR) Post #AidKIX7JdDEzjWzqAC by pluralistic@mamot.fr
2024-06-05T21:37:46Z
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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:https://media-ecology.org/convention48/
(DIR) Post #AidKIZzGxZacdSFxXk by pluralistic@mamot.fr
2024-06-05T21:37:52Z
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Image:Cryteria (modified)https://commons.wikimedia.org/wiki/File:HAL9000.svgCC BY 3.0https://creativecommons.org/licenses/by/3.0/deed.eneof/
(DIR) Post #AidLBlroUcupPH5K0e by noisenerd@mastodon.social
2024-06-06T00:06:22Z
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@Radical_EgoCom Considering that the next paragraph describes Smith as a "raving commie loon," and taking that in the context of @pluralistic 's other writing, I'm guessing this is intended as a joke.
(DIR) Post #AidMPX9G74kHlYN4oC by MikeImBack@disabled.social
2024-06-06T00:20:02Z
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@Radical_EgoCom @pluralistic The Wealth Of Nations guy? Ya I always knew him as pretty much the inventor of Capitalism