Lindsay Owens's new book Gouged lays out how companies use surveillance data and algorithms to set a different price for every customer and every worker — and the reviewer's complaint is that it diagnoses the disease far better than it treats it.
The same coffee can cost you and the person at the next table different amounts. That is not the shop pricing badly. There is a system watching you: your spending history, your credit card debt, your address, all bought up in bulk and fed to an algorithm that works out the most you are likely to pay.
A price is not printed, it is computed
The author, Lindsay Owens, runs the Groundwork Collaborative, which has done some of the key research on this kind of surveillance pricing.
Take the nurses. They pick up shifts through an app, and that app colludes with data brokers to find out how much they owe on their credit cards. Then it offers the lowest pay to the most desperate — because it knows they cannot say no.
Owens helped coin the phrase the age of recoupment: crush your competitors with predatory prices, and once you are the only game in town, put the prices up.
From a fair price to whatever the market will bear
In America it was the Quakers who led the way in replacing haggling with a price tag, set at cost plus a reasonable percentage.
Then a group of economists spent a generation dismantling that fair price and replacing it with a market price — whatever the market would bear. They waited decades for the technology to catch up, and now every price can change for every customer, every time.
Remember that a wage is a price too. It is what you are paid for the irreplaceable hours of the only life you get. The same people committed to charging you as much as possible are committed to paying you as little as possible.
Clear diagnosis, weak prescription
The first part of the book is very clear: who is scamming you, how, and why they get away with it.
The last chapter, on what to do about it, tells you to talk to your friends, take basic privacy precautions, and spend your money at businesses that avoid these tricks. None of that is wrong. It is just disappointing from someone with a track record of devising policy that actually bites.
The problem was never that bad people are greedy. It is a system designed to reward greed.
Why it matters
The most dangerous thing about surveillance pricing is that you never notice it. You assume this is simply the price. And once the price depends on how broke and how trapped you are, fair exchange is already over.
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