This article appears in the October 2026 issue of The American Prospect magazine. If you’d like to receive our next issue in your mailbox, please subscribe here.
When inflation spiked shortly after the COVID crisis, neoliberal economists kicked into high gear. Their mission was to defend corporations for all price hikes. The reason why prices were spiking, claimed the adherents to the dismal science, owed to demand—rents ostensibly spiked due to growing demand for home offices—or legitimate cost increases, or really any cause other than the firms actually setting prices higher.
Gouged: The End of a Fair Price—and What That Means for Your Wallet
By Lindsay Owens
Viking
The mainstream media dutifully followed suit. Never mind that corporate profits were soaring, or that companies were using new techniques to personalize prices and even turning over their pricing decisions to third-party consultants making use of artificial intelligence. Prices were simply the work of the invisible hand of the market, not executives wanting to use the opportunities presented by the inflationary environment to smuggle in higher profits.
Whenever a heterodox economist took a dissenting view from the dominant explanations for inflation, including your book reviewer, they were ostracized. We saw this most clearly with Isabella Weber, whose modest suggestion of price controls was mocked as being “truly stupid” by none other 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 common pricing algorithm by rival landlords.)
Into this debate 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 broke through the economists’ bluster, first with a viral tweet on price-gouging in 2022, which turned into a New York Times essay. The essay did something that few economists or political analysts bothered with: It listened to the actual earnings calls where executives laid out their plans to ramp up prices as much as they could. There wasn’t an invisible hand after all, but real people telling on themselves to their investors.
The only beneficiaries of personalized pricing are the firms engaged in the predation.
Three years later, Owens went viral again with a white paper about Instacart’s brief dalliance with personalized pricing. The study, conducted by the organization she runs, Groundwork Collaborative, along with Consumer Reports and More Perfect Union, showed that roughly 75 percent of the items in identical Instacart baskets purchased at the same time varied in price from one shopper to the next. Owens’s critique of Instacart’s pricing was so stinging that she managed to spur an investigation by Trump’s otherwise sleepy Federal Trade Commission. Instacart eventually relented, disavowing the surveillance technology in which it had invested millions to rob customers blind.
Now Owens has put everything she’s learned over the past several years together in a book detailing how pricing is distorted, manipulated, and seized upon by profit-hungry corporations. The book is partly a revolt against economists, and deservedly so: As she writes, “I’m sure you can find plenty of economists and CEOs who will tell you that there’s nothing to see here.”
In a seemingly constant audition for corporate funding, many (if not most) economists bend over backwards to defend personalized pricing, often by citing literature related to third-degree price discrimination, such as student or senior discounts. The problem is that personalized pricing is a form of first-degree price discrimination, and the benefits from third-degree price discrimination do not carry over. If we permit a company to charge price-insensitive customers more for the same product, the argument goes, the company can also reduce the price for price-sensitive customers, permitting for an expansion of output. Owens says, archly: “If that sounds like bullshit to you, you’re not alone.” What Owens doesn’t say—again, because she’s not trying to convince conflicted economists—is that so long as the company can charge the price-sensitive types one penny below their willingness to pay under a personalized-pricing regime, no consumer benefits from the exchange.
Consumer surplus, one measure ostensibly guiding neoliberal economic thinking, is literally zero when the price is set at each consumer’s willingness to pay. Price-insensitive types see their consumer surplus get drained, while the price-sensitive types realize no improvement from the status quo. The only beneficiaries of personalized pricing, therefore, are the firms engaged in the predation. And the notion, again peddled by certain economists, that we can take these newfound profits and redistribute them to the losers is hopelessly naïve.
Owens also recognizes a fundamental truth that is rejected by the economic orthodoxy: that consolidation facilitates coordinated price hikes. “Competition is kryptonite for gougers,” she explains in the introduction. “So the first step is to wipe out the competition. And that’s exactly what happened.” Industrial organization economists have made a career of defending consolidation and railing against anyone who thinks that higher markups can be modeled as a function of concentration. They’ve even invented names like “superstars” to reflect firms that take over industries through purportedly superior acumen—and just happen to not share any of the spoils with their workers.
Gouged is a fast read and makes its persuasive case in just 176 pages. As someone who has made a career out of investigating firms engaged in price-fixing and other schemes to separate consumers (or workers) from what is rightly theirs, I presumed the contents would be familiar territory. But Owens uncovered stories and details that were amazingly fresh and powerful, 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 learn about Hermann Simon, a German professor and co-founder of Simon-Kucher & Partners (SKP). With a staff of 60 Ph.D.s, including physicists, SKP advised companies on pricing across nearly every major industry. And unlike marketing firms, which respected conflicts of interest, SKP advised purported rivals, like Coke and Pepsi, on how to set their prices. SKP legitimized a science of pricing (price-fixing, really) with a mission: “forming a growing academic infrastructure to help companies optimize prices upward.”
RealPage, which allows landlords to fix prices on rentals by turning over their pricing authority to a common algorithm, is a key villain in Gouged. But the book shows that RealPage is just the latest iteration of conspiracies that have emptied consumers’ wallets for decades. In the late 1980s, U.S. airlines used the Airline Tariff Publishing Company (ATPCO) to signal their future pricing intentions to rivals. ATPCO was used to send “trial balloons” to an airline’s rival, which were accompanied by “footnote designators” specifying the route, fare class, and the terms of the proposed hike. The Department of Justice estimated the ATPCO scheme cost consumers nearly $2 billion between 1988 and 1992.
But after investigating ATPCO, the DOJ opted to settle the case with some minor modifications to slow down the rate of ticket price changes. Not only did this not work, but it led directly to more recent high-tech innovations. In fact, Jeffrey Roper, a former Alaska Airlines executive and principal target in the ATPCO investigation—his computer was seized at one point—was RealPage’s “principal scientist” at launch.
Using similar though more sophisticated techniques, RealPage’s algorithm, called YieldStar, was programmed never to recommend a rent below the minimum rent it suggested, effectively creating a “hard floor” for rent prices. Owens explains the role of RealPage’s “pricing advisers,” who served as enforcers of the cartel; if a proposed rent hike was rejected, the pricing adviser escalated the matter to the landlord’s regional manager. Stephen Winn, RealPage’s CEO, wasn’t satisfied with merely lifting rents via a common algorithm; he also cajoled landlords to “monetize lobbies, parking garages, rooftops, and even broom closets,” and to impose maintenance fees when tenants request 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 very idea of dynamic pricing. They made us comfortable with the notion that prices could change at any moment.” By now, most of us are familiar with Uber’s efforts to customize your fare based on (among other things) where you are getting picked up, where you are heading, and, allegedly, your remaining battery life. What was less understood, at least for this reviewer, is the way Uber has implemented personalized pricing on the labor side of the equation—that is, using worker data to personalize wages.
In 2022, Uber rolled out a system of “upfront pricing,” which permitted it to raise fares while cutting driver pay. Owens reviews the research of Columbia’s Len Sherman, who found that after the introduction of upfront pricing, one Uber driver’s “take rate”—the percentage of the fare captured by the company—increased from 32 to 42 percent by the end of 2024. Similar research by Oxford economists found that Uber’s take rate in the U.K. jumped from 25 to 29 percent after the introduction of upfront pricing. Discrimination is great for the entity doing the discriminating.
A chapter on how companies spy on you was especially disturbing. Did you know that home insurers use aerial drones to study your rooftop? If the conditions signal neglect, they might cancel your coverage before an accident. Did you know that carmakers are reporting your driving tendencies to third parties, who “analyze, bundle, and resell it to insurance companies to hike your premiums or cancel your policy altogether”? Did you know that the McDonald’s app tracks its customers’ “spending habits, visit frequency, and even the time of month when they’re most likely to have disposable income”? McDonald’s can then adjust prices; if the app detects you visiting after payday, Owens explains, it might offer fewer discounts during that period. Did you know that Starbucks sold a Washington Post reporter’s data to more than 60 third parties? We learn that the app adjusted his rewards and discounts downward the more money he spent, presumably an indication that his willingness to pay was higher than originally thought.
Gouged is particularly helpful for lawmakers looking for ways to constrain the onslaught of anti-competitive pricing tactics. To bolster our defenses, the book suggests a modern-day “Shoppers’ Bill of Rights.” In particular, Owens calls for rules that would compel sellers to show the full, all-in price up front; make it easier to cancel a subscription; give shoppers the right to repair anything they buy; ban algorithmic price-fixing; curb dynamic pricing by allowing only for one price change per day; ban surveillance pricing by reinstituting the price tag; ban algorithmic wage discrimination and guarantee a fair wage; and ensure AI chatbots work for the user, not the AI company or retailer.
The faster we can convert these ideas into legislation, the faster we can reclaim a sense of fairness in our economy—with or without the support of neoliberal economists. As our faith in free-market capitalism collapses in the face of widening inequality and anti-competitive schemes to empty our wallets, is it any wonder why democratic socialists are gaining traction?
This article appears in Oct 2026 Issue.
