alt Hacker NewsLike most people, surveillance pricing feels gross to me. But I think we need to separate two things: Surveillance pricing is a combination of (a) price discrimination and (b) surveillance.
If it were up to me, I'd probably give people much stronger legal rights to control their personal information, which would in turn decrease "surveillance".
But I haven't seen a convincing argument to ban price discrimination. There seems to be some kind of implicit assumption that price discrimination reduces consumer surplus on average. But I've never seen a convincing argument to that effect.
For example: Pharmaceuticals are often priced much low in poor countries. That's price discrimination. (You could think of it as a primitive form of surveillance pricing.) But if that were banned, pharmaceutical companies wouldn't lower prices for everyone. That would destroy almost all their revenue which comes from high prices in rich countries. Instead, they'd charge rich-country prices to everyone, and most people in poor countries would simply have to go without. That seems like it would be pure harm.
It's entirely possible that some kind of "coarse" price discrimination is OK/good but "fine-grained" price discrimination is bad. But where's the argument?
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> It's entirely possible that some kind of "coarse" price discrimination is OK/good but "fine-grained" price discrimination is bad. But where's the argument?
This seems entirely reasonable - they're obviously a point where tax rates are too low and revenue isn't being brought in, but also a point where tax rates are too high, incentivizing tax shelters or outright crime, and revenue starts decreasing again. The price discrimination side is the same thing just on "optional" purchases instead of taxes so it makes sense there is some Laffer curve corollary.
Different countries use different money, and also if they sell in the place then it can still be a price for the different place, which does not necessarily involve surveillance, nor does it necessarily involve hidden fees, etc.
(If they try to prevent someone from buying them and using them elsewhere or buying one for a specific other person who requested it who they do not know, then that is different, but it might lead to different issues (e.g. liability of tampering with medications, different regulations in different countries, etc).)
Reductio ad absurdum:
Your local water monopoly has perfected price discrimination. Since water is a necessity, the water monopoly sets the price of water to "everything you own".
> But I haven't seen a convincing argument to ban price discrimination.
The very definition of "price discrimination" is the convincing argument.
"How much does this candy bar cost?"
"Well, you social credit profile says you payed $700 for pair of shoes last week so... twelve grand."
"But the guy in front of me just paid 35 cents for the same candy bar."
"Well, I mean, *he* is white."
> But where's the argument?
Looking to big pharma for guidance is depressingly hilarious.
Price discrimination isn't about wealth. A poor person who books a flight the day before because of an emergency pays more than a rich person who books it 3 months out.
Pharmaceuticals lobbying hard to get the UK to stop buying drugs on the national level (where they have enormous pricing power) and make hospitals responsible for buying drugs. This would be terrible for the UK.
Poor countries aren't in danger from this... we can't ban price discrimination in other countries because they have sovereignty, and the pharmaceutical company isn't monolithic. The one operating in another country is another corporation that must follow that countries rules, and will be granted a license from the American parent company to decide for itself what pricing to impose there (which will be controlled by that country's laws on drug pricing).
It's how it works now, and we don't much have the ability to change that. If we tried, the pharmaceutical companies would be in danger... those countries can spin up factories to make the same drugs and just ignore the patents. A behavior/strategy they want to avoid encouraging.
Simple
There are two ways to legally "earn" money. The first is to provide a product or service that is sufficiently valuable the buyer willingly parts with the money for the price.
The other is extractive — to find a way to exploit the customer with limited choices and extract the maximum value from them. Monopoly pricing is the primary example — people need electricity, housing, food, etc. and if someone corners those markets, or colludes, they can extract a far higher amount of money from people than they would willingly spend in an actually free market of multiple competitors and fully available information (wherein another competitor would offer prices closer to the cost of production and take the business from the overpriced competitor).
Production of value is the essence of the value of capitalism. Extracting value by coercion is fundamentally corrupt, and at the extreme end is nothing more than mob rule ("nice store windows you got there, it'd be a shame if something happened to them; pay us for protection").
Surveillance pricing is simply a fundamentally dishonest form of the latter, exploiting massive amounts of information on customers to extract more money from a person than they would be freely willing to pay for a product, because you found a temporary or permanent vulnerability and 'have them over a barrel'.
A society that permits surveillance pricing will inevitably become more impoverished because the few players doing surveillance pricing will extract more money from the society WITHOUT creating any more value. This impairs everyone else's ability to provide value.
Allowing it is fundamentally stupid and self-destructive.
>For example: Pharmaceuticals are often priced much low in poor countries. That's price discrimination. (You could think of it as a primitive form of surveillance pricing.) But if that were banned, pharmaceutical companies wouldn't lower prices for everyone. That would destroy almost all their revenue which comes from high prices in rich countries. Instead, they'd charge rich-country prices to everyone, and most people in poor countries would simply have to go without. That seems like it would be pure harm.
Well you simply make it illegal to charge more than the poor country prices and, bare with me here, you also make it illegal to go bankrupt.
I think very few people are thinking about the harder economic arguments here. We know that if companies are drawing prices, they'll do it in the way that most hurts the consumer and most benefits the company. Or more realistically, in the way that the company _perceives_ it benefits them the most.
I'm not necessarily opposed to the ideas you're talking about, I just have zero faith that anything positive will be stood up if companies have their say.
Well for one it undermines the currency by making my dollar worth something different from your dollar, makes it impossible for individuals to make informed choices, and makes it so that there's no reason to try to be more productive/chase some higher paying endeavor since it will be extracted for your basic necessities anyway and you'll end up in the same position. So now labor price signals fail.
We already see the results of this in the US in the medical and educational systems, where planning is nearly impossible because the price is hidden until purchase (or even afterward) and the other side is trying to price it at "whatever you have". Unsurprisingly, both of those have absurd debt loads and are causing society-wide discontent/destabilization.
Now imagine that grocers can individually price to you, and you find out what you owe (and whether you need to put some items back) at the register, and this information about you is available to be purchased by anyone so all available grocers have that same knowledge. What are you going to do?