Respites and Little Luxuries

"Dynamic pricing," precarity, social credit, and efficiency as ideology

I’d been working on a piece for awhile, when the brouhaha over the Wendy’s dynamic pricing hit. So I used that to wrap up the piece, which ran in Discourse Magazine:

This isn’t about dynamic pricing. That’s just one example of what feels like a trend. No more snow days. No more certainty in fast food prices. General inflation. “Extra-economy” airplane seats without even carry-on bags included. The Square kiosk asking you to tip 22% at a counter-service establishment. Paid vacation turning into “unlimited paid time off”—which corporate managers have almost certainly determined results in fewer total days taken off, because when everything is promised, nothing in particular is. Plastic bags at the supermarket being taxed or banned. $16 burgers served without fries. Fewer and fewer little perks, respites, luxuries. Every little bit of value, every last little treat, being squeezed out.

These might seem like small matters—no more than inconveniences, or perhaps the small costs we pay for the vast benefits of globalization and economic dynamism. They might even represent an increase in choices and options. But for many people, they upend a sense that everyday life is secure. The idea that you can’t even rely on the price of a burger to be the price of a burger captures a feeling of deterioration and precarity in America.

I basically take the response to the idea of dynamic pricing for burgers not as consumers who don’t know what happy hour is, but as a rejection of yet another element of uncertainty and precarity in everyday American life.

I tie that into housing and zoning reform, and how urbanists and housing advocates should be careful to avoid the impression that densification and construction are part of this deterioration of American life. But I really want to talk about some other things here.

First, here’s another example that didn’t make it into this piece, which I just wrote about a few days ago: waiving your contingencies when buying a house. I assume this was always possible, just rarely done. Now it is essentially expected in hot markets.

You even have to specify that an inspection is to negotiate (go back and ask for repairs at seller’s expense) or to void only (take it or leave it based on the results). Suddenly these things that were once considered part of the process are now reduced only to dollar amounts. It’s a lot like how a carry-on bag was just understood to be included in a flight ticket, until airlines began offering extra-economy tickets that don’t even include that.

I make the counterargument: that by unbundling products and services we let people choose exactly what they want, increase efficiency, etc. This may be true in terms of economics, but economics isn’t truth. It’s just economics.

Permitting this sort of freedom of choice in some ways reduces freedom, if by freedom we mean the ability to go about our days with minimal psychological discomfort and with a sense of order and stability. Crime impinges on this understanding of freedom, for example. So does the burden of constantly choosing among options and being forced to nickel-and-dime yourself over every decision you make.

(“Do I rush over there before 3pm to get the discount, or just pay the regular price? Oh no, there’s a lot of traffic. I got there at 3:02pm. Now these thieves are going to rob me of my happy hour price!” I absolutely can’t stand having to play out this two-bit drama over meaningless stuff, and I don’t want any more of it.)

It’s the same sort of error the Lochner court made in striking down working-hour regulations, arguing that workers should have the right to choose to work as many hours as they wanted.

Suddenly you’re made to feel like you’re being entitled, when you’re really just asking for what you thought you were entitled to.

I remember, in one of my grad school classes on international trade—taught by George W. Bush’s lead trade negotiator—sparring with the free-trade orthodoxy that was baked into the course material. I’m not an economist, and I wasn’t questioning comparative advantage or the efficiency of trade or any of the actual economic arguments. I basically accept them, though some of the free-trade critics have good arguments too. Rather, I saw that free trade wanted to cast itself as a sort of metaphysical truth, and protectionism as a metaphysical falsehood. Like it was evolution versus creationism.

In one class, I asked, basically, why can’t a rich country just choose to opt out of the hyper-efficient global economy? Why can’t we pause, take a breath, enjoy the fruits of our labor? Shield ourselves from constant competition? What if a nation values stability and predictability over dynamism and raw increases in the material standard of living? What if cheap TVs just don’t paper over a certain psychological discomfort that globalization produces?

She paused, and I had the sense that she hadn’t really been asked this question: of free trade and globalization as questions of competing values or worldviews, rather than as questions of economic facts or falsehoods. Her answer was that globalization wasn’t a policy choice but something like the Industrial Revolution. It just was. The idea of “opting out” was maybe fine in theory, but in practice there was no real way to implement that without all the classic problems of protectionism and autarky. And that may well be true.

But I see this whole dynamic price debate—and other related issues, like debates over privatization, or the idea of airline “seats” where you stand the whole time, or tiny apartments that the very-online folks call “pods,” etc.—as similar. “Let people express their preferences by paying for them!” is not a truth. Choice, in and of itself, is not an objective good. Efficiency is not an objective good. These are values, against which must be weighed other values.

My favorite example is the Post Office’s universal delivery mandate. This is not a market phenomenon. Universal delivery, at least not at the prices we pay now, would almost certainly not exist were the Post Office a pure private entity. Somewhere along the way we determined that the value of the mail—the civic notion that every American deserved to be connected to it—was worth more than the value of efficiency. Over the decades many policy-wonk types have suggested abolishing universal delivery. Think of the miles those aging Post Office trucks log on bumpy unpaved rural roads, just to put junk mail in a few boxes!

But we rightly understand that there is more to life than efficient economics. The subtext of a pure free trade and really pure libertarian ideology is that there is no such thing at all as the nation or the community or the civic realm—the polis. Market economics is good as a toolbox of policy ideas. It is not sufficient as a system of metaphysics or as a worldview.

A final thought on “dynamic pricing.” There’s a not necessarily fully-baked thought I have: that dynamic pricing has something in common with “social credit,” or the idea of punishing or rewarding individual people with social or economic benefits based on their compliance with the law, or with what the government sees as pro-social behavior.

I also drew this analogy with the scheme in Oxford awhile back to individually track the mileage of motorists and charge them for access to or through certain neighborhoods after a certain number of miles (which got tied into the 15-minute cities conspiracy theories and the notion that such cities would ban their inhabitants from leaving.)

Some people basically said, it’s just congestion pricing or tolls. Others felt that it overstepped something subtle in a free society. I feel that way. The idea that instead of a body of equally applied rules, policy plays out at the level of the individual? I still have miles, you don’t? I’ve earned enough social credit points to take the high-speed train! In some ways it’s capitalist or consumerist, in other ways it’s tyrannical. It feels to me like the severing of public policy from the rule of law. This is what conservatives are thinking of when they talk about “technocrats” and “technocracy” in a derogatory way (which I also recently wrote about). And they have a point.

All of this is to say, economics is a tool, not an ideology. Efficiency is a value, not an objective good.

And if fast food restaurants want to do happy hour and sell it to investors with au courant jargon, fine. But I want to know the price of the damn burger.

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Related Reading:

Now, Folks, It’s Time For “Who Do You Trust!”

You Never Know How It Falls Apart

Zip-Flation

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