Low culture

From Wikipedia, the free encyclopedia
From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/Low_culture

Low-culture humor:
Kissing the Pope's Feet
  German peasants bare their buttocks and fart in response to a papal bull of Pope Paul III: "The Pope speaks: Our sentences are to be feared, even if unjust. Response: Be damned! Behold, o furious race, our bared buttocks."
The irreligious scene is low-culture humor from the Papstsbotbilder (Depictions of Papal Messages, 1545) series of wood cuts, by Lucas Cranach the Elder, which was commissioned by Martin Luther.

In society, the term low culture identifies the forms of popular culture that have mass appeal, often broadly appealing to the middle or lower cultures of any given society. This is in contrast to the forms of high culture that appeal to a smaller, often upper-class proportion of the populace. Culture theory proposes that both high culture and low culture are subcultures within a society, because the culture industry mass-produces each type of popular culture for every socioeconomic class. Despite being viewed as characteristic of less-educated social classes, low culture is still often enjoyed by upper classes as well. This makes the content that falls under this categorization the most broadly consumed kind of media in a culture overall. Various forms of low culture can be found across a variety of cultures, with the physical objects composing these mediums often being constructed from less expensive, perishable materials. The phrase low culture has come to be viewed by some as a derogatory idea in and of itself, existing to put down elements of pop or tribal culture that others may deem to be "inferior."

Standards and definitions

In Popular Culture and High Culture: An Analysis and Evaluation of Taste (1958), Herbert J. Gans said:

Aesthetic standards of low culture stress substance, form being totally subservient, and there is no explicit concern with abstract ideas or even with fictional forms of contemporary social problems and issues. . . . Low culture emphasizes morality, but limits itself to familial and individual problems and [specific] values, which apply to such problems. Low culture is content to depict traditional working class values winning out over the temptation to give in to conflicting impulses and behavior patterns.

In other words, low culture is often associated with media that presents smaller-scale or individual experiences that are easier for the general public to identify with.

History

Physical artifacts from low culture are normally cheaply and often crudely made, as well as often small, in contrast to the comparatively grand public art or luxury objects of high culture. While this is a necessity for this low culture media to be broadly disseminated, it has also contributed to its reputation as low-brow or of lesser merit. The cheapness of the materials, many of which are perishable, generally means that their survival and preservation in modern times is rare. There are exceptions, especially in pottery and graffiti on stone. An ostracon is a small piece of pottery (or sometimes stone) which has been written on, for any of a number of purposes, among which curse tablets or more positive magical spells such as love magic are common. Wood must have been a common material, but survives for long periods only in certain climatic conditions, such as Egypt and other very arid areas, and permanently wet and slightly acidic peat bogs.

Once printing (and paper) became relatively cheap, popular prints became increasingly widespread by the late Renaissance. This technology also allowed for the production of cheap texts in street literature such as broadsides and broadside ballads, typically new topical words to a familiar tune. These examples became extremely common, but were treated as ephemera, so survival of this material is relatively uncommon.

Folk music is another notable historical manifestation of low culture. Much traditional folk music was only written down, and later mechanically recorded, in the 19th century, as growing nationalist sentiments in many countries generated interest from middle class enthusiasts. In comparison to other forms of music, such as music written for orchestras or by well-known classical composers, folk music was considered a product of low culture given its association with the more popular, cruder tastes of those who created it. This social separation between folk and classical music was also influenced by the traditions and expectations followed by the latter, which was often written for use in religious settings that demanded certain consistencies in the musical structure. Instead, folk music (along with its successor, contemporary folk music) is thought of as a reflection of common themes present in its community of origin. These combined traits help define folk music as an early, widespread form of low culture, for which the lower/working classes were both the largest producers and consumers.

Modern day

The phrase trash culture began to enter the public lexicon in the 1980s as a classification for these kinds of recent low-cultural expressions. This kind of content is often considered to be either vulgar, in poor taste, or lacking in-depth artistic merit. With the explosion of tabloid journalism and sensationalistic reality television throughout the late 20th century, many modern artists such as Brett Easton Ellis would use these works as inspirations to bridge the gap between the confines of high and low culture. The result of this on his work in particular has been media that could belong to either categorization based on the grotesque nature of his works content mixed with the depth more characteristic of other high-brow works.

Culture as social class

Each social class possesses its own versions of high and low culture, the definition and content of which are determined by the socioeconomic and educational particulars of the people who compose said social class. This falls in line with the sociological theory known as habitus, which states that the way that people perceive and respond to the social world they inhabit is through their personal habits, skills, and disposition of character. Therefore, what exactly constitutes high culture and low culture has specific meanings and usages that are collectively determined by the members of any respective social class. However, people of higher social classes often view the cultural objects they consume as having a higher societal standing than that taken in by lower classes. This makes the distinction between high and low culture one drawn along social standings, a trend that has resulted in the art and content that makes up low culture being regularly discredited throughout history.

Variation by country

The demographics who make up lower social classes have often been given specific phrases to refer to their classification as being of a lower social standing. These varying groups, who are usually made up of younger and poorer individuals, are often viewed as being a part of regionally specific delinquent subcultures. The following variations of these types of groups are stereotypical of the audiences who consume low culture works.

• Bogan – Unrefined or unsophisticated person in Australia and New Zealand.
• Chav – Stereotype of anti-social youth dressed in sportswear in the United Kingdom.
• Dres – Member of a Polish chav-like subculture that originated in the 1990s.
• Flaite – Chilean urban lower-class youth.
• Gopnik – Russian and Eastern European term for delinquent. Characterized as wearing Adidas tracksuits.
• Redneck – Derogatory term applied to a white person from the rural South of the United States.
• Skeet (Newfoundland) – A derogatory, stereotypical phrase used within the Canadian province of Newfoundland and Labrador used to refer to someone who is ignorant, aggressive and unruly.

Popular examples

Popular prints

Main article: Popular print

Common throughout the 1400s to 1700s in Europe, popular prints highlight some of the key identifying features of low culture media. Shortly after innovations in printing technology such as moveable type, popular prints became a useful tool for spreading political, religious, and social ideas to the working class—emphasis was placed on adding artwork or visually appealing designs in order to maximize readership in societies which, at the time, were not fully literate. These prints contributed to pioneering satirical content, varying portrayals of common subcultures at the time, and other subject matter that is still found in modern-day low culture media.

Popular prints are also observed in Chinese society from the late 1800s to mid-1900s, in which they were intended to be readily accessible to the majority of consumers (i.e., the working or middle classes). Similarly to those found in Europe, the Chinese prints would emphasize design elements such as colorful designs and relatively inexpensive production, which led to their frequent consumption for both spreading various sociopolitical ideas or decorative purposes. This usage of brief, eye-catching marketing strategy allowed the prints, much like their European counterparts, to appeal to a wider audience that would be receptive to both the entertainment and political content they contained.

Although the reach of popular prints was both far spanning and effective, its classification as a lower art made it less desirable to higher classes, especially during the art form's earlier years when the drawings themselves were more crude and simply produced due to necessity. As printing techniques advanced, and the quality of the art itself improved during the 17th and 18th centuries, higher social classes began to take more interest in it. This has allowed for more of this genre's later works to survive into the modern age, with earlier, 15th century era works being lost to time due to the perishable nature of printing materials.

Toilet humor

Main article: Toilet humour

Also referred to as potty or scatological humor, toilet humor is a brand of off-color humor that deals with defecation, urination, and other bodily functions that would often be deemed as societally taboo. Although most forms of off-color comedy could be viewed as a kind of low culture, toilet humor in particular has received this connotation due to the comedy style's frequent interest amongst toddlers and young children, for whom cultural taboos related to the acknowledgement of waste excretion still have a degree of novelty. For this reason, toilet humor has come to be regularly viewed as juvenile, although it has continued to find success in a number of modern settings such as in the Captain Underpants and South Park media franchises. This relation between low culture and what is enjoyed by children demonstrates a regular pattern in who is seen to find low culture appealing.

Lowbrow art movement

Main article: Lowbrow (art movement)

Arising in the Los Angeles, California, area during the 1960s, Lowbrow was an underground visual art movement that took inspiration from other popular forms of low culture art of the time such as underground comix, punk music, tiki culture, and graffiti. The phrase for this style was coined by artist Robert Williams, who decided to name a 1979 book containing his paintings as The Lowbrow Art of Robt. Williams, in opposition to the idea of high-brow art following the initial rejection of recognition of his work from several pre-established art institutions. The movement has also been referred to as "pop surrealism" in some circles (and likewise Williams himself has referred to it as "cartoon-tainted abstract surrealism"), where the feeling appears to be that the label "lowbrow" may be inappropriate, given the artistic merit found in the movement's artists. Despite initial pushback from contemporary critics, the movement has begun to be taken more seriously as the years have gone on, with the first formal gallery exhibition displaying the works of the movement being orchestrated in 1992 by Greg Escalante at the Julie Rico Gallery in Santa Monica.

Internet memes

Main article: Internet meme

Many well-known examples of modern low culture are represented by online memes that can quickly spread through various social media or messaging platforms. In the context of modern internet culture, memes are cultural ideas (often in the form of images, videos, or vernacular phrases) that have gradually developed certain contextual meanings for their audiences. Memes are often shared by internet users in an informal setting, often with the intent of humor, satire, or social commentary; these behaviors frequently lead to certain images reaching a status of near-universal recognition and fame across the internet. The rapid popularization of Pepe the Frog as a meme in the mid-2010s highlights the variety of symbolic purposes that any one meme can be applied to represent. The image, which can be traced back to a comic book character created by Matt Furie in 2005, was heavily reused and shared across various online forums in later years. Eventually, Pepe's presence spread to a number of far-right communities on the website 4chan, in which it later became associated with hate speech. This sudden shift in usage prompted more serious analysis in other circles, including sociology and other academic communities, as the meme's spread and highly varied usage by different online groups represented a unique kind of media that could influence future political discourse, particularly among middle- or lower-class internet users.

Reality television

Main article: Criticism of reality television

Since its inception in the 1990s, the reality television genre has been a commonly cited example of low culture in contemporary times. Reality television has been labelled as low culture due to its usage of the word "reality" when most drama and conflicts are manufactured, widespread appeal, glorification of wealth and fame, and promotion of materialism. English actor and filmmaker, Gary Oldman described reality television as "the museum of social decay." The genre's overreliance on schadenfreude, the pleasure of seeing another's humiliation or misfortune is also a contributor to why reality television is often cited as low culture. American digital magazine, Entertainment Weekly wrote "Do we watch reality television for precious insight into the human condition? Please. We watch for those awkward scenes that make us feel a smidge better about our own little unfilmed lives" regarding the genre succeeding from the public humiliation of others.

Formulaic blockbusters

These films are designed to have mass appeal in order to maximise profits, usually relying on formulaic storytelling and accessibility that guarantee financial success at the expense of critical reception or artistic and intellectual value. Such examples include the superhero genre, films by Michael Bay, and the Jurassic Park, Star Wars, and Fast & The Furious media franchises. American filmmaker, Martin Scorsese has compared these films, particularly those from the Marvel Cinematic Universe to theme park rides, stating that "they seem to me to be closer to theme parks than they are to movies as I’ve known and loved them throughout my life."

Mass media

Audience

All cultural products (especially high culture) have a certain demographic to which they appeal most. In regard to low culture, it often appeals to very simple and basic human emotional needs, while also offering a perceived return to innocence. This escape from real world problems comes from the experience of being able to live vicariously through the lives of others by viewing them through various forms of media. While the audiences that consume low culture tend to originate from lower socioeconomic classes, those considered 'elite' can also interact with this media. An example of this interaction between classes can be found in outsider art, which is often created by individuals without a background in the fine arts—interestingly, it has been heavily associated with consumption by higher classes throughout the 20th century in a notable example of higher classes consuming media that was neither generated by nor specifically intended to catch their attention.

Stereotypes

Low culture can often be formulaic, employing trope conventions, stock characters, and character archetypes in a manner that can be perceived as more simplistic, crude, emotive, unbalanced, or blunt compared to the ways in which a piece of high culture would implement them. This leads to the perception of high culture as being more subtle, balanced, or refined and open for interpretation in comparison with its lower counterpart. Modern media that would often be constituted as low culture often continues to implement stereotypes, often to comment or critique them in a satirical manner.

Cross-cultural artifacts

The use and display of different cultural artifacts, especially in the West, has been studied as an example of low culture consumed by upper classes. Certain examples of these artifacts, such as artwork from African cultures, may be found in higher-income establishments with no ties to these cultures, a phenomenon that has been described as "cultural omnivorousness [sic]," with the aim of creating a more distinguished air in the interior design of the owners' business or living spaces. These cases exemplify another means by which media deemed low culture can still be consumed by socioeconomic classes besides those with which it is chiefly associated, or notably for which it has primarily been created.

Enshittification

From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/Enshittification

Enshittification, also known as crapification and platform decay, is the term used to describe the pattern in which online products and services decline in quality over time. Initially, vendors create high-quality offerings to attract users, then they degrade those offerings to better serve business customers, and finally degrade their services to users and business customers to maximize profits for shareholders.

Writer Cory Doctorow coined the neologism enshittification in November 2022, though he was not the first to describe and label the concept. The American Dialect Society selected it as its 2023 Word of the Year, with Macquarie Dictionary following suit for 2024.

Doctorow advocates for two ways to reduce enshittification: upholding the end-to-end principle, which asserts that platforms should transmit data in response to user requests rather than algorithm-driven decisions; and guaranteeing the right of exit—that is, enabling a user to leave a platform without data loss, which requires interoperability. These moves aim to uphold the standards and trustworthiness of online platforms, emphasize user satisfaction, and encourage market competition.

History and definition

Enshittification was first used by Cory Doctorow in a November 2022 blog post that was republished three months later in Locus. He expanded on the concept in another blog post that was republished in the January 2023 edition of Wired:

Here is how platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die. I call this enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a "two-sided market", where a platform sits between buyers and sellers, hold each hostage to the other, raking off an ever-larger share of the value that passes between them.

In a 2024 op-ed in the Financial Times, Doctorow argued that "'enshittification' is coming for absolutely everything" with "enshittificatory" platforms leaving humanity in an "enshittocene".

Doctorow argues that new platforms offer useful products and services at a loss, as a way to gain new users. Once users are locked in, the platform then offers access to the userbase to suppliers at a loss, and once suppliers are locked in, the platform shifts surpluses to shareholders. Once the platform is fundamentally focused on the shareholders, and the users and vendors are locked in, the platform no longer has any incentive to maintain quality. Enshittified platforms that act as intermediaries can act as both a monopoly on services and a monopsony on customers, as high switching costs prevent either from leaving even when alternatives technically exist. Doctorow has described the process of enshittification as happening through "twiddling": the continual adjustment of the parameters of the system in search of marginal improvements of profits, without regard to any other goal. Enshittification can be seen as a form of rent-seeking.

To solve the problem, Doctorow has called for two general principles to be followed:

• The first is a respect of the end-to-end principle, which holds that the role of a network is to reliably deliver data from willing senders to willing receivers. When applied to platforms, this entails users being given what they asked for, not what the platform prefers to present. For example, users would see all content from users they subscribed to, allowing content creators to reach their audience without going through an opaque algorithm; and in search engines, exact matches for search queries would be shown before sponsored results, rather than afterwards.
• The second is the right of exit, which holds that users of a platform can easily go elsewhere if they are dissatisfied with it. For social media, this requires interoperability, countering the network effects that "lock in" users and prevent market competition between platforms. For digital media platforms, it means enabling users to switch platforms without losing the content they purchased that is locked by digital rights management.

Reception and impact

Doctorow's concept has been cited by various scholars and journalists as a framework for understanding the decline in quality of online platforms. Discussions about enshittification have appeared in numerous media outlets, including analyses of how tech giants like Facebook, Google, and Amazon have shifted their business models to prioritize profits at the expense of user experience. This phenomenon has sparked debates about the need for regulatory interventions and alternative models to ensure the integrity and quality of digital platforms.

The American Dialect Society selected enshittification as its 2023 word of the year.

The Macquarie Dictionary named enshittification as its 2024 word of the year, selected by both the committee's and people's choice votes for only the third time since the inaugural event in 2006.

Examples

Airbnb

Once a disruptor competing with established hotel chains, Airbnb now charges nightly rates exceeding those of existing hotels. This is a direct result of Airbnb now charging customers and hosts a mark-up of over 45% in service fees on transactions that use the online platform.

Amazon

See also: Criticism of Amazon

In Doctorow's original post, he discussed the practices of Amazon. The online retailer began by wooing users with goods sold below cost and (with an Amazon Prime subscription) free shipping. Once its user base was solidified, more sellers began to sell their products through Amazon. Finally, Amazon began to add fees to increase profits. In 2023, over 45% of the sale price of items went to Amazon in the form of various fees. Doctorow described advertisement within Amazon as a payola scheme in which sellers bid against one another for search-ranking preference, and said that the first five pages of a search for "cat beds" were half advertisements.

Doctorow has also criticised Amazon's Audible service, which controls over 90% of the audiobook market and applies mandatory digital rights management (DRM) to all audio books. He pointed out that this meant that a user leaving the platform would lose access to their audiobook library. Doctorow decided in 2014 to not sell his audiobooks via Audible anymore but produce them himself even though that meant earning a lot less than he would have by letting Amazon "slap DRM" on his books. He has since then published over half a dozen of his audiobooks independently as Amazon's system would not distribute them without DRM.

Facebook

See also: Criticism of Facebook

According to Doctorow, Facebook offered a good service until it had reached a "critical mass" of users, and it became difficult for people to leave because they would need to convince their friends to go with them. Facebook then began to add posts from media companies into feeds until the media companies too were dependent on traffic from Facebook, and then adjusted the algorithm to prioritise paid "boosted" posts. Business Insider agreed with the view that Facebook was being enshittified, adding that it "constantly floods users' feeds with sponsored (or 'recommended') content, and seems to bury the things people want to see under what Facebook decides is relevant". Doctorow pointed at the Facebook metrics controversy, in which video statistics were inflated on the site, which led to media companies over-investing in Facebook and collapsing. He described Facebook as "terminally enshittified".

Google Search

See also: Criticism of Google

Doctorow cites Google Search as one example, which became dominant through relevant search results and minimal ads, then later degraded through increased advertising, search engine optimization, and outright fraud, benefitting its advertising customers. This was followed by Google rigging the ad market through Jedi Blue to recapture value for itself. Doctorow also cites Google's firing of 12,000 employees in January 2023, which coincided with a stock buyback scheme which "would have paid all their salaries for the next 27 years", as well as Google's rush to research an AI search chatbot, "a tool that won't show you what you ask for, but rather, what it thinks you should see".

Netflix

After years of competing fiercely in the "streaming wars", Netflix emerged as the main winner in the early 2020s. Once it had achieved a quasi-monopolistic position, Netflix proceeded to raise prices, introduce an ad-supported tier, with Netflix also discontinuing its cheapest ad-free plan in the UK and Canada in 2024, as well as a crack down on password sharing.

Reddit

Reddit users protest the changes on r/place. "Spez" is the username of the Reddit CEO, Steve Huffman.

See also: 2023 Reddit API controversy

In 2023, shortly after its initial filings for an initial public offering, Reddit announced that it would begin charging fees for API access, a move that would effectively shut down many third-party apps by making them cost-prohibitive to operate. CEO Steve Huffman stated that it was in response to AI firms scraping data without paying Reddit for it, but coverage linked the move to the upcoming IPO; the move shut down large numbers of third-party apps, forcing users to use official Reddit apps that provided more profit to the company. Moderators on the site conducted a blackout protest against the company's new policy, although the changes ultimately went ahead. Many third party Reddit apps such as the Apollo app were shut down because of the new fees.

In September 2024, Reddit announced that moderators will no longer have the ability of changing subreddit accessibility from "public" to "private" without approval from Reddit staff. This was widely interpreted by moderators as a punitive change in response to the 2023 API protests.

Twitter

Main article: Twitter under Elon Musk

The term was applied to the changes to Twitter in the wake of its 2022 acquisition by Elon Musk. This included the closure of the service's API to stop interoperable software from being used, suspending users for posting (rival service) Mastodon handles in their profiles, and placing restrictions on the ability to view the site without logging in. Other changes included temporary rate limits for the number of tweets that could be viewed per day, the introduction of paid subscriptions to the service in the form of Twitter Blue (later renamed to X Premium), and the reduction of moderation. Musk had the algorithm modified to promote his own posts above others, which caused users' feeds to be flooded with his content in February 2023. In April 2024, Musk announced that new users would have to pay a fee to be able to post.

The changes led to a dramatic decline in revenue for the company. The increase in hate speech on the platform, particularly antisemitism and Islamophobia during the Israel–Hamas war, led to some organisations pulling advertisements. According to internal documents seen by The New York Times in late 2023, the losses from advertisers were projected to cost the company $75 million by the end of the year. Musk delivered an interview on November 29, 2023, in which he told advertisers leaving the website to "go fuck yourself." By August 2024, revenue had fallen 84% compared to before Musk's ownership.

Uber

See also: Controversies involving Uber

App-based ridesharing company Uber gained market share by ignoring local licensing systems such as taxi medallions while also keeping consumer costs artificially low by subsidizing rides via venture capital funding. Once they achieved a duopoly with competitor Lyft, the company implemented surge pricing to increase the cost of travel to riders and dynamically adjust the payments made to drivers. The suitability of Uber surge pricing as an example of the phenomenon of enshittification is questionable, however, as surge pricing has been found to increase the quantity of drivers during periods when the surge pricing is in effect and a reallocation of rides to those who receive the most benefit from them. This increase in quantity has been found to increase the availability of Ubers for riders, keeping waiting times low and ride completion rates high during periods of surge pricing.

Unity

See also: Unity (game engine) § Runtime fee reception

The proposed (and eventually abandoned) changes to the Unity game engine's licensing model in 2023 were described by Gameindustry.biz as an example of enshittification, as the changes would have applied retroactively to projects which had already been in development for years while degrading quality for both developers and end users, while increasing fees. While the Unity Engine itself is not a two-sided market, the move was related to Unity's position as a provider of mobile free-to-play services to developers, including in-app purchase systems.

In response to these changes, many game developers announced their intention to abandon Unity for an alternative engine, despite the significant switching cost of doing so, with game designer Sam Barlow specifically using the word enshittification when describing the new fee policy as the motive. Use of the Unity engine at game jams declined rapidly in 2024 as indie developers switched to other engines. Unity usage at the Global Game Jam declined to 36% that year, from 61% in 2023. The GMTK Game Jam also reported a major decline in Unity usership.

Dating apps

The market for dating apps has been cited as an example of enshittification due to the conflict between the dating apps' ostensible goal of matchmaking, and their operators' desire to convert users to the paid version of the app and retaining them as paying users indefinitely by keeping them single, creating a perverse incentive that leads performance to decline over time as efforts at monetization begin to dominate. Mathematical modeling has suggested that it is in the financial interests of app operators to offer their user base a sub-optimal experience.

Price gouging

From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/Price_gouging

1904 cartoon warning attendees of the St. Louis World's Fair of hotel room price gouging

Price gouging is a pejorative term for the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disasters. Usually, this event occurs after a demand or supply shock. The term can also be used to refer to profits obtained by practices inconsistent with a competitive free market, or to windfall profits. In some jurisdictions of the United States during civil emergencies, price gouging is a specific crime. Price gouging is considered by some to be exploitative and unethical and by others to be a simple result of supply and demand.

Price gouging is similar to profiteering but can be distinguished by being short-term and localized and by being restricted to essentials such as food, clothing, shelter, medicine, and equipment needed to preserve life and property. In jurisdictions where there is no such crime, the term may still be used to pressure firms to refrain from such behavior. The term is used directly in laws and regulations in the United States and Canada, but legislation exists internationally with similar regulatory purpose under existing competition laws.

It is sometimes used to refer to practices of a coercive monopoly that prices above the market rate by deliberately curtailing production. Alternatively, it may refer to suppliers' benefiting to excess from a short-term change in the demand curve.

Price gouging became highly prevalent in news media in the wake of the COVID-19 pandemic, when state price gouging regulations went into effect due to the national emergency. The rise in public discourse was associated with increased shortages related to the COVID-19 pandemic. The resulting inflation after the pandemic has also been blamed, at least in part, by some on price gouging. During the pandemic, the idea of 'greedflation' or 'seller's inflation' also moved out of the progressive economics fringe by 2023 to be embraced by some mainstream economists, policymakers and business press.

Laws against price gouging

United States

As of March 2021, Proskauer Rose counted 42 states that have emergency regulations or price-gouging statutes. Price-gouging is often defined in terms of the three criteria listed below:

1. Period of emergency: The majority of laws apply only to price shifts during a declared state of emergency or disaster.
2. Necessary items: Most laws apply exclusively to items essential to survival, such as food, water, and housing.
3. Price ceilings: Laws limit the maximum price that can be charged for given goods.

Washington state does not have a specific statute addressing price gouging, can nevertheless have sought to apply its consumer protection act to argue that high prices during COVID-19 for PPE was an "unfair" or "deceptive" practice.

When the law goes into effect

Statutory prohibitions on price gouging become effective once a state of emergency has been declared. States have legislated different requirements for who must declare a state of emergency for the law to go into effect. Some state statutes that prohibit price gouging—including those of Alabama, Florida, Mississippi, and Ohio—prohibit price increases only once the President of the United States or the state's governor has declared a state of emergency in the impacted region. California permits emergency proclamations by officials, boards, and other governing bodies of cities and counties to trigger the state's price gouging law.

What the law prohibits

State laws vary on what price increases are permitted during a declared disaster. California has set a 10 percent ceiling on price increases. The law includes exceptions for price increases that can be justified in terms of the increased cost of supply, transportation, demand, or storage. Florida prohibits a price increase "that grossly exceeds the average price" of that same item in the 30 days leading up to the emergency declaration. Alabama state law does not define what constitutes a "gross disparity," making it difficult for either affected residents or law enforcement to determine when price gouging has occurred, while others merely limit vendors and landlords to price increases of less than 25 percent.

Enforcement

Enforcement of anti-price gouging statutes can be difficult because of the exceptions often contained within the statutes and the lack of oversight mechanisms. Statutes generally give wide discretion not to prosecute. In 2004, Florida determined that one-third of complaints were unfounded, and a large fraction of the remainder was handled by consent decrees, rather than prosecution.

California

California Penal Code 396 prohibits price gouging, generally defined as anything greater than a 10 percent increase in price on items such as rent, hotel lodging, gasoline, food, and other essentials, once a state of emergency has been declared. Unlike other states that require the President of the United States or the state's governor to declare a state of emergency, California allows emergency proclamations by officials, boards, and other governing bodies of cities and counties to trigger C.P.C. § 396.  The prohibition lasts for up to 30 days at a time and may be renewed as necessary.

In the wake of the 2017 California wildfires and the 2018 California wildfires, Governor Jerry Brown repeatedly extended the price-gouging ban for impacted counties. One of his last acts as governor was to extend the prohibitions until May 31, 2019.

Until 2018, the state had no limitations on the rent that could be charged for housing that was not on the market until after a disaster. Due to complaints from the district attorney that she couldn't prosecute high priced new rentals which came on the market after the Tubbs Fire, the legislature amended C.P.C. § 396.

The above 2018 price gouging law makes it illegal to offer a previously unrented property for more than about $10,000 per month during an emergency. In the wake of the January 2025 Palisades Fire, this price cap has made it harder for displaced people to find housing, because many comparable properties normally rent for more than this, and this rent cap discourages owners of high-end vacation homes from making their homes available for rent. One expert estimated that hundreds to thousands more homes might be available for rent if this rent cap did not exist.

Florida

Florida's "state of emergency" law criminalizes price gouging. A supplier of essential goods and services may be charged when it sharply raises prices in anticipation of or during a civil emergency or when it cancels or dishonors contracts in order to take advantage of an increase in prices related to such an emergency. The model case is a retailer who increases the price of existing stocks of milk and bread when a hurricane is imminent. Though the effect of such laws have been proven to actually increase the risk of extreme shortages since the absence of increased prices replaces higher prices with an incentive for the earliest person to market to obtain all of a product about to imminently experience a period of very high demand.

In Florida, it is a defense to show that the price increase mostly reflects increased costs, such as running an emergency generator or hazard pay for workers, while California places a ten percent cap on any increases.

United Kingdom

Laws and regulations in the United Kingdom do not use the phrase "price gouging" in consumer protection regulation but are similar to U.S. laws.^{[citation needed]} Chapter II of the UK Competition Act 1998 prohibits businesses with market dominance from engaging in "abusive" conduct, including "unfair" pricing. Market dominance is considered when a business has greater than 40% of the market share within their respective industry. In the case of a violation of Chapter II, a business can be forced to pay up to 10% of global revenues.

European Union

Similar to UK regulations, the EU does not include "price gouging" explicitly in regulation.^{[citation needed]} Article 102 of the Treaty on the Functioning of the European Union is "aimed at preventing undertakings who hold a dominant position in a market from abusing that position." As stated, "such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions..." In 2016, the EU Commissioner for Competition Margrethe Vestager stated that the EU Commission will "intervene directly to correct excessively high prices" specifically within the gas industry, pharmaceutical industry and in cases of abuse of standard-essential patents.

Price gouging and COVID-19

In the early stages of the COVID-19 pandemic, there were shortages of some consumer goods like toilet paper due to supply chain congestion.

On March 13, 2020, a national emergency was declared in the United States by President Trump in response to the outbreak of the COVID-19 pandemic; the declaration allowed for an initial $50 billion to be used to support states. As studied by the National Institutes of Health, the COVID-19 pandemic induced a panic as mandates were put in place for Americans to stay at home, quarantine, and wear masks. The declared COVID-19 emergency made state-level price gouging laws and regulations go into effect. Demand for certain products increased while supply decreased. Such products in short supply included surgical masks, N95 respirators, hand sanitizer, and toilet paper. More than 30 states' attorneys general urged Facebook, Amazon, Craigslist, eBay, and Walmart to restrict the selling of necessary products at "unconscionable" prices.

Online price gouging

A 2018 appeals court overturned a lower court ruling, arguing that the dormant commerce clause of the U.S. constitution meant Maryland's anti-price gouging statute was unconstitutional.

Online Merchants Guild v. Cameron, 2020

This complaint relates to online merchants selling necessary products on Amazon during the US national state of emergency invoked in response to the COVID-19 pandemic. The Online Merchants Guild, a trade association for online merchants, filed a case in Kentucky on the basis that state regulations against price gouging are unconstitutional in the online marketplace since online merchants are unable to control pricing by state. Judge Gregory Van Tatenhove sided with the Online Merchants Guild on June 23, 2020, saying that the Kentucky Attorney General cannot enforce the price gouging regulations on Amazon sellers. The Sixth Circuit Court of Appeals unanimously overturned that ruling in April of 2021.

Price gouging-related lawsuits during the COVID-19 pandemic

In response to the issuance of emergency price gouging regulations, multiple state attorneys general and federal agencies have investigated potential cases of price gouging impacting consumers and agencies. Since regulatory measures vary by state, there is no uniform interpretation of price gouging violations, and it is left to state courts to decide.

Eggs

On August 11, 2020, New York Attorney General Letitia James sued Hillandale Farms, one of the largest U.S. egg producers, for allegedly price gouging more than four million cartons of eggs by increasing prices by almost five times during the pandemic. The lawsuit alleges that the price increases were an effort to profit off of higher consumer demand during the pandemic. To settle the lawsuit, Hillandale Farms agreed to donate 1.2 million eggs to New York food banks.

Personal protective equipment

A Mississippi businessman purchased scarce personal protective equipment (PPE) including gowns, face shields, and masks through his pharmaceutical wholesale company. An indictment alleges that the business then solicited health care providers, including the U.S. Veteran's Association, to purchase the PPE at excessively inflated prices as part of a $1.8 million scheme. This case was investigated by the FBI, Veteran's Association, and Fraud Section of the United States Department of Justice. The charges brought were conspiracy to commit wire fraud and mail fraud, conspiracy to defraud the United States, conspiracy to commit hoarding of designated scarce materials, and hoarding of designated scarce materials.

Economic analysis

Allocative efficiency holds that when prices function properly, markets tend to allocate resources to their most valued uses. In turn, those who value the good the most and are able to afford it will pay a higher price than those who do not value the good as much or who are unable to afford it. According to Friedrich Hayek in "The Use of Knowledge in Society" (1945), prices can act to coordinate the separate actions of different people as they seek to satisfy their desires.

Economists such as Thomas Sowell (Chicago School of economics) in 2004, Donald J. Boudreaux in 2005, and Raymond Niles (Senior Fellow at the American Institute for Economic Research) in 2020 argue that laws prohibiting price gouging worsen emergencies for both buyers and sellers.

In a 2012 survey of leading American economists by the Initiative on Global Markets, only 8 percent agreed with a proposal in Connecticut to prohibit "unconscionably excessive" price increases during severe weather events. Those who disagreed stated that the wording was vague or unenforceable, and that restricting price increases leads to misallocation of resources.

2020 to present

In 2022, Federal Reserve Bank of St. Louis economist Christopher J. Neely said that "most economists believe broad price controls to be costly and ineffective in most situations" because high prices function to "allocate scarce goods and services to buyers who are most willing and able to pay for them, [and] they signal that a good is valued and that producers can profit by increasing the quantity supplied."

A 2022 Working Paper by the International Monetary Fund explores the implementation of windfall profit taxes, which have gained renewed interest following the COVID-19 pandemic, the war in Ukraine, and subsequent surges in energy and food prices. The paper discusses the potential of such taxes as a tool for efficiently taxing economic rents, which are often a result of monopolistic power or unexpected events like pandemics, war, or natural disasters, and contribute to windfall profits. Such profits have raised public and policy concerns about price gouging, where firms are perceived to be profiting excessively from unforeseen circumstances.

In Australia in 2023 and 2024, major supermarket chains Coles and Woolworths received criticism as price gouging, especially in less competitive markets. Coles and Woolworths control 65% of Australia's grocery market.

In March 2024, the Federal Trade Commission accused grocery chains in the U.S. of price gouging. The Commission also sued to block the proposed acquisition of Albertsons by Kroger citing the need for more competition to keep prices down.

A study from 2024 showed that oftentimes when allegations of "price gouging" are made, the profit margins of sellers and vendors is substantially lower than critics believe, such as in the case of grocers recently accused of "price gouging" who actually had a 1.2% profit margin after expenses; with Kroger having their highest profits in the previous 15 years occurring in 2018 at 3%.

The Commanding Heights

From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/The_Commanding_Heights

 

The Commanding Heights: The Battle for the World Economy

Author	Daniel Yergin, Joseph Stanislaw
Subject	Economics, globalization
Publisher	Free Press
Publication date	1998
Pages	488
ISBN	978-0-684-83569-3

The Commanding Heights: The Battle for the World Economy is a book by Daniel Yergin and Joseph Stanislaw first published as The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World in 1998. In 2002, it was adapted as a documentary of the same title and later released on DVD.

The Commanding Heights attempts to trace the rise of free markets during the last century as well as the process of globalization. Yergin attributes the origin of the phrase commanding heights to a speech by Vladimir Lenin referring to the control of perceived key segments of a national economy.

Overview

The authors take the thesis that prior to World War I, the world effectively lived in a state of globalization, which they term the First Era of Globalization. The authors define globalization as periods in which free markets predominate and countries place few, if any, limits on exports, immigration, imports, or information exchanges. Overall, they see globalization as a positive movement that improves the standard of living for all the people connected to it, from the richest to the poorest. According to the authors, the rise of communism and fascism, not to mention the Great Depression, nearly extinguished capitalism, which rapidly lost popularity.

After World War II, the authors note that the work of economist John Maynard Keynes came to be widely accepted in Western economies. Keynes believed in government regulation of the economy, which the authors underline as Keynes' great influence and prestige. The authors consider that the so-called commanding heights were often owned or severely regulated by governments in accordance with Keynes' ideas.

The authors then discuss how the political changes of the 1980s ushered in accompanying changes in economic policy. The old trend changed when Margaret Thatcher became Prime Minister of the United Kingdom and when Ronald Reagan was elected President of the United States. Both leaders parted ways with Keynesian economics and governed more in the tradition of the works of Friedrich Hayek, who opposed government regulation, tariffs, and other infringements on a pure free market and those of Milton Friedman, who emphasized the futility of using inflationary monetary policies to influence rates of economic growth.

In practice, Hayek's policies were applied only selectively, as Reagan's 1986 income tax reforms substantially increased taxes on the lowest quintile of wage-earners but dramatically decreased rates for the upper two quintiles. In contrast to Hayek's ideas, Reagan's policies also continued and expanded tax write-offs, rebates and subsidies for many large corporations. Friedman's monetarism was also abandoned in practice as government-issued debt as a percentage of GDP rose dramatically throughout the 1980s. While Thatcher, Reagan, and their successors made sweeping reforms, the authors argue that the current era of globalization finally began around 1991, with the collapse of the Soviet Union. Since then, they assert countries embracing free markets have prospered on the whole, and those adhering to central planning have failed.

While strongly in favor of this trend, the authors worry that globalization will not last. More specifically, they believe that if inequality in economic growth remains high and if Third World nations are not offered the proper opportunities and incentives to support capitalism, the movement will end just as the first era did. The authors place so much emphasis on narrowing economic gaps because they believe, contrary to many of the people who are interviewed, that there is no ideological support for capitalism, only the pragmatic fact that the system works better than any other, as they remark:

The market also requires something else: legitimacy. But here it faces an ethical conundrum. It is based upon contracts, rules, and choice—in short, on self-restraint—which contrasts mightily with other ways of organizing economic activity. Yet a system that takes the pursuit of self-interest and profit as its guiding light does not necessarily satisfy the yearning in the human soul for belief and some higher meaning beyond materialism. In the Spanish Civil War in the late 1930s, Republican soldiers are said to have died with the word "Stalin" on their lips. Their idealized vision of Soviet communism, however misguided, provided justification for their ultimate sacrifice. Few people would die with the words "free markets" on their lips.

International analysis

In the book, the authors examine briefly many different nations and regions and their economic development since World War II. (In the case of industrialized countries, they often begin before the war.) Admitting that the book cannot touch on every single aspect (Yergin remarks that the topic of their book constitutes an entire new academic discipline), the authors make many assertions.

United States

The robber barons were often condemned in the press, but the United States had much more commitment to industrialization and free markets than did other countries in the late 19th and the early 20th centuries. Unlike many countries after World War I, the 1920s saw great economic expansion for upper-income individuals and a growth in median income. However, labor unrest continued to mount throughout the 1920s and the 1930s because of the lack of wage and hour rules, child labor protections, unemployment insurance, right to organize, workplace safety requirements, and social security, which all continued to exacerbate the discontents of the substantial numbers of working poor.

The Great Depression caused massive unemployment and massive public distrust of corporations and wealthy individuals. In response, the New Deal of President Franklin D. Roosevelt went into effect with massive public support. Many lawyers and economists, influenced by Keynes, worked under the New Deal and believed that free markets would lead to disaster without proper regulation.

The American economy boomed for about 30 years after World War II with the benefit of Keynesianism, robust antitrust regulation to promote competition and financial regulations preventing the most volatile forms of market speculation, high unionization rates and protections promoting the growth of domestic industry. However, during the 1970s, stagflation was brought on by the 1973 oil crisis and the shift from the gold standard to fiat currency, which discredited the policy consensus that was set in place by the New Deal Coalition. Eventually, Ronald Reagan was elected as president in 1980, and many of the statutes and organizations created by the New Deal were dismantled.

United Kingdom

London was the center of the so-called First Era of Globalization because of the power and resources of the British Empire. However, World War I severely weakened Britain, causing massive unemployment. The United Kingdom successfully held out during World War II and emerged victorious, but the war effectively caused the dismantling of its empire.

Winston Churchill was influenced by the work of Hayek and opposed heavy government interference in the British economy. However, the Labour Party, led by Clement Attlee, came to power in force after the 1945 general election and was dedicated to government controls to prevent another economic crisis. The United Kingdom's major industries were nationalized over the following decades (including the Bank of England, electricity, water, natural gas, railways, mining, bus transport, telecommunications, along with large portions of the oil, shipbuilding, aerospace, automotive, and steel industries.

Basic human services such as healthcare and university education were brought under government control and made available for free, while rents in the private housing market were regulated and council housing provided homes for around a third of the population by the late 1970s. Meanwhile, practically all occupations and wages were heavily regulated and unionized.

The practices became so prevalent that even Conservative governments elected after the initial wave of nationalisations in the late 1940s kept them. However, during the 1970s, massive strikes by unions (see the Three-Day Week and Winter of Discontent) and other economic woes, such as the 1973 oil crisis, almost ground the British economy to a halt. Thatcher, an ardent admirer of Hayek, began privatizatizing industries. While her results were initially mixed, the Falklands War brought on a nationalistic fervor that kept Thatcher in office long enough to keep her reforms in place. Even when the Labour Party later came back to power, it did not attempt to challenge the key principles of Thatcherism.

Soviet Union and Russia

Within a few years of the rise of the Russian Revolution, the Soviet economy went into a major crisis. Lenin responded with the New Economic Policy, a program that allowed limited capitalistic activity, which resulted in what he would call state capitalism, and the economy began to improve. Lenin's commanding heights speech was his attempt to defend himself against accusations that he sold out the principles of the revolution by implementing the new policy.

Under Joseph Stalin, the Soviet agricultural and heavy manufacturing sectors were largely centralized. During the 1940s to the 1970s, the Soviet economy grew at a rate that outpaced that of Western European nations.

By the 1980s, however, the Soviet economy was in shambles. Because of a lack of incentives and, ironically, a more tolerant central government, workers did not put much effort into their duties. Nonetheless, the Soviet Union continued to build the military even though at times such spending took up half the country's revenue. Mikhail Gorbachev tried to reform the economy, but he took only limited steps (see perestroika and glasnost). When he lifted the Brezhnev Doctrine and allowed Poland's Solidarity to usurp that country's communist regime, the entire Warsaw Pact collapsed, soon followed by the Soviet Union itself.

However, even with the fall of the Soviet Union and the rise of the relatively free market-minded Boris Yeltsin, former members of the Communist Party of the Soviet Union maintained much power in Russia, blocked free-market movements, and forced the resignation of Yeltsin's free-market allies such as Yegor Gaidar. During the 1996 presidential election, Yeltsin was forced to accept support from Russian oligarchs to counter the growing power of the Communist Party of the Russian Federation. While Yeltsin remained in power, the privatization of industries proceeded extremely unequally.

Germany

As had been predicted by Keynes, the hyperinflation caused by the Treaty of Versailles devastated the German economy and created political instability. In addition to widespread unemployment, the hyperinflation effectively wiped out the country's middle class. That environment made it easy for the Nazi Party to gain power. The authors also argue that the Nazis practiced central planning although industries were privatized en masse.

After the war and the division of Germany, East Germany came under the rule of the Soviets, and West Germany remained part of the Western powers. When economic conditions in occupied West Germany failed to improve, Ludwig Erhard completely destroyed price controls in 1948 without consulting the occupying powers. Western Germany underwent a fast massive economic recovery, but such free-market reforms were largely confined to that country for many years.

By the time of German reunification in 1989, West Germany was an economic power, and East Germany faced many problems because of the collapse of the central planning authority.

India

Unlike Mahatma Gandhi, who supported a village-centric economy, after India's independence in 1947, its first prime minister, Jawaharlal Nehru, promoted industrialization. However, he supported government-controlled development and the bureaucracy that developed stifled innovation. The authors of The Commanding Heights describe this as the British Raj being replaced by a "permit Raj", using a sarcastic term coined by Chakravarti Rajagopalachari. Bribery and delays became common in the Indian economy while many prominent economists studied the country and attempted to finetune its central planning.

By the 1990s, the Indian government began to relax these stringent regulations mainly under the influence of Finance Minister and later Prime Minister Manmohan Singh. The Indian economy bloomed under the effects of exports and outsourcing, and political parties since then have continued to promote those changes. The free-marketer Singh was appointed prime minister when his party won the elections in 2004 although he was not the victorious United Progressive Alliance's stated candidate, and the general expectation was that Sonia Gandhi would take the seat.

South America

Under the influence of dependency theory, a Marxist approach to international economics, many Latin American countries attempted to industrialize by limiting imports of manufactured goods and subsidizing their own industries. However, companies had little incentive to become efficient or innovative in the absence of competition and in the presence of government subsidies. By the 1980s, the economic problems of the countries became obvious, and much of the West's investment was lost.

Chile became an experiment in free markets when Augusto Pinochet called in followers of Friedman to evaluate the economy, the so-called Chicago boys. The authors argue that the economic reforms proved successful, but since Pinochet was a dictator who came to power in a coup and had many political opponents murdered, the whole idea of free-market reform became linked to fascism. Though the authors and Friedman claim that the reforms eventually promoted democracy, they acknowledge that the issue and their interpretation of events are extremely controversial.

Bolivia was hit with hyperinflation as well. During the 1980s, economist Jeffrey Sachs was sent as a consultant and new President Gonzalo Sánchez de Lozada reined in inflation in the 1990s by severely cutting government spending. While Bolivia remained a very poor country, the authors argue that it is better off now because its inflation was curtailed. They also argue that Bolivia's example expunges the bad reputation that free-market economics acquired in Chile as Bolivia's reforms came after a democratic election.

Other countries

The authors argue that Africa's economic development was severely hindered by central planning, socialist ideas, and political dictatorships that promoted warfare and other conflicts.

While Japan was seen for many years as an economic success story as late as the early 1990s, the authors argue that its ongoing recession since then resulted from its governments refusal to stop subsidies to many of its industries and companies (the issue is ongoing).

Poland's free-market reforms pushed by Solidarity and Lech Wałęsa were initially mixed and criticized by its citizens, but by the late 1990s, the Polish economy was doing much better than other former communist states in the Eastern Bloc. One feature of the Polish economy that makes it different from other capitalistic countries is that it is dominated by small business rather than corporations or conglomerates.

China is another major ongoing issue. While Deng Xiaoping, after the death of Mao Zedong, gradually freed the economy, he did not promote civil liberties or other political freedoms, as was demonstrated by his willingness to crush pro-democracy demonstrators. While the authors hope according to Friedman's ideas that free markets would eventually promote a free society, it has not yet happened although China's economy continues to grow.

Documentary

In 2002, PBS aired a six-hour documentary based on the book. This documentary was later sold on DVD and is available to view for free at PBS's website. The documentary is narrated by David Ogden Stiers.

The documentary series consists of three, two-hour episodes:

• Episode 1: The Battle of Ideas Produced and Directed by William Cran.
• Episode 2: The Agony of Reform Produced and Directed by William Cran, Co-Producer Peter Sommer, Co-Director Greg Barker.
• Episode 3: The New Rules of the Game Directed, Written and Produced by Greg Barker.

Appearing several years after the book was released allowed the documentary film to address many of the items that Yergin and Stanislaw missed in their original book, including the collapse of Asian economies, the anti-globalization movement and the September 11 attacks. All told, two of the documentary's six hours (the entire final third) address things that happened since the original book was published. They also include free market solutions to international poverty that were not included in the book, and they interview economist Hernando de Soto, whose book on the subject was not published until after the initial printing of The Commanding Heights.

Like the book, the documentary attracted more support and criticism. One example is the anti-globalization movement, which argued they were portrayed unfairly. In the documentary, James Wolfensohn, then President of the World Bank, is interviewed and says that such protesters are attacking people "who are devoting their lives to addressing the very questions that these people claim to be addressing". The documentary includes a scene of Wolfensohn getting hit in the face with a pie by a protester.

In contrast to the book, the PBS documentary is more wary of the possible end of the current era of globalization. For example, they include a parallel between radio stocks of the 1920s and dot com stocks of the 1990s: both were industries built on new technology that had little capital, but fell prey to a market bubble. Likewise, the documentary makes a comparison between the terrorist attacks of September 11, 2001 and the terrorist assassination of Archduke Franz Ferdinand in 1914. Venture Capitalist Tim Draper appears in the third episode and speaks about his success at the time with Hotmail for email and other early internet investments. This was many years before Draper would go on to invest in many other successful tech companies of the 2000's, including Tesla, Coinbase, and even a large purchase of Bitcoin from a sale of the cryptocurrency after the fall of the Silk Road after 2013.

The production was financed by donations from Electronic Data Systems, FedEx, BP, The Pew Charitable Trusts, John Templeton Foundation, Smith Richardson Foundation, and the Corporation for Public Broadcasting.