By Dr. Brooks Robinson\Black Economics
Photos: YouTube Screenshots\Wikimedia Commons
This essay is a late entry. We had planned to feature an essay entitled “Kamala’s ‘Last Straw’ Drama,” which discusses the extraordinary drama now underway that is entertaining the American Public. The drama provides a cover for oligarchs and plutocrats to move stealthily to further diminish democracy and the economic power of the nation’s least and not so least of these.[i]
We begin consideration of this essay by noting that the most recent decade-long push for Reparations initiated by TaNehesi Coates’ article entitled, “The Case for Reparations,” forced to the surface innumerable and seemingly unending findings concerning how non-Black Americans have exploited Black Americans economically throughout this nation’s history.[ii] This essay recognizes a new method of exploitation. Fortuitously, this recognition comes at a time when Black Americans are poised to make an important political economy decision by helping determine the nation’s leadership, which will affect our ability to navigate future economic life successfully.
It is appropriate to pause and extend credit to a new colleague, who has joined in efforts to implement the Long-Term Strategic Plan for Black America (LTSPFBA). Mr. Ra Oginga is an entrepreneur, who has completed post-graduate training in business and finance. He is focused on helping implement economic and business aspects of the LTSPFBA. Recently, he reminded us that, although the plan presses for more independence, self-sufficiency, and self-determination for Black Americans, it could have been more emphatic about the need to simultaneously prevent any diminution in Black America’s current position in the US economy, and to advance that position to enable our shift to a more independent state.
Undoubtedly, Mr. Oginga is correct. Fortunately, Black America now has an opportunity to ensure the latter outcome. How? A prioi, you may think that the best strategy is to ensure that Black Americans vote for the Democratic or Republic Presidential Candidate, who espouses policies that are most favorable economically for Black Americans: e.g., Increase and expand our educational and training opportunities; enable access to more financial capital for entrepreneurship; ensure equal employment opportunities; ensure access to social benefits that facilitate our participation in
the economy; etc. We check that thinking with a reminder that oligarchs and plutocrats drive the nation’s economic policies. Therefore, irrespective of the candidates’ promises, in the end, they and members of the Congress, who are also beholding to oligarchs and plutocrats, can only implement policies that are not opposed vigorously by the latter.
So here is the rub. Given media coverage of the running political drama, you are certain to know that Kamala Harris recently raised $200 million overnight for her campaign—outstripping by far Donald Trump’s take during the same period. Which industries, firms, and personalities have been most notable in their contributions to these campaigns? Is it not logical that the high-stakes contributors (to ensure their leverage and power) would be those with the most financial resources? So, given market capitalization, which firms and personalities are known to be at the top of the
list—the “trillion-dollar corporations?” The answer is easy: The list includes innovative technology companies that are prolific developers and employers of Artificial Intelligence (AI).
What do we know about AI? Not enough! However, what has been widely expressed since the preemergence of AI is that it would be job reducing, with a potential to produce certain new industries and some new employment opportunities. And so, we should ask: At this stage in Black America’s economic development, is AI Black America’s friend? Should Black America be fully in bed with a candidate, who supports maximum exploitation of AI because of its economic efficiency enhancing properties? And how will we know whether the latter could be true? Why not use the amount of campaign contributions received by a candidate from technology firms that produce and thrive on AI as a metric for the candidate’s beholdingness to AI masters?
Now for the final points about how all this ties into the egregious economic exploitation of Black Americans and how we should not choose to facilitate our own demise. Jon Healey of the Los Angeles Times recently wrote about how many consumers are being exploited.[iii] He uses an economic term about which we were unfamiliar: “Surveillance Pricing.” The term is just a fancy way of referring to an old economic concept: “Price discrimination.” The worst form of price discrimination from consumers’ perspectives is “perfect price discrimination.” In plain and simple language, the term means that a producer/seller of goods or services can maximize revenue by charging each customer/client a different price. To be able to achieve the latter outcome, the producer/seller must be able to differentiate between or discriminate against each buyer. In today’s world, how is it possible to easily differentiate and discriminate? It is part of the power and wonder of AI. At bottom, AI-enabled price discrimination helps producers/sellers identify each consumers’ highest willingness to pay amount and to set the price accordingly.
The popular saying, “information is power,” is inaccurate. It is the wise use of information that inures power. The gathering, buying, and selling of information in today’s computerized, technological, and AI world is ubiquitous, and it enables precise differentiation, discrimination, and exploitation of economic agents. However, history advises Black Americans that the ability to discriminate has always been used to harm us more than all other racial and ethnic groups in the nation. In simplest terms, racial discrimination has permanentized economic inequality, which causes many Black Americans to suffer, while others benefit at our expense. Mr. Healey explains in his article that the US Federal Trade Commission (FTC), which operates within the U.S. Department of Justice, is beginning to explore how AI is used to practice price discrimination. Historically, price discrimination has served as an indicator that “antitrust” laws are being violated. The FTC’s action is long overdue! We began exploring price discrimination somewhat intensively over three years ago.[iv] Our 2023 submissions concerning this topic discusses how the nation’s airlines may be using AI-enabled price discrimination to maximize their bottom lines.[v] Unfortunately for consumers, as the 2023 submission conveys, major US airline companies have largely escaped regulation. However, it seems reasonable that the US Department of Transportation (DOT) should pursue this issue with airline companies. The DOT has the authority to enforce violations of antitrust laws by US airlines.[vi]
What we know is that AI is being used to harm many consumers through firms’ price discrimination practices. History tells us that Black Americans may very well be the group harmed most by these practices. Therefore, we are warranted in our scrutiny of presidential candidates, who are receiving contributions from mega technological firms that produce and/or leverage AI extensively. We call on Black Americans who have the ears of these candidates to not pressure a promise to halt AI use, but to invite these candidates to state unequivocally that they will do everything within their power to push back on firms that are already using, or who plan to use, AI aggressively to their benefit at the expense of Black American economic agents. Black Americans can least afford to be subjected to further economic exploitation via price discrimination. Therefore, we should make every effort to ensure that AI’s many powers are not levelled against us to reduce our economic wellbeing.
But we are not helpless! We can act on our own behalf! Black economists and entrepreneurs must begin to teach Black Americans broadly how to avoid the pain imposed by price discrimination
that is enabled by AI.
References:
[i]We may publish this essay at a later point. However, if you prefer to receive it immediately, then please request it from BlackEconomics.org.
[ii] Ta-Nehesi Coates (2014). “The Case for Reparations.” The Atlantic. https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/ (Ret. 080124).
[iii] Jon Healey (2024). “What is ‘surveillance pricing,’ and is it forcing some consumers to pay more? FTC investigates.” Los Angeles Times, July 23rd. https://www.latimes.com/business story/2024-07-23/ftc-investigates-surveillance-pricing-ai-data-mining (Ret. 080124).
[iv] The following are the titles and dates of BlackEconomics.org submissions that feature or include discussions about Black Americans facing different prices than nonBlack Americans: (1) “A Black CPI” (February 25, 2021); (2) “Cherry Picking the SS COLA and More” (May 21, 2021); and (3) “De-Dignification and Economic Exploitation of Black of Black Americans” (September 9, 2023). These three submissions are available on the www.BlackEconomics.org website.
[v] See the last entry in endnote iv.
[vi] Consider the following article that discusses the DOT’s antitrust enforcement powers: Jonathan Edelman (2021), “Reviving Antitrust Enforcement in the Airline Industry,” Michigan Law Review; Vol. 120; No. 1, pp. 125-55. https://michiganlawreview.org/journal/reviving-antitrust-enforcement-in-the-airline industry#:~:text=Antitrust%20Enforcement%20Within%20the%20Airline,airline%20industry%2C%20not%20the%20FTC. (Ret. 080224).
