Comment on Shrinkflation is out of control

silvercove@lemdro.id ⁨10⁩ ⁨months⁩ ago

• twei@feddit.de ⁨10⁩ ⁨months⁩ ago

  This is the result of company greed

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  • drphungky@lemmy.world ⁨10⁩ ⁨months⁩ ago

    Literally just copy pasting this places now because so many people are still claiming greedflation is a thing. Not trying to spam but links to comments don’t seem to work, and as a literal economist who works on inflation I’m tired of reading political talking points disguised as economic analysis.

    I think everyone should probably listen to this great report from NPR that dissects this issue. The Tl;dr: is greedflation is not really a real thing.

    The deeper answer to your question of, “can one party increase prices in a market?” is sort of basic economics, and the answer is, “Usually, no.” In a competitive market, the answer is no. In a monopolistic market (meaning one company controls most of the market, think like Google with browsers) with no government oversight, the answer is yes. Things get complicated when you add in government regulation or oligopolistic markets (markets where only a few players control the market). In those cases, it depends on how strong government regulations on price-gouging are and any anti-monopoly or anti-anticompetitive practice laws are, and also depends on how oligopolists behave. Sometimes, particularly in industries with few big players, the big players will make the same decisions independently. If they do this cooperating it will usually violate antitrust laws, but if they both decide they’ll be better off say, not paying workers as much, or charging super high markups, them that can happen. A lot of economic research shows that kind of “tacit collusion” happens in real life, like in the oil and gas industries. But other times oligopolies will behave very competitively, only uniting through lobbyist trade groups if at all (think Microsoft and Amazon in cloud software).

    So that’s the facts, but here’s my economic musing: The reason it feels like greedflation is a thing is a combination of factors:

    1. Inflation was very real, and very salient.
    2. Corporations (as mentioned in the NPR piece) crowed about their “record profits” in the short term, and also mention them when they are absolute record profits, not just record profit margins (something not mentioned but very real - a company can make twice as much money but also have spent twice as much, making way “more” money but with identical margins)
    3. In the US at least, we are seeing the highest numbers of industry consolidation and monopolies/oligopolies since the Gilded Age, so it feels like companies should be able to raise their prices if they want to.
    4. Media coverage and online spaces have become extremely polarized, so “corporations bad” is a very easy refrain to find if you’re watching or reading anything remotely left-wing, and it has been parroted by many democratic politicians as well, because it scores cheap and easy political points (also, and this is just my opinion, it helps vilify corps more in the public eye to help get more support for better antitrust legislation and enforcement, the actual end goal. I don’t think senators like Bernie Sanders don’t actually understand what’s going on with profit margins, I think they’re using it to generate political will, but that may be my own bias creeping in).

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    • theneverfox@pawb.social ⁨10⁩ ⁨months⁩ ago

      Greedflation isn’t really a thing

      describes the mechanisms and reality of greedflation

      Why do stating profits vs profit margins matter? On that note, what do you think sounds better in an announcement to the general public - “we made record profits”, “we increased our profit margins by shrinkflation and charging more”, or both? I’d argue the first - if they cut costs or increased sales that would be worth bragging about, but charging more isn’t something you really want to directly call attention to

      Why does collusion vs tacit agreements matter? Consolidation of industries and regulation is why it’s possible and is very relevant, but doesn’t address the core question

      Ultimately, groups of humans behave differently than the individuals they’re made up of. Sometimes they even do things no individual member wants to happen - market forces are in this category of emergent properties.

      You seem to think greedflation is a bunch of cigar smoking men in a room saying “there’s a war on boys, what say we jack up prices again?”

      It’s about what companies are doing, not individuals. Companies are using the little ripples in the supply chain from every global problem to ratchet up prices in sync, and there’s not enough regulation or competition to make them lower them back down.

      That’s what greedflation is - companies being greedy in sync across an industry,

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      • drphungky@lemmy.world ⁨10⁩ ⁨months⁩ ago

        Did you listen to the NPR report? I don’t understand how you still have these questions.

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• squiblet@kbin.social ⁨10⁩ ⁨months⁩ ago

  If you mean Ru vs Ukraine, the for-profit cost gouging for groceries disguised as 'inflation' began prior to that.

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• Professional_Human@lemmy.world ⁨10⁩ ⁨months⁩ ago

  What war?

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  • downpunxx@kbin.social ⁨10⁩ ⁨months⁩ ago

    the war of the roses. very costly.

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    • Ertebolle@kbin.social ⁨10⁩ ⁨months⁩ ago

      "I would like you do us a favor, though" - Earl of Warwick, probably

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  • silvercove@lemdro.id ⁨10⁩ ⁨months⁩ ago

    the one in Ukraine

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    • Ertebolle@kbin.social ⁨10⁩ ⁨months⁩ ago

      Yeah, my grocer has been sold out of Ukrainian Salmon for months, only kind they've had in stock is Hungarian Salmon and that's got way too much paprika on it.

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    • Professional_Human@lemmy.world ⁨10⁩ ⁨months⁩ ago

      we sent all the fish to Ukraine 😢???

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• jabberati@social.anoxinon.de ⁨10⁩ ⁨months⁩ ago

  @silvercove @NarrativeBear 3% of the US military budget?

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  • silvercove@lemdro.id ⁨10⁩ ⁨months⁩ ago

    Two of the largest agricultural producers in the world are fighting. Food prices will rise.

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    • grue@lemmy.world ⁨10⁩ ⁨months⁩ ago

      Well shit, if that’s the point you were trying to make – as opposed to regurgitating the tankie talking point dishonestly trying to imply that US government spending supporting Ukraine is causing inflation, which is obviously what everybody’s downvoting you for – you should’ve just come out and said it to begin with.

      The idea that food prices are rising and it’s Russia’s fault for disrupting supply is a much more reasonable assertion than the way you were spinning it before.

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      • drphungky@lemmy.world ⁨10⁩ ⁨months⁩ ago

        I have literally never heard that described as a tankie talking point. Honestly, shouting down the fact that Russian aggression caused global prices to rise in everything (not just food, oil and gas causes ripples) feels like something their psyops people would do. Trying to tie it to US aid and calling it a tankie talking point is double plus hilarious. I don’t know where you’re reading that, but I’d be careful.

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    • WarmSoda@lemm.ee ⁨10⁩ ⁨months⁩ ago

      How much wheat is usually in salmon?

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      • nrezcm@lemmy.world ⁨10⁩ ⁨months⁩ ago

        You’re still eating salmon that contains wheat? Come on and get with the times. You need to be eating gluten free salmon it’s much better for you.

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      • silvercove@lemdro.id ⁨10⁩ ⁨months⁩ ago

        salmon does not get priced independently from all other foodstuffs

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