The term “Shrinkflation” refers to an economic phenomenon where Economic Organizations attempt a cost-cutting measure where the size of finished goods is reduced due to Currency Depreciation. It is an accurate term to demonstrate how production processes cost manpower and resources to yield the finished product. I say “Economic Organizations” rather than “privatized commercial firms” because I can envisage a similar situation occurring under the Work-Standard. Instead of scaling back the production process, one possible response is to retune it by making it more efficient from a fiscal standpoint. For as the saying goes, one cannot make an omelet without cracking a few eggs.
One of the problems with Shrinkflation, as one might expect, is whether this cost-cutting measure is an acceptable compromise for both the Economic Organization and whoever needs the finished product for their own economic activities. From the perspective of somebody purchasing a product at a Department Store for instance, the mere appearance of a slightly smaller finished product creates a depreciation in the Value of that same product. In essence, the customer is left with the impression that their own Currency is less capable of purchasing what it used to prior to the onset of Currency Depreciation. Conversely, the Economic Organization may be forced to cut corners, thereby reducing the Quality of their Arbeit. Any reductions in the Quality of Arbeit may impact their overall performance over the long term under the Work-Standard.
The other problem pertains to concerns over whether the Shrinkflation can be justified by both the Economic Organization and its customers. In the wake of the Coronavirus Pandemic, there have been suspicions among some people that privatized commercial firms are deliberately resorting to cost-cutting measures that significantly reduce the size of each finished product. Something used to have been larger prior to the Pandemic and it only required making a single transactional sale. After the Pandemic, however, the product is now smaller to the extent that it may require one and a half transactional sales instead of just one.
The Shrinkflation which I am referring in this particular context is happening not just in America, but in various countries across the Empire of Liberty. Entire products have noticeably shrunk as a result of production processes being scaled back, coinciding with significantly increased Prices. Customers purchasing those products have been and are continuing to be left with the impression that their Currencies are suffering from diminished purchasing power. This results in them spending far more Kapital in everyday goods and services of reduced Quality and Quantity.
Speaking of the Quality of Arbeit, it is significant that aspects of Shrinkflation are occurring in contexts where the Quality is affected. This phenomenon is referred to as “Skimpflation.” An example is the Quality of olive oil production, which has seen reductions in the past year. Rather than create a bottle of olive oil that contains pure olive oil, the response to Shrinkflation has been to reduce the Quality by diluting the olive oil with filtered water, resulting in changes to taste. Of course, it really depends on who is doing the taste testing, including whether they have two bottles from the same manufacturer.
Just over one in five consumers say they’ve noticed ingredients changing, but prices not budging (a.k.a. skimpflation).
Even though skimpflation can be hard to spot unless you are in the practice of, say, religiously reading the ingredient list on every item in your cart, 22% on average across 33 countries say they’ve seen the practice.
The French are très passionnés about food. So, it makes sense eagle-eyed shoppers in France have spotted changes in the products they love.
Granted, a lot is constantly being written about Shrinkflation in connection to economic life following the Coronavirus Pandemic. I am convinced that what is being empirically observed in the Market/Mixed Economies of different countries should be interpreted as supportive evidence of an aforementioned disconnect between Market/Mixed Economies and the Fractional-Reserve Banking Systems. Remember, Central Banks have yet to bring the Inflation/Deflation Rates of Liberal Capitalist nations down to their preferred rates of 2%. Anything like 3% or 4% is less than ideal for their own purposes. It is possible that the Central Banks are hesitant on lowering Interest Rates to what they were in the wake of the Great Recession, when it became mundane in 2010s to have Interest Rates around 0% or into the negative as in the cases of some countries. There remains that fear that, if Interest Rates were back to their levels from the 2010s, the Inflation/Deflation Rate is going rapidly increase, resulting in further Currency Depreciation and more signs of Shrinkflation (and by extension, Skimpflation).
As far as the Work-Standard is concerned, what I must address at some point in the future is how a Council Democracy should inform everyday people that the Quality of Arbeit is being affected due to Currency Depreciation. The Central Bank of a Reciprocal-Reserve Banking System is going to let the entire Totality know. The real question is how best to convey that news, reassure the Totality that it will be a temporary setback, and to provide the necessary steps to cope with that setback until things return to a state of normalcy.
Categories: Economic History
The Fourth Estate 
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