Capitalism Means Policing Big Companies

Elliot Temple
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Video summary: A company selling cake mix reduced the amount of dry ingredients in a mix they had been selling. (It’s not a new product, and no features of it changed except for subtle graphic design elements of the box and the weight of the dry mix.)

With pre-made cake mix, you add your own ‘wet’ ingredients (oil, egg, milk). The company reduced the amount of dry mix in the box, but still recommended that you use the previously recommended amounts of wet ingredients, so the recipe is actually different. The proportions of dry to wet ingredients has changed. They changed the recipe.

Is this fraud?

Some people use this cake mix for their own businesses. It’s incorporated into recipes they’ve made.

The girl in the video makes a good point. It seems like something that a company would do that was trying make people who regularly purchase it not notice the change. They didn’t reduce the amount of recommended wet ingredients by the amount that they were reducing the dry ingredients so that the original recipe was kept to. They have kept the original amount of recommended wet ingredients.

New customers aren’t going to know about or be affected by this change. They are just going to get a cake mix and follow the recipe.

So I think the question of why did they decide to not reduce the amount of recommended wet ingredients is important. Why would they do this?

  • To help deceive existing customers
  • Existing customers might be used to putting in the wet ingredients (they might not read the box anymore because they know how much they have to put in already). So they just kept the wet ingredients the same so no one was confused.
    • This has backfired though because the regular user in the tiktok has noticed, and has to make adjustments now.

So I think the question of why did they decide to not reduce the amount of recommended wet ingredients is important. Why would they do this?

Actually, if fraud is not about intent, but about the fact of obtaining material values under false pretense, then why they decided to do this isn’t important. What’s important is whether they’ve got money under false pretense.

So, their product and recipe changed. Regular customers rely on the recipe and product. Were these customers informed in any obvious way that the product had changed? (Like with labelling on the packet?) no. It was done surreptitiously, and they seem to have also put effort into hiding the fact that the recipe changed (like keeping wet ingredients same as before.) In the absense of this labelling, and with the wet ingredients not changing, is it reasonable to expect that the product you’re getting hasn’t changed? I think so. But did it? Yes.

Is it reasonable as a customer to expect that you’d be notified, or it made ovbious to you that a product you buy regularly has changed? I think so.

Seems like fraud to me.

But is it fraud, or a creative adversary not initiating force? A creative adversary uses creativity to manipulate your behaviour without forcing you. They don’t seek mutual benefit, and appeal to your reason, they seek to exploit weaknesses of yours to behave in a way beneficial to them yet not force you. An example is a casino putting lots of effort into psychological research for a higher chance of getting you hooked on gambling. What would that look like in this situation? Not sure exactly, I can’t see how this situation resembles that. It seems more fraud-like.

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Yes, so this at minimum makes them creative adversaries. Putting creative effort into preventing consumers from noticing something (that many consumers would probably like to notice) is, at least, an adversarial action. It’s working against the consumers instead of trying to be cooperative and helpful with them.

One can be a creative adversary without using force or breaking laws. But being an adversary is a red flag that maybe force or unlawful behavior is involved. Force and unlawful behavior are uncommon when people are cooperative not adversarial.

A lot of the purpose of laws and rights in general is to limit adversarial behavior to not go too far, so e.g. insults are allowed but punches or defamation aren’t. Defamation is sort of a subset of insults that says which insults aren’t allowed: you aren’t allowed to insult people if your insults include lies about facts. The interpretation of this is actually complex, for example the insult “You’re hella fat!” is legally allowed in most contexts where the person isn’t fat, even though it seems to be making a false factual statement.

@Eternity this may interest you

Here are some prompts for further analysis for @lmd which involve mild spoilers about my analysis:

They changed the weight and labelled the weight change but didn’t draw attention to it. Lots of products do that, so one thing to consider is whether there’s anything different in this case compared to other cases. Like imagine a box of crackers, bag of frozen corn, can of soup or jar of tomatoes reduces the amount a bit and labels the weight change without drawing attention to it. 1) Do you think that’s just always fraud? 2) Is there anything worse about the cake mix change compared to those others?

A related issue is ingredient changes. If you try to avoid certain ingredients, like gums and seed oils, and you read ingredient labels a lot, you’ll discover that companies change recipes sometimes. You have to keep reading the labels of the same products you usually buy, every time if you’re being very strict, because sometimes they add gums or seed oils. They don’t highlight this with obvious labels like “now with guar gum!”. They also remove this stuff sometimes, also often without announcements, so you have to reread product labels you don’t buy sometimes if you want to find more options to buy. They do call out changes or avoided or included ingredients in special cases like “gluten free”, “with real fruit juice” or “now 20% bigger” when they’re trying to get the consumer to notice. I don’t think they’d usually say “now gum free” though because of the negative implications about their past products; they’d probably just say “no gums” or say nothing. For gluten free, they usually make a new product with no gluten rather than turning an existing product gluten free since that often involves major recipe changes, but there are cases where it could involve quite minor changes, in which case they might add high-visibility “gluten free” branding but I wouldn’t expect a “now gluten free” announcement. BTW if a product doesn’t say “gluten free”, but has no gluten, I think they might add gluten in a recipe change without warning you, whereas if you’re buying a product that advertises “gluten free” you’re safer regarding it being changed without you noticing since the gluten free aspect is an intentional, marketed part of the product instead of something incidental.

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I don’t think that it’s always fraud to reduce the weight of an item. Similar to how I don’t think it’s always fraud to change the price of an item. You do have the responsibility to consider what you’re purchasing.

There is something I don’t like about it though. I think the companies price point for their goods is probably well considered to get the kind of demand and sales they’re hoping for. I think just reducing the quantity and charging the same price, in the hope that the market doesn’t really notice (so your competitive state in the market doesn’t change much), is adversarial. I don’t know if that’s whats happening though. I’ve heard the term ‘shrinkflation’ recently which means responding to inflation with reduced quantities instead of increased prices. The idea there is to maintain the price. That seems adversarial. It sucks that businesses are put in that position by the government though (who, afaik, are the sole cause of inflation).

The cake mix change seems to have been adversarial. They seem to have put effort into hiding the fact that the recipe has changed. I think it’d be less adversarial to just raise the price of the cake mix. It could also have been incompetence/ignorance with regard to their own product.

So, arguably we have some adversarial behaviour in both cases. So two red flags.

I didn’t consider whether they also changed the dry ingredients recipe. Maybe the recipe was changed so that it was somehow equivalent to the previous, higher weight one? Or maybe it was just changed for other reasons, and it resulted in a lower weight? Don’t know.

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This is something we disagree about that we could potentially debate. What do you think?

When a bag of cookies has its weight reduced, you get fewer cookies, but each cookie is the same as before. This is how it works with most products.

When cake mix has its weight reduced (without a recipe change), it changes the cake you get. You don’t just get less cake. You get a different cake with a different texture.

The company labelled the lower weight, but did not label the change in cake.

So that’s a way this is different than most weight reductions.

What might happen next if one person in a family notices?

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I posted on Reddit:

We don’t have a free market.

In an actual free market, Walmart would behave totally differently, or else its executives would go to jail and it’d go bankrupt from the money it lost in lawsuits.

Capitalism is premised on the rule of law. The ideal free market includes law enforcement to prevent aggressive force, including: violence, threat of violence, fraud, false advertising, breach of contract, and property rights violations. Walmart, like approximately every mega corporation, does a lot of those things. And its executives do it intentionally, negligently and/or recklessly, so they’re guilty of breaking the law.

I don’t actually know what’s going on with the “dead peasant insurance” – is Walmart profiting off that or losing money off it? In general, insurance is for risk mitigation, but Walmart has such a large workforce and so much money that it doesn’t need to use insurance to mitigate the statistically predictable fact of some of its workers needing to be replaced (much more often because they quit rather than die). Insurance is normally for disasters, but a dead peasant isn’t a disaster for Walmart. If Walmart is actually profiting off this insurance, that suggests the insurance company is losing money on this deal, which raises the question of why it’s participating. But whatever is going on with this particular example, Walmart does plenty of other illegal stuff.

I know that many other Objectivists and “pro-capitalists” shill for big companies like Walmart. They should remember that our society doesn’t have the capitalist system that Ayn Rand advocated and pay more attention to the many flagrant violations of the non-aggression principle by large companies.

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Maybe they’ll tell the others in the family and change their buying habits. They’ll need to buy more packets of cookies if they want the same amount of cookies as before, or they’ll need to have less cookies if they want to spend the same amount as before. So:

They could buy more next time
They could ignore it, and have less cookies
They could change brand
They could make a tiktok about it
They could show people on the internet in general
They could tell friends

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I typed up this reply yesterday but for got to post it:

Yeah agreed. That is adversarial.

Interesting, I hadn’t thought about it like this. I hadn’t noticed explicitly the common adversarial nature that underlies these two things i.e fraud and creative adversaries who don’t initiate force.

Have you considered finding a term for the concept of creative adversaries who don’t initiate force?

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Yes okay, I agree. I did know the cake was different. Somehow I made that question harder for myself. Perhaps I just got lost, and didn’t reconsider the question asked. I wasn’t just thinking: what are differences, if any, between just changing the weight of an item, and changing the weight of a cake mix?

You asked if there is anything worse about the cake mix compared to just changing the weight. That first requires deciding what the difference is, and then judging whether it’s worse/better/the same. Okay cool i see where I went wrong.

So is changing the weight of a cake mix worse than changing the weight of cookies? Yes. It’s a qualitative change in cake, as opposed to a quantitative change of cookies. You’re getting a different product.

I would consider changing the weight of dry ingredients changing the recipe. They kept the wet ingredient quantities the same as the previous recipe, but by changing the dry ingredient amounts, they changed the recipe. I don’t think the result would be a different cake without having a different recipe. I think the recipe change is hidden from the customer by keeping the wet ingredients the same.

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PayPal Honey is being sued by YouTubers. I watched a video which talks about the lawsuit.

@Eternity you might want to do something with this topic. up to you.

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I’m going to stop blurring this cake mix topic now. @eternity can avoid reading stuff if he wants.

There are some other things that might happen.

First, suppose they decide to change their buying habits. What might happen next? Are there any scenarios where changing fails and they end up sticking with the original product anyway?

Second, if 5 ppl eat something they’ve had lots of times, and 4 thinks it tastes normal and good, and 1 liked it in the past but doesn’t like it now and speaks up … what are some reactions they might get from the other 4? If that’s not enough of a hint, consider who notices the issue and that may help you imagine ways they may be treated. e.g. what if it’s the 6 year old kid?

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Policing big companies when they put binding arbitration clauses in their terms of service is problematic.

The video shares a story. A Harvard lady started being an arbiter. She ruled in favor of business a few times. Then she ruled in favor of the consumer, once, against a credit card company. Then the arbitration provider stopped sending her more cases, and also lied to some people that she had a scheduling conflict to remove her from some cases.

The video claims that in some years more people are struck by lightning than win arbitration cases against companies.

It says one of the main points of arbitration is to keep discovered documents secret. (I think it also limits the amount of discovery.)

Another goal is to avoid establishing legal precedents and avoid class action lawsuits. They want to make each consumer have to prove their case independently without reusing effort and outcomes.

If arbitration were really a fair way to handle cases more efficiently, consumers and companies would often voluntarily agree to it for handling smaller disputes, with no need to bind people to it in the terms of service.

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I intend to watch that video soon, but a thought occurred to me: at work I’m required to agree too arbitration. I wondered if the Starbucks app itself required arbitration. So I looked at the TOS and it sure does. Starbucks® Rewards Terms of Use: Starbucks Coffee Company :

These Terms of Use include an arbitration agreement that governs any disputes between you and us. In arbitration, there is less discovery and appellate review than in court. This arbitration agreement and other provisions will:

  • eliminate your right to a trial by jury to the extent allowable under applicable law; and
  • substantially affect your rights, including preventing you from bringing, joining or participating in class or consolidated proceedings in arbitration and litigation.

I wonder if this relates to disputes as a customer who uses the app. So does this mean if I order through the app/use the app for reward points any future conflicts with Starbucks will end in arbitration “to the extent allowable under applicable law”.

Hmm. That sucks. Going off the assumption that arbitration kinda sucks. The only way to fully protect your right to sue a big company is by not using their app. Wack.

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Contract terms to eliminate jury trials and class or consolidated legal proceedings seem really problematic for general, widespread use, especially with the general public/consumers.

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Some of the video’s claims seem to be disputed. Here’s an article claiming consumers and employees do better on average in arbitration than in court.

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Yes I think so: they might try to change but not find something they prefer to the changed product. And if they still don’t like that they could end up buying more so they could make it like the old recipe, like the woman in the tiktok said she might have to do.

  • the 1 person might get ignored and the 4 don’t look into it at all - result: the family keeps buying it
  • they might look at the box and agree with the 1 person that it’s different, but the 4 might think that it’s not worth changing buying habits if they didn’t notice and they think it tastes fine anyway - result: the family keeps buying it
  • the 4 might attribute 1’s opinion to thinking the person who made the cake making a mistake, and not the cake mix, and consider the 1 person rude for bringing it up. The issue is dropped by the 1 person cos of the confrontation - result: the family keeps buying it
  • they might think that 1 is being pedantic and picky

[after viewing spoiler] Yeah if it’s a kid, they might be told they’re ungrateful or being spoiled or something. Their opinion also might rank less with the others. They wouldn’t have the means to do much problem solving about it themselves (like researching the other products online or in store, or doing the math on explaining the difference in the new cake mix). So they might have to drop the issue, and the family keeps purchasing.

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Yeah. The main theme there is being dismissive.

So the company doesn’t necessarily need to make small enough changes that no one notices. If only a few people notice, then most of them may be dismissed if they try speaking up about it. So things are easier for the company than it may initially seem like.

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So is the cake mix change fraud? I’m not sure.

There are some other ways to look at it that I like to consider.

Would Ayn Rand’s heroes do it? No.

Would Ayn Rand’s villains do it? Yes.

Would it be common behavior by successful companies in an ideal free market? No. It’d be a competitive disadvantage and major risk of alienating consumers if they find out. Some of the other companies would treat consumers better and consumers would like that. One thing I can imagine happening is one of the better companies calling it out and drawing consumer attention to it. This could be done by a competitor, a news company, or a company focused on product/company reviews/information.

Also, complaints about such things can go viral pretty easily on social media today. If this kind of bad behavior was more uncommon, and a lot of companies were better, then I think it’d go viral more easily at least for large companies: people would really want to know if one of the big, popular companies was actually bad. In the real world, all the big, popular companies kinda suck, so finding out one sucks isn’t very informative. In a world where 50% of the big, popular companies sucked, and 50% were awesome, it’d be really practical and useful to find out which ones sucked and switch to buying from the awesome ones. So it’d be easier to spread that kind of information.

Today, boycotting companies for doing bad things has a lot of difficulties. Picking a couple companies doesn’t make a lot of sense when their competitors aren’t clearly better. But boycotting every big company is super inconvenient – and realistically not enough people will do it for it to be very effective. In a world where there were a lot of good, large companies, then boycotting the bad companies would be way more realistic since you could just buy from the good companies.

Another issue with this kind of cake mix change is you alienate your good employees: the smart ones, the potential whistleblowers, the ones with integrity, the ones who want to do good work. In the real world, it’s hard for those good employees to find good companies to work at. But in a better world with some good companies and some bad companies, the bad companies would lose a lot of their better employees to the good companies.