Last Friday, Jeff Deist and I discussed the difficulty of really comparing the current standard of living to those of the past. During the interview, I mentioned Jeffrey Herbener’s discussion with Tom Woods about the CPI, the use of hedonic adjustments, and changes in the standard of living overall. Anyone who enjoyed Friday’s interview may also like Herbener’s detailed discussion of price inflation estimates and related issues.
The overall conclusion is that there are undoubtedly ways that our economic lives are improving. There are also ways that it is getting worse. The question is, how to these two trends balance?
Woods notes that libertarians often rebel against discussions like these, as it is assumed that with so much government intervention in daily life, it must be obvious that we’re getting poorer. But, as Woods and Herbener note, it’s not that easy:
Woods: Maybe it’s the case that the market economy is so resilient, that it can still generate results under the influence of a substantial state apparatus.
Herbener: Yes, absolutely, We Have a bifurcated economy, where the government heavily interferes in healthcare and education where we see quality and declining and prices going through the roof. And then sectors of the economy where the government is basically hands off, and there we see quality improving, prices going down, we see the normal capital-accumulation, technical-innovation process of the market.
