I remember when chocolate bars cost 10c and were bigger than today. I vividly remember pumping petrol into the car when it was 35c a gallon (7.7c per litre). Did the farmers who harvested the chocolate/milk/etc, the company that produced the chocolate bar, the trucks that transported the bar to the store, and the store itself not make money on that bar? Of course they did.
So why is this bar now $2.20? Or a better question: are we better-off now that a chocolate bar has risen in price 2,200% in 50 years?
We would be better off if:
1) Wages increased more than costs. But this is not the case.
...or...
2) Quality-of-life increased faster due to costs increasing. And I can't see any logic in this hypothesis. Inventors don't invent something for wealth principally because no one knows how anything will turn out. Quantum physics was discovered when a dinner cost 20c. If I invented something and made $100K/year so that I could quit my job and work on this full-time, I would certainly do it. Doesn't have to make me millions.
Also, innovation which leads to increased quality-of-life is a deflationary effect; it reduces prices. Look at TVs; you can buy a massive TV now for only $1,500. And the vast majority of people don't want to be rich; they just want to be financially comfortable so that they don't have to worry about money.
But the key is that someone has to be benefiting from this cost inflation. It certainly isn't me. If chocolate bars were 10c still, my house would be only worth $100K. Would I care? No, why would I? I would fill my petrol tank for $3.50, and my food trolley for $15.
If anyone can tell me why I am better off from the days where a Mars bar costs 10c, I'm all ears.
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