Technology should make everything cheaper. It does, in fact, make everything cheaper. The spreadsheet replaced entire accounting departments. The tractor replaced forty farmhands. Containerization slashed global shipping costs by roughly 90 percent after 1956. Manufacturing robots now produce goods in hours that once took weeks. Every one of these innovations compresses the real cost of production. So why does your grocery bill keep climbing?
Because a counterforce erases every efficiency gain before it reaches your wallet.
Central banks, primarily the Federal Reserve since 1913, expand the money supply faster than productivity grows. The Fed has increased M2 money supply by over 40 percent between 2020 and 2022 alone. Ludwig von Mises identified this mechanism precisely: every dollar created without corresponding production dilutes the purchasing power of dollars already in circulation. The gain from the robot on the factory floor disappears into the monetary expansion decided in Washington.
Government spending compounds this. Federal outlays exceeded $6.7 trillion in fiscal year 2025, most of it deficit-financed, meaning newly created money chasing existing goods. Licensing regimes, zoning laws, and FDA approval timelines add years and billions to bringing productive innovations to market.
Technology is genuinely winning the war against scarcity. Televisions, clothing, and computing power cost a fraction of what they did in 1990. Housing, healthcare, and education, the three sectors most saturated with government intervention, keep climbing regardless. Inflation is a policy. Deflation is what free markets deliver.
https://x.com/Handre/status/2107762102991786006?s=20
No comments:
Post a Comment