I don’t read the original quote as an argument against the standard idea of inflation, but rather as a suggestion to additionally factor in changes in quality when discussing changes in price. It’s clear from looking at commodity prices that inflation has occurred; gas might be a bad example, but things like timber, steel, rice probably aren’t. But most consumer goods are not commodities in this sense, and 1913 or 1970 prices for them are not as directly comparable to those of modern goods.
In some cases the comparison seems to clearly favor either past or contemporary goods—I might prefer 1970 kitchen appliances or comic books, but I’d definitely prefer contemporary radios or TVs. In others it’s more of a wash—adjusted for inflation, a 2013 Ford Focus costs about twice as much as a 1970 Ford Maverick, but it’s got about twice the engine power and more interior room, and it’s far safer and more reliable.
(At a guess, incidentally, I’d say that $40000 was chosen because it’s close to the median household income in the US.)
I don’t read the original quote as an argument against the standard idea of inflation, but rather as a suggestion to additionally factor in changes in quality when discussing changes in price. It’s clear from looking at commodity prices that inflation has occurred; gas might be a bad example, but things like timber, steel, rice probably aren’t. But most consumer goods are not commodities in this sense, and 1913 or 1970 prices for them are not as directly comparable to those of modern goods.
In some cases the comparison seems to clearly favor either past or contemporary goods—I might prefer 1970 kitchen appliances or comic books, but I’d definitely prefer contemporary radios or TVs. In others it’s more of a wash—adjusted for inflation, a 2013 Ford Focus costs about twice as much as a 1970 Ford Maverick, but it’s got about twice the engine power and more interior room, and it’s far safer and more reliable.
(At a guess, incidentally, I’d say that $40000 was chosen because it’s close to the median household income in the US.)