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Allison Schrager

Inflation Ate Your Free Lunch, But You’re Still Better Off

Americans are facing a painful drop in the higher living standards brought by ultra-low interest rates and a technology revolution. It had to end sometime.

What technology bringeth, inflation makes more expensive.

What technology bringeth, inflation makes more expensive.

Photographer: Olivier Douliery/AFP via Getty Images

Believe it or not, we live in the best of times. It’s been a crazy few decades, with a pandemic, rising inequality, slowing growth and productivity, and major changes in the economy. But generally, most people experienced huge gains in living standards. We shudder to think what life was like in the 1980s or 90s, when air-conditioning was still a luxury,  as were dishwashers; people had to defrost their freezers, we were tied to landlines, and homes had only one or two televisions — and they weren’t even flatscreens. The smartphone may not be the game changer that indoor plumbing was, but just stop and count all the ways it’s smoothed out the kinks in your daily struggle.

In the same way the first waves of industrialization made consumer goods (clothing, housewares) cheaper and more accessible, the tech boom made services that were once luxuries (car services, delivery, handymen, digital butlers) widely available and contributed to rising prosperity. It’s indisputable that our standards of living are remarkably higher than they used to be.