Inflation, yes, but what about deflation?

It's horribly difficult to actually compare living standards across time. Not just because of inflation of course, that's simple enough to calculate. In fact, here's an example:
Millionaires need £17.5 million today to enjoy the equivalent lifestyle of a millionaire half a century ago, research shows. Latest estimates show there are more than 375,000 millionaires in the UK, but these individuals no longer enjoy the lifestyle they once could, according to the findings by Halifax Financial Services. This is because inflation has significantly eroded the value of money, with £1 million today having the equivalent spending power of £57,143 in 1958, it said.

The difficulty comes in trying to adjust for the fact that technology marches on and certain things fall dramatically in price. One small story from the Worstall family archives is that when Paterfamilias was at Cambridge, he tells me that they spent £1.5 million on some magnetic core memory for the computer they had (no, I don't know whether that number is actually true or not). This was for 256 kb which is about the amount my £5 calculator uses to work out how to turn itself on. The computer you're using to read this probably has 1 GB of RAM memory in it and a similar £100 or so will buy you 120 GB of hard drive.

Now economists do try, however imperfectly, to get such changes into the price indices. The improvements in cars, disc brakes for example, 6 speed gearboxes rather than 4, they do their best to adjust for these.

But there are other things they don't even try to include. The quality of restaurants for example: in late 1950s London you had the choice of Brown Windsor Soup and Tournedos Rossini (and there's nothing wrong with either) at the grand hotel restaurants or a fry up at a caff. The curry surge hadn't started, most English food was vile and Berni Inns with their prawn cocktails, steak and chips and Black Forest Gateaux were a revolution still waiting to happen.

Dentists' drills were still foot pumped......

While it's easy enough to calculate the simple monetary inflation rate it's very difficult indeed to work out standards of living over time.

To a very large extent, the good old days are right now.