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Their inflationary calculations are very tendentious and ignore substitution effects. 32GB of flash memory in 1991 would have cost $1.44 million: Sure. So you w

Their inflationary calculations are very tendentious and ignore substitution effects. 32GB of flash memory in 1991 would have cost $1.44 million: Sure. So you wouldn't have used flash memory, you'd have used something cheaper, like audio tapes and film, and you would have had an inferior experience for it... but not $1.44 million worse of an experience. These figures are meaningless. That's why the CPI uses an actual market basket that's meant to represent what people actually buy. People whose payments are linked to the CPI have not in fact seen their payments deflated by such astonishing factors. The BLS (which is responsible for the official CPI) has a recent overview on possibilities of error and related considerations: http://www.bls.gov/opub/btn/volume-1/consumer-price-index-data-quality-how-accurate-is-the-us-cpi.htm http://www.bls.gov/opub/btn/volume-1/consumer-price-index-da... Their conclusion: "Measurement of price change in a large economy is sufficiently complex that the accuracy of an estimate is difficult to gauge and is likely to be debated. The CPI cannot claim to be a completely precise measure of inflation and publishes the variance of its estimates. Several potential sources of bias have been identified in the CPI and addressed, though there continues to be debate over to what extent and in what direction bias may still exist and the ways in which BLS can continue to increase accuracy."

nswanberg 13y ago
Sure, members of the public or small and medium sized organizations may have substituted, but if yours was the sort of organization that bought, say, a Cray Y-MP for $35 million, paying $3.56 million and putting this thing on a network would have been a bargain, which makes me think that the authors may not have taken the value of this being an integrated system into account. And even if they pegged the iPhone at exactly the same price as a Cray Y-MP they would still be low due to the iPhone's vastly lower power consumption. Finding out that this article was written by the American Enterprise Institute made me feel dirty until I reflected on the fact that nothing in the article appears to be grossly incorrect, and discarding an interesting article for some possibly bad political implications seems like a bad way to live one's life. Another thing that no-one has yet pointed out is that even this article's calculation could still probably be extremely low if the cost of developing iOS and the related apps are included.

nswanberg 13y ago

Sure, members of the public or small and medium sized organizations may have substituted, but if yours was the sort of organization that bought, say, a Cray Y-MP for $35 million, paying $3.56 million and putting this thing on a network would have been a bargain, which makes me think that the authors may not have taken the value of this being an integrated system into account. And even if they pegged the iPhone at exactly the same price as a Cray Y-MP they would still be low due to the iPhone's vastly lower power consumption. Finding out that this article was written by the American Enterprise Institute made me feel dirty until I reflected on the fact that nothing in the article appears to be grossly incorrect, and discarding an interesting article for some possibly bad political implications seems like a bad way to live one's life. Another thing that no-one has yet pointed out is that even this article's calculation could still probably be extremely low if the cost of developing iOS and the related apps are included.