In many ways, the middle class is better off now than ever before

The wealth of nations, according to Adam Smith, the founding father of the market economy, is not measured in GDP or cash reserves. Rather, it “consists in the cheapness of provision and all other necessaries and conveniences of life.”

By that standard, American wealth in general, and the wealth of poor Americans, has skyrocketed in the last half-century, and the government had relatively little – though certainly not nothing – to do with it. And it’s not just that consumer items are cheaper than ever; they’re also better than ever. An iPhone today isn’t just better than yesterday’s phones, it’s better than yesterday’s cameras, calculators, portable stereos, and computers. Many of the standard features on a 2010 Honda Accord were considered luxury items ten years ago and almost unimaginable 20 years ago…

Well, food has gotten steadily cheaper – for everybody – over the last century. For instance, Perry calculates that eggs cost about one-tenth as much as they did at the beginning of the century. Moreover, Americans, with their allegedly stingy government, pay about half as much for food as Europeans do.

So, what has gotten more expensive? According to St. Lawrence University economist Steven Horwitz, there are only four areas that have become more expensive over the last century as measured in their “labor price”: housing, cars, higher education, and medical care. With the arguable exception of a college degree, all are marked with wildly improved quality. And the main reason for rising medical and college costs (and to a lesser degree housing costs) is that the government has distorted the market by “helping.”