CPI Hides the Economy You Actually Live In
In this explanatory video, Mark Moss critiques how the Consumer Price Index (CPI) is calculated. He explains that CPI is derived by averaging the prices of a broad basket of goods and services, which can mask divergent price movements when components move in opposite directions. By re‑indexing the basket to the year 2000 and separating items into two groups—services that cannot be produced by robots (e.g., tuition, school fees, childcare, medical care) and goods that can (e.g., computers, peripherals)—Moss shows that service prices have risen sharply while robot‑made goods have fallen dramatically, to as low as 7 cents on the dollar. The average CPI therefore appears modest, but the underlying reality is a split economy: rapidly increasing costs for essential services and sharply declining costs for many manufactured goods. Moss argues that the headline CPI hides the true economic experience of most people.
