“[Wittgenstein] once greeted me with the question: ‘why do people say that it was natural to think that the sun went round the earth rather than that the earth turned on its axis?’

I replied: ‘I suppose, because it looked as if the sun went around the earth.’

‘Well,’ he asked, ‘what would it have looked like if it had looked as if the earth turned on its axis?’”

G.E.M. Anscombe

An Introduction to Wittgenstein’s Tractatus (1971)

Last month my mother rejoiced at getting a raise. Instead of the company policy of routinely upping wages by 1-2 percent, this year she received a breathtaking 3.5 percent, for which she was exceedingly happy. In a completely unrelated observation, she complained often and loudly at how grocery prices had become noticeably higher. “Everything got so expensive,” she injected into every other conversation. 

Not only had she overlooked that her wage “increase” was actually a real wage cut of about 7 percent when factoring in consumer prices, she was measuring prices in a currency that itself was imploding against neighboring fiat monies. Specifically, she meant to vacation in Italy and Ireland this year, both eurozone countries where her depreciating SEK buys her 13 percent fewer euros than they did last summer. On top of that, eurozone food prices — those to which she is mostly exposed as a meandering tourist — have in the last two years risen some 20 percent, according to Eurostat. 

Roughly speaking, then, my mother’s ability to generate economic value got reduced by about a third — yet she thinks she’s better off because the paycheck at the end of the month has larger numbers on it. Pointy-hats in Frankfurt and Stockholm cut her economic value by some 30 percent, and somehow still convinced her that she was better off.

The dissonance is easy to spot when it’s laid out like this, but much harder to identify as it happens. In When Money Dies, Adam Fergusson’s classic account of the hyperinflations in the 1920s, ordinary Germans and Austrians, “assume[d] not so much that their money was falling in value as that the goods which it bought were becoming more expensive in absolute terms.”

Even in one of the worst imploding currency debacles of the last century people still thought that the trouble was that goods became more and more expensive — not that there’s something wrong with the money itself.