The High Cost of Do-It-Yourself Cost Cutting

I was thinking about Adam Smith as I waited on hold to schedule what would turn out to be the sixth unsuccessful attempt to fix my high-speed Internet service.

More than two centuries ago, Smith wrote in The Wealth of Nations: "The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it."

Smith was trying to explain why the same thing sells for such different prices in different places. But Smith's emphasis on the toil and trouble of acquiring a thing also explains why our current statistical measures of price inflation fail to capture the full cost of a thing or service. If you look at the full toil-and-trouble cost instead of just the price tag in dollars, you can see not only why inflation feels higher than the official measure, but also why it is higher. ...