: Yes they fall too. First, without income taxes (and various other taxes) gross income rates would fall with prices.
So, let me get this straight, if, say, we had deflation of 3%, then wages would fall at 3% likewise?
: Because of the expansion of capital (in the form of new technologies, greater opportunities, choice and abundance) in an unshackled society net incomes would buy more than net income buys in a mixed economy. This does happen slowly in a mixed economy - compare the bundle of goods a 50s family bought to one a 90s family buys.
Erm, so teh price of goods has fallen (3) but as a ratio to my wage they ahve stayed constant (my wage fell at 3% as well) so I can thus buy more things. I wanna live in your world.
: ie, you'd be better off, and have more chances of becomeing even better off.
Because, of course, with wages falling, I can so easilly save up for that primative accumulation necessary to start my own business....