Producitivity and Price

I'm not expecting to grow flowers in the desert
But I can live and breathe
And see the sun in wintertime
--Big Country

Nice example of what happens to price as productivity improves. Price of a bushel of corn has declined as productivity (bushels of corn produced/acre) has gone up.

We have been conditioned to believe that the natural direction of prices is higher. Nothing could be further from the truth. As long as productivity improves, there should be downward pressure on prices.

If prices are going up instead of down, then it is either because a) productivity is declining, or b) someone is interfering with market pricing mechanisms (e.g., price ceilings/price floors, increasing money supply).