[IncPen]

What's the difference between increasing bang-for-buck (seen most dramatically in the computer industry over the last 20 years) and deflation?

I think what you're referring to can be explained by volume units of sale, ie. computers are cheaper but they sell more of them, and thus can increase margins.

The kicker is when a cost (like labor) is outsourced or sent offshore.

[ReadMyMind]

I don't think the computer bang-for-buck increase is explained by volume. It is explained by continuing advances in technological capability (making more smaller transistors for the same amount of money or less).

I'm referring to the fact that you can now spend less than $5,000 and get a computer that is more capable than a 1980 mainframe costing $10,000,000 or more. This has nothing to do with the production volume of 1980 mainframes.