There's something funny about inflation: how one-sided the criticism is.

Inflation, of course, raises prices, which is bad -- and that's usually where the criticism ends.

But there's another side of inflation: the impact it has on wages and assets. If prices go up 10%, but wages and net worth also rise 10% (or more), are you worse off?

Yale economist Robert Shiller wrote a paper in the 1990s asking people around the world why they feared inflation. While respondents were overwhelmingly fascinated with inflation and feared its wrath, most couldn't gather much more than an emotional response. Shiller wrote:

"When asked why they dislike inflation, people often protest that they are not experts, and they need to be prodded to respond. When they do respond, it is often with what seem to be incompletely thought-out ideas and vague associations about inflation, yet a conviction that inflation is important. Most people seemed to be vulnerable to fundamental confusions about inflation, and in spite of their convictions as to the importance of inflation, seemed not to have given really serious thought to it."

After his interviews, Shiller elaborated: "[T]he main issue for the public with regard to inflation is just that people do not see the connection between inflation and increases in income that might be associated with it."

Might may be the key word there. Over certain periods of time, inflation can, of course, outstrip rising wages. And once you get into a hyperinflationary spiral, like Zimbabwe faced in recent years, people are inarguably worse off.

But those tend to be the exceptions.

At a recent conference with Berkshire Hathaway (NYSE: BRK-B) Vice Chairman Charlie Munger, a questioner asked Munger about inflation's "devastation" over the past half-century. In 1950, a corned-beef sandwich at a local diner cost $0.55, the questioner noted. Today it's $10. How can a country be anything but a failure when its currency loses 95% of its value to inflation, he wondered.

Munger's response was characteristically curt: "If you think the past half-century was bad, you will have serious problems in life," he said. "Despite inflation, we've been a huge success. Real GDP has grown 2% per year per capita. That's fantastic. The period you describe as miserable was a tremendous time for the American economy. You've described success."

A few numbers illustrate his point.

A dollar may have lost 95% of its value since 1950 (at least in corned-beef sandwich terms), but that only applies to those who kept cash under their mattress. If the $0.55 it took to buy a sandwich in 1950 were put in a risk-free savings account earning 5%, it'd be worth $11 today. Put in a stock index fund, it'd be worth nearly $200. The real gift of companies like Coca-Cola (NYSE: KO) and Altria (NYSE: MO) is their ability to raise prices with inflation over time -- something their investors have benefited from handsomely. Only those who shunned all investment return saw their dollars depreciate 95%. And they deserve the outcome they received.

Beyond investments, incomes tend to follow the same path. Despite inflation, things have generally gotten better over time.

Real disposable income -- that's after-tax income adjusted for inflation-- has increased threefold since the early 1950s. Yes, a corned-beef sandwich may have cost $0.55 in 1950, but the average household income back then was $3,900. Today, the average household earns that much every three weeks. Inflation raced along between 10%-13% per year in the early 1980s. But what else grew at roughly the same rate? Incomes.

The Bureau of Labor Statistics has records detailing the percentage of income spent on various items going back to 1901. The improvement in some important areas is astounding. In 1901, 46% of an average income went to food and beverages. By 1950, that was down to 33%. By 1987, 19%. Today, it's 14%. The Consumer Price Index shows about the same: Disposable income has risen twice as fast as food prices over the past 50 years.

There are counterarguments here. Three areas in particular have been hit by genuine inflation over time: housing, education, and health care. Part of this is caused by quality -- homes are bigger, education buys a better income, and health care is more advanced -- but all three, apples-to-apples, are still more expensive today than in the past. Some of why households earn more today is because more women are working, creating two incomes where there used to be one. Inflation gives a general perception that something is wrong, creating uncertainty and fear. And if you're living off a fixed income, you can throw most of this out the window.     

But Shiller's point remains: There is another side of inflation that often goes ignored. One doesn't have to argue that inflation is good, but it might not be nearly as bad it looks.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

Fool contributor Morgan Housel owns shares of Altria and Berkshire. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Berkshire Hathaway, Altria Group, and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway and Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.