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Archiver > GEN-MEDIEVAL > 2001-06 > 0991837515


From: "John Steele Gordon" <>
Subject: Re: Translating the Value of Money over Time (was Forbes-Smith . . .)
Date: Wed, 06 Jun 2001 14:25:15 GMT
References: <d6.7713e80.284eacb8@aol.com>


<> wrote in message news:...

> In a message dated 6/2/01 12:32:07 PM, writes:
>
> << This device might be useful for comparing money over short time spans,
and
> in recent times, but it is useless for comparing money from the
> pre-industrial era to today's money. >>
>
> Obviously such comparisons are not fair if technology is included, but I
do
> think you can compare wealth by what it takes to survive in a fairly
> comfortable manner in a place like rural America. Why rural America?
Houses
> in cities vary far too much, but in much of rural America you can get
> something decent for $25,000.

And what part of rural America has decent houses for sale at $25,000? That
might get you a used trailer that doesn't leak, too badly, but not much more
than that. And don't forget that living in "rural America" would more or
less require an automobile. That's another $20,000 right there for anything
but an old clunker.

It will be old, but will be livable. Most
> people lived in rural economies until recently. Also, $24,000 annual
income
> is the suggested poverty line in the USA due to costs of groceries,
> utilities, etc. Translate these comfortable survival figures to the
currency
> of franks or pounds and compare this to what it took to live comfortably
in
> the time in question.

As I suggested, a rough notion of the value of large sums of money can be
gained by determining what sort of annual income such a sum would have
produced at the time in question, either in bonds (beginning, say, in the
early 18th century in Britain) or agricultural land earlier. Then determine
where on the income scale that income would put you at the time.

For smaller sums, compare them to the average wage at the time for unskilled
labor.

But forget this rural/urban stuff. That's just compounding the problem. As
for the "poverty rate," that has a lot more to do with politics than it has
with economic realities. And be comfortable with approximations, they are
the best you are going to get.

JSG


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