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As another reference point, an annual salary for low-to-medium skilled labour in mid-17th century Holland was around 100 to 200 guilders, which would be about 2
by em500 8y ago
As another reference point, an annual salary for low-to-medium skilled labour in mid-17th century Holland was around 100 to 200 guilders, which would be about 20 million USD according to the implied "Infl. Adjusted" conversion in the article (upon which the entire premise of the article rests).
- close04 8y agoI think the best measure would be what percentage of the total world's wealth (valuation?) does a company represent at some point.
- em500 8y agoGood luck estimating both 17th-century world wealth in Dutch guilders and 21st-century world wealth in USD, both within an order of magnitude. That's at leasts several months, if not years worth of research work in there.
- close04 8y agoOh I'm sure it's a lot of work. But that's the whole point right? Getting a proper answer. Guesstimates and half calculations are also imprecise enough to make such articles basically just an exercise in imagination rather than an accurate representation of the facts.
- JackFr 8y agoThere is a tremendous amount of work by economists measuring these things, which is why this article is so irritating. The point that the Dutch were an economic superpower in the 17th century is not off base: they were only country to maintain colonies in North & South America, Africa and Asia. The point that the Dutch East India Company was probably the first company set up under a system of modern financial capitalism, that is a permanently capitalized enterprise with a professional managerial class, separate from tradable claims on the profits of that enterprise, is also well taken. But this article is a load of twaddle.
- zeristor 8y agoBut is it click bait or fake news?
- ucaetano 8y agoBut the problem is that it is impossible to get a proper answer, even with infinite work. It will always rely on guesstimates and half calculations.
- frozenport 8y agoDoes this mean that total wealth stays the same though time?
- timwaagh 8y agodutch architecture consisted of nothing but gold in the middle ages. post-independence we painted everything brown to fit in with the rest of europe.
- pcurve 8y agoI think using annual salary is a reasonably fair assessment. Assuming it was $50k in today's dollar, the the company's valuation is more reasonable at $20 billion.
- Isamu 8y agoI agree with the spirit of what you are getting at. Except that it's not fair to simply assume that a good salary was roughly similar in terms of purchasing power across the a few centuries. In fact at that time middle income people were much poorer in terms of what they were able to consume, purchase, and barter.
- CydeWeys 8y agoAs one example, the power loom didn't exist until the late 18th century. Before then, clothing was really expensive because an unbelievable amount of hand labor had to go into it. The average person did not own a lot of clothing, and the clothing they did have cost them relatively a lot of money.
- mtnGoat 8y agoWhich is also where the term "selling the shirt off your back" came from. Back in the days when clothing was worth a lot more, you could actually trade your clothes for stuff in a pinch. Nowadays clothing ain't worth much.
- aasasd 8y agoI finally get to ask someone directly: in “the a few centuries,” are the two articles considered valid English or is it a mistake?
- usefulcat 8y agoIt's a mistake
- 8y ago
- CydeWeys 8y agoIt does make you wonder what the inflation-adjusted figures are purported to mean even, given that they result in completely ridiculous results. By contrast, an inflation calculator tells me that $100 one hundred years ago is worth around $2,500 now (so 25X). And according to this article https://www.jstor.org/stable/1820827?seq=1#metadata_info_tab_contents https://www.jstor.org/stable/1820827?seq=1#metadata_info_tab... , a pretty typical wage back then was $0.50 per hour. 25X that is $12.50, which sounds about right as a typical median wage nowadays (perhaps a bit low; there is a real increase in standard of living over this time period too). So the inflation figures going back at least a hundred years do make sense. What causes them to break down when you try to go back much farther, then? Are the inflation figures simply wrong? Are there compounding errors that, over enough time, make the result completely ridiculous?
- arithma 8y agoOne aspect to it is that today a smartphone costs a few hundred dollars. Back in the day, no amount of money would allow you to buy one. Maybe to compare East India to current top companies, you'd need to compare the percentage of global GDP to estimate how big they are (and how large they'd most likely be if they continued to exist.) The base/average salary comparison also makes a lot of sense.
- digitaltrees 8y agoThis is great analysis. If you think about the amount of global trade that was controlled by the Dutch East India Co, there is no modern company even close. Apple isn't even close, the have a small sliver of a small part of the global economy. Even Exxon, is only one small part of the economy.
- jdsully 8y agoInflation is a geometric process, so any errors will greatly compound over long periods of time.
- notahacker 8y agoInflation is usually measured as the change over time in the prices of a "representative" basket of goods (and which goods in which proportion is a pretty subjective choice). Over time, the costs of particular goods diverge a lot, especially with respect to wages, and how important those goods are to the economy also varies a lot. The purchasing power of a typical weekly wage in 1800 or 1637 looks very different depending on whether you express it in terms of bread rolls, non-leather settees or bluetooth speakers (all of which are constituent parts of the modern UK CPI index)
- deleted 8y ago[deleted]
- rovolo 8y agoFrom this other source [0], I see a min/max historical Guilder in 1600-1700 to 2016 Euro rate of 1 guilder to 8-18 Euro. That would be 800-3200 Euro per year for a laborer, which is comparable with the poorest nations today. That seems accurate for a pre-industrial time. Using that source, 78m Guilders would be 624m-1.4b Euro today. [0] http://www.iisg.nl/hpw/calculate.php http://www.iisg.nl/hpw/calculate.php