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Whatever the approach, I'm not sure those 17th century numbers pass the eye test. Does it make sense that pre-industrial revolution purchasing power would be r
by slg 5y ago
Whatever the approach, I'm not sure those 17th century numbers pass the eye test. Does it make sense that pre-industrial revolution purchasing power would be roughly the same as it was at the beginning of the 20th century?
- ghaff 5y agoThat's one problem with trying to compare CPI over long periods. Consumers are buying totally different types and quantities of things with their dollars.
- slg 5y agoExactly, it all seemingly depends on the arbitrary decisions about how we define our basket of goods. For example is it generic "clothing" or an individual outfit of clothing. Individual pieces of clothing cost drastically more pre-industrial revolution. Because of that, people owned a lot less clothes. Therefore purchasing power increased by that metric. However consumers responded to clothes becoming cheaper by expanding their wardrobes. The average person likely owned a lot more clothing by the time the 20th century rolled around. That could mean purchasing power was relatively similar if the metric was generic "clothes". I'm not sure either approach is any more correct than the other.
- ClumsyPilot 5y agoI was always interested in how much discretionary spending they had - you have to pay electricity or whale oil bill, and have whatever clothing is mininally required to not look homeless - but after all that, what do you have left?
- FredPret 5y agoOn one end of that timeline people were buying buying barrels of whale oil, and on the other end they are subscribing to internet services!
- amanaplanacanal 5y agoIt’s a tough problem. I’m guessing their assumption is that since the dollar was commodity money in that time frame, an ounce of silver was worth the same in 1700 as in 2000. It’s probably not far off.