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Page 3 states that the cost of the Titanic, "fully equipped", was 1.5m pounds sterling. According to: https://www.bankofengland.co.uk/monetary-policy/inflatio

by arbuge 4y ago

Page 3 states that the cost of the Titanic, "fully equipped", was 1.5m pounds sterling. According to: https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator https://www.bankofengland.co.uk/monetary-policy/inflation/in... this equates to around 120m pounds sterling today. It seems to me that there's no way you could construct anything like her for that amount of money today. I wonder what gives.

profile53 4y ago
Labor laws, mostly.
- ClumsyPilot 4y ago
  like how if someone looses a hand in your factory, they get compensation?
  - profile53 4y ago
    Yeah, or the fact that hard hats are required, people are required to be paid more than 50 cents an hour, you can’t force 1 employee to work 80 hours a week continuously, etc. All of that adds to costs. For good reason, don’t get me wrong, but the cost of labor in the western world has exploded over the last 100 years.
dboreham 4y ago
Inflation isn't a scalar.
- mwint 4y ago
  Can you elaborate? I’m intrigued, always thought of it as a scalar
  - tzs 4y ago
    Different things have different price changes over time. For example, in 1973 a 2N2222 transistor was $0.79 at Radio Shack. Today, a single 2N2222 is $1.29 at Jameco. It's $0.95 at AmplifiedParts.com. It's $7 for 100 of them at Amazon. If we go by the price of 2N2222 transistors and use the price for single units at Jameco we get inflation of 1% per year over the last 50 years. In 1977 the price of volume I of Apostol's "Calculus" in hardback was around $20. Now it is $153 on Amazon, for the same book. By "same book" I don't just mean hardback. I also mean the same content. It was on the 2nd edition in 1977 and Apostol saw no need for any further revisions. Using Apostol volume I as our yardstick inflation has been 4.6% per year over the last 45 years. The most complete way to represent inflation would be as a vector whose components are the inflation for each individual good or service. To get a scalar for inflation they take another vector that represents how much of each good or service that some hypothetical typical consumer consumes and combine them to get what the overall inflation is for a typical consumer.
dylan604 4y ago
I've never looked into how the pastDate -> currentDate valuations are calculated. I've seen things like "adjusted for inflation" type notes, but is that just for the single number of the total? Do the adjustments take into consideration how much extra labor costs now vs then? Do the adjustments consider raw material price increases, etc?
- cardiffspaceman 4y ago
  You can look up the Wikipedia article on almost any comparable ship and see how much it cost to build. I have done that for several examples, and I would guess that a passenger ship compliant with all current regs and standards and carrying ca. 3500 guests would cost ca. USD$1 billion. So that’s roughly the adjustment for inflation. Also adjustment for the new regs and updated regs since Titanic.
  - dylan604 4y ago
    $1B USD is a long way off from the £1.2m -> £120m I replied to though. That 1.2->120 just seemed way too low which is why I asked.
PKop 4y ago
Possibly the true rate of inflation is under-reported
- retcore 4y ago
  In the nineties the UK basket of consumer goods used to calculate inflation suddenly included a well specified PC. Not only was this PC a vastly disproportionate weight in the new calculation of deemed essential domestic goods, but strangely the specification never was upgraded and so the effect on calculated inflation was strongly negative. Consider this was masking inflationary signals for well over a decade before ZIRP took over the economy...
iggldiggl 4y ago
My regular go-to for getting a feeling for the value of old GBP and USD prices is measuringworth.com, which gives a range of values based on not just the regular consumer price index-based inflation, but also some additional indices, like the evolution of wages and GDP. As measured by the latter two, the cost of the Titanic might have been rather more like somewhere between 600 to 1,500 million pounds: https://www.measuringworth.com/calculators/ukcompare/relativevalue.php?amount=1500000&year_source=1911&year_result=2021 https://www.measuringworth.com/calculators/ukcompare/relativ... (Edit: Somewhat funnily, it seems one of the help pages on measuringworth.com actually uses the example of the Titanic: https://www.measuringworth.com/tutorial4.php https://www.measuringworth.com/tutorial4.php)
jessewmc 4y ago
Actually I bet you wouldn't be too far off. Random googling seems to suggest that the average cruise ship today is under $1 billion: https://gangwaze.com/blog/how-much-does-a-cruise-ship-cost https://gangwaze.com/blog/how-much-does-a-cruise-ship-cost These are _much_ bigger ships than the Titanic, and with much more sophistication, complexity, luxury, etc. If ships were still as simple today as the Titanic was I imagine 120m pounds would actually be pretty close.

by arbuge 4y ago

profile53 4y ago

Labor laws, mostly.

ClumsyPilot 4y ago
like how if someone looses a hand in your factory, they get compensation?
- profile53 4y ago
  Yeah, or the fact that hard hats are required, people are required to be paid more than 50 cents an hour, you can’t force 1 employee to work 80 hours a week continuously, etc. All of that adds to costs. For good reason, don’t get me wrong, but the cost of labor in the western world has exploded over the last 100 years.

dboreham 4y ago

Inflation isn't a scalar.

mwint 4y ago
Can you elaborate? I’m intrigued, always thought of it as a scalar
- tzs 4y ago
  Different things have different price changes over time. For example, in 1973 a 2N2222 transistor was $0.79 at Radio Shack. Today, a single 2N2222 is $1.29 at Jameco. It's $0.95 at AmplifiedParts.com. It's $7 for 100 of them at Amazon. If we go by the price of 2N2222 transistors and use the price for single units at Jameco we get inflation of 1% per year over the last 50 years. In 1977 the price of volume I of Apostol's "Calculus" in hardback was around $20. Now it is $153 on Amazon, for the same book. By "same book" I don't just mean hardback. I also mean the same content. It was on the 2nd edition in 1977 and Apostol saw no need for any further revisions. Using Apostol volume I as our yardstick inflation has been 4.6% per year over the last 45 years. The most complete way to represent inflation would be as a vector whose components are the inflation for each individual good or service. To get a scalar for inflation they take another vector that represents how much of each good or service that some hypothetical typical consumer consumes and combine them to get what the overall inflation is for a typical consumer.

dylan604 4y ago

I've never looked into how the pastDate -> currentDate valuations are calculated. I've seen things like "adjusted for inflation" type notes, but is that just for the single number of the total? Do the adjustments take into consideration how much extra labor costs now vs then? Do the adjustments consider raw material price increases, etc?

cardiffspaceman 4y ago
You can look up the Wikipedia article on almost any comparable ship and see how much it cost to build. I have done that for several examples, and I would guess that a passenger ship compliant with all current regs and standards and carrying ca. 3500 guests would cost ca. USD$1 billion. So that’s roughly the adjustment for inflation. Also adjustment for the new regs and updated regs since Titanic.
- dylan604 4y ago
  $1B USD is a long way off from the £1.2m -> £120m I replied to though. That 1.2->120 just seemed way too low which is why I asked.

PKop 4y ago

Possibly the true rate of inflation is under-reported

retcore 4y ago
In the nineties the UK basket of consumer goods used to calculate inflation suddenly included a well specified PC. Not only was this PC a vastly disproportionate weight in the new calculation of deemed essential domestic goods, but strangely the specification never was upgraded and so the effect on calculated inflation was strongly negative. Consider this was masking inflationary signals for well over a decade before ZIRP took over the economy...

iggldiggl 4y ago

My regular go-to for getting a feeling for the value of old GBP and USD prices is measuringworth.com, which gives a range of values based on not just the regular consumer price index-based inflation, but also some additional indices, like the evolution of wages and GDP. As measured by the latter two, the cost of the Titanic might have been rather more like somewhere between 600 to 1,500 million pounds: https://www.measuringworth.com/calculators/ukcompare/relativevalue.php?amount=1500000&year_source=1911&year_result=2021 https://www.measuringworth.com/calculators/ukcompare/relativ... (Edit: Somewhat funnily, it seems one of the help pages on measuringworth.com actually uses the example of the Titanic: https://www.measuringworth.com/tutorial4.php https://www.measuringworth.com/tutorial4.php)

jessewmc 4y ago

Actually I bet you wouldn't be too far off. Random googling seems to suggest that the average cruise ship today is under $1 billion: https://gangwaze.com/blog/how-much-does-a-cruise-ship-cost https://gangwaze.com/blog/how-much-does-a-cruise-ship-cost These are _much_ bigger ships than the Titanic, and with much more sophistication, complexity, luxury, etc. If ships were still as simple today as the Titanic was I imagine 120m pounds would actually be pretty close.