Working on some
documentation for an international market, I came across a table of prices for
wine: 24.99 and 21.99… and it seemed OK for good wine. Then, I remembered that this was not in
US Dollars, of course, and this really is your $5.99 and $6.99 bargain. But again, it is only a matter of
time.
This article from The Financial Times (2001), pegs historical
prices to Mars Bars.
The U.S. Department of
Commerce Bureau of Labor Statistics offers more facts (and less whimsy) here.
The Morris County, New Jersey,
County Library built a database from newspaper advertisements, 1900-2012, here
“Whenever possible, we selected items/brands (Hershey's cocoa, Bayer aspirin, Sears Kenmore refrigerator) that are still being manufactured. This makes it possible to take a 1920 "shopping list" to your local supermarket or department store and compare prices.”
The only real change has
been in the value of the US Dollar.
The government spends more than it takes in from taxes, and the
difference is inflation. The
dollar gets smaller.
Of course, productivity
and technology bring more value to money.
Last night, at dinner with friends, we marveled at the true price of a
$3,000 Apple II in 1980. Today,
the Goodwill has stacks of Dell laptops for $199 each. But if not measured in today’s inflated
money, they would be twenty dollar items... or two dollar, because these changes are only in my lifetime. Look over the course of a century and
you realize that the dollar has lost about 90% to 99% of its value: what costs
a dollar today – candy, for instance – used to cost one cent in 1912.
Imagine two islands -- one where everyone is extremely productive, and another where residents fish a little and sleep on the beach, having no other assets.
ReplyDeleteA case of candy bars falls from the sky and lands on each island. The "lazy" islanders trade two fish for each candy bar. How much does the "rich" island trade for each bar?
Glasgow, thanks for another insightful comment. You grace my blog. I with yours were more active. I gave your challenge some thought this past week. I assume that the productive islanders will pay less and do so by offering a wider array of exchanges. The lazy people have only fish to offer and so the candy bars are relatively more valuable to them as the only alternative to fish. Moreover, the lazy folk will likely consume the candy immediately, whereas the productibists may find that the bars have some shelf life.
ReplyDeleteIn short, I can ascribe many economic virtues to the hard working people. I assume that you have the same model.