Hacker News Reader

Economic growth is the key to resolving the paradox you highlight of his seeming wealth then being inflation adjusted to only modestly high net worth today.

Using Maddison's estimate for UK per capita GDP in 1820, suggests that the average UK resident generates more than 10.7x as much wealth now than back then.

Of course, all these comparisons are fanciful and dependent on the utility one assigns to various things. In terms of the number of servants he could employ, a man of Darcy's wealth far outpaces all but the wealthiest in the first world whereas in terms of his ability to travel to Rome expeditiously, he can't measure up to a nearly broke student.

Yeah, the wealth generation statistic is interesting. I think a related way to think of why amounts of wealth that seem nominally not that extreme by today's standards were extreme hundreds of years ago is that there was much less you could spend that wealth on. People just didn't have the capacity to accumulate nor spend money to buy things and services at the same rates.

So viewing money as tokens of value, there was just less 'value' around full stop. So having much less of it still made you relatively extremely wealthy.

You could always spend wealth on land, building a manor, hiring staff to maintain the land/manor, arts, crafts, travel, even science.

Also, how much would Darcy pay for an electricity generator, an old CRT television with a PSX and all the PSX games ever made? That makes comparisons in discretionary spending difficult.

But comparing basic spending could be doable. It is, of course, easier to compare such spending for a median person than for an outlier.

Yeah it's extremely interesting to think about - it's all a system and when you think you could just spend more money on whatever was available (building a bigger house, horses, arts, hiring staff) you also have to consider that there would have been much tighter upper limits on all of these. The labour market was extremely illiquid, and smaller, and economies of trade and skills were much more localised than today.

Doubtless you could simply waste your money pretty much without limits (pay more unqualified people to do a bad job at building your house, for example) but it would have been much more limited in terms of how you could usefully deploy your wealth, just because there was much less of everything available.

Isn't a major topic in bride and prejudice how illiquid the property market is?

Mr. Darcy has money, but no one will sell him the land. Flip side the selling of land and thus lose of rent was seen as an act of desperation.

Might have your characters mixed up? Darcy has plenty of land, Bingly wants something fitting his standing as a man of means. However, many rich/aristocratic families were prevented from selling their real estate interests, and could only access the derived profits. This naturally reduced the availability of land.

The author, in the first sentence of the second paragraph, has anticipated your objection:

> In what is probably my favourite piece ever written, I tried to estimate exactly how rich Mr. Darcy was – Mr. Darcy, of course, of Jane Austen’s classic novel Pride & Prejudice.

He goes into considerable detail.

https://joakimbook.blogspot.com/2016/12/how-rich-is-mr-darcy...

He does - and then rejects GP's estimate, as he's more interested in analyzing relative incomes and income inequality (i.e. taking a social/political perspective) than looking at things from Miss Bennet's perspective.

Inflation figures over 200 years are pretty dodgy. How much was a dose of penicillin, an iphone or a flight to New York in 1819? There's a very real sense in which very average Westerners now are far wealthier than Darcy.

Conversely Darcy would have had far more power than the someone with net worth £16.8-28m would today. He'd probably have had a large say in who the local MP was, the local priest. Probably could turf a large chunk of the local population out of jobs and homes. Likely had a small army of servants.

And "needed" that small army of servants because he couldn't just buy a reliable car and drive it himself. Cooking and washing were major chores. Dress and other tasks related to his station in life took help in a way that almost no one needs or even wants today.

Your examples have an interesting pattern.

> How much was a dose of penicillin, an iphone or a flight to New York in 1819? There's a very real sense in which very average Westerners now are far wealthier than Darcy.

One's wealthiness is always relative to others. The items listed here are goods that are broadly available today across wealth bands, and are therefore not markers of wealthiness.

> Conversely Darcy would have had far more power than the someone with net worth £16.8-28m would today. He'd probably have had a large say in who the local MP was, the local priest. Probably could turf a large chunk of the local population out of jobs and homes. Likely had a small army of servants.

Power is a great (the ultimate ?) example of a resource whose access and distribution can be compared over time.

Power over others has never been quantified like monetary wealth has, yet it is intrinsic to humans given we are a highly social species. For people like Darcy, such power over others was a hereditary birthright. You couldn't buy a share of that power as an investment. Therefore, there was no market that could estimate the monetary value of that power.

Slavery would seem to be a pretty straightforward example of such a market?

https://www.measuringworth.com/slavery2009.php

Not for the purpose for quantifying the wealth of someone who owns no slaves.

And slavery is a definitionally different situation because a slave has absolutely no leverage to negotiate for their interests, so whatever quantification of a slave's value and consequent slave owner's net worth is not generalizable to relationships between free people except in very extreme situations.

Another way of looking at this is that all else equal, when freed, a former slave's net worth goes up by a constant factor based on their new status and rights.

> One's wealthiness is always relative to others.

That isn't the case, wealth is an absolute measure. Inequality, power and to some degree satisfaction are relative to others, but wealth can be created and destroyed independently. Which is the major argument against socialism, incidentally. If wealthiness were a relative measure, full blown communism would be great for wealth. Which it most certainly is not.

Modern inhabitants of the first world are insanely wealthy.

> That isn't the case, wealth is an absolute measure

That's why I used the adjective "wealthiness", as in "He is wealthy" vs the noun "wealth" as in "His wealth is X".

The adjective is relative, and implies more wealth relative to a population. The noun is not relative.

Is this a conflation between wealth and standard of living?

I think the point is, you have to conflate them more and more the farther back in time your inflation calculation tries to go.

Some things are pretty much the same today as they were 200 years ago, like land or a person's time. Relative wealth--relative to your surrounding society--allows you to buy those. That was true 200 years ago, and it's true today, although it might cost you a bigger pile of nominal currency (e.g. more British pounds) today than back then.

But no amount of wealth in the early 1800s could have bought you a 6-hour journey from London to New York, NY. Whereas, today it is something that many people can afford, at least occasionally. No amount of money in the 1800s could have bought you high-fidelity recordings of all Beethoven's works that you can carry with you anywhere on your wrist.

So which category better represents inflation since the early 1800s? In terms of things you could buy back then, like land or people's time, you can do a pretty straight calculation. But when you get to brand new categories of things to spend money on, like penicillin or an electric scooter trip, you're essentially "dividing by zero" because these things did not exist at all back then.

You have to invent some sort of way to value a thing in past dollars that could not have actually existed at that point in the past. The farther back you go, the more it just becomes guesswork.

If you think this is a conflation, perhaps you could explain how and why they shouldn't be?

Standard of living is a function of wealth, but wealth is not the sole factor. It also includes quality of the environment, crime levels, access to good medical care, education standards, civil rights, house affordability and so on.

Most people nowadays are poorer than Mr Darcy in a monetary sense, but probably have a higher standard of living.

The sibling post makes the point that in the past, being wealthy was a much bigger component of this - if you're rich you can afford a doctor (versus none), you can eat when others go hungry, you can afford to travel at all, you can be educated, etc.

As I understand it, standard of living is objective - you can quantify it fairly well. Quality of life is subjective.

What does it mean to be 'poorer in a monetary sense' if it leads to comparisons where person A has better healthcare, transportation, information access etc than person B but B > A?

Your comment focuses on standard of living issues. But your earlier claim was that these are separate from 'monetary wealth'. I think you would need to specify what 'monetary wealth' is separate from 'standard of living' in order to make a convincing argument.

You'll find this hard to do, because any wealth measurement is either a thing, or an instrument that will get you a fraction of the things other people have. Financial wealth is cashed out in stuff. So cross temporal comparisons are going to involve comparing the stuff two people can command. And the stuff they can command is embedded in the technology and society of their respective times.

Top 1% in the US is $421k a year, and top 1% in the world is $32,400 a year[1]

Also note that Mr Darcy need only sit and drink tea to receive his income.

> Pathetic! Not even a one-percenter. I would not walk three dirt miles and muddy the hem of my dress and suffer a terrible cold for half that

[1] https://www.investopedia.com/articles/personal-finance/05061...

> Darcy's worth £681K a year and his friend half that. In the Valley or London, what's that, a director level at a FAANG, and a tech lead?

One big difference being, when he dies, that income reverts to his heirs and their heirs. If he was earning that as a wage, it wouldn't. So it's not directly comparable.

If he was earning that as a wage, he'd be working long hours every day.

Depends on the rate. To quote Steve Martin, "All I've ever wanted was an honest week's pay for an honest day's work."

You and I could make Mr. Darcy wages on an hour of work a week, providing that we could find someone willing to pay it :-)

True, the income comparison is spurious, but the followup statistic is directly comparable:

> Using the annual yield to derive asset [value], the author in another paper put Darcy's net worth at £16.8m - £28m.

I wonder of the figure takes into account the inflation landscape (very low) at that time.

I couldn't go out and buy low risk Gilts and get that income today, I'd need index linked gilts, and they wouldn't be paying 3% after inflation.

A minor quibble - Mrs. Bennet was her mother. Miss Elizabeth Bennet became Mrs. Darcy.

These things mattered in early-19th-century England.

> the author in another paper put Darcy's net worth at £16.8m - £28m. Pathetic! Not even a one-percenter.

You don’t even need £3mn of household wealth to be in the top 1%; less for a individual.

What I've found in looking at historical financial comparisons in the past is that they are inherently unstable / inexact as you get further and further back.

Fifty years ago, even, things fall apart a little. At one point in an early Mad Men episode, some reference is made to whether or not Draper is making $40,000 a year. A basic inflation calculator puts this at about $342K today, but the implication in the show (and in other reading) suggests it likely involved much more purchasing power than $342K implies.

Going back 100 or 200 years, and the economics drift. Prices for goods and for services change relative to each other, so straight-up purchasing power comparisons are hard to establish.

Today, we probably wouldn't parse a $2M inheritance as set-for-life (maybe?), but clearly the implication is that Cosette was, right?

All that is a long way of saying that we can really only know that Darcy was rich, and enjoyed a very healthy income assuming his source assets were protected and working. His friend, less so, but still solidly a member of the correct class.

Agatha Christie once said that when embarking on her writing career she never thought she would be wealthy enough to afford a car, or too poor to afford servants. Things change quite fast.

And I would say that a $2M inheritance is set for life, withdrawing 4% of that should leave you at a steady income of $80,000 a year for doing nothing.

Great quote. Perhaps compare the cost of servants with the cost of having a dishwasher/washer/drycleaner bill, and a car to the cost of a personal jet. Shows how education and engineering and medicine and law have lifted the value unskilled labour to unprecedented levels.

Living off $2M/year is fine, except of course interest rates are now 1% in much of the developed world. Higher returns now requires higher risk.

Agreed! I originally did the comparison to better understand what wealth stratum Valjean eventually attained, was 600,000 francs crazy money back then? Marius' grandfather sent him 60 pistoles monthly (600 gold francs!) was that an exhorbitant stipend? Must have been, as he eventually found work as a translator for 700 francs a year. He pawned his watch for 45 francs, just a little more than a bunch of asparagus! Hugo went into fascinating details about how much things cost in the chapter called "Marius Poor". By these measures Cosette was rich, but we don't know the percentage of the population in possession of 600,000 francs or more. Valjean carried this sum around as a wad of cash. Before this he had buried it in the woods! And at that time Paris had an Exchange. Amazing!

I have a stupid fascination with historical finance in literature myself. I focused on Early Modern Elizabethan literature. Wrote a thesis arguing that Spenser's Mammon in Book II of the Faerie Queene was not so much about the familiar allegory of illicit wealth but rather a vitriolic topical attack on the emerging proto-capitalist financial industry in Elizabethan England and the challenge it presented to the traditional landed aristocracy. The earliest bankers were the goldsmiths and that, if you read closely, is how Spenser depicts Mammon.

A lot of fun and led me down some interesting rabbit holes on Elizabethan monetary policy, the impact of Henry VIII's Great Debasement, and the role of the Royal Mint as central bank. Left with with a deep appreciation for the stabilizing influence of the Federal Reserve.

Anyway, for anyone interested (haha), here's the canto in question:

http://spenserians.cath.vt.edu/TextRecord.php?action=GET&tex...

> The earliest bankers were the goldsmiths

Not according to Charles Kindleberger’s A Financial History of Western Europe. His explanation for this persistent myth is that some British banks could trace some of their antecedents to goldsmiths and it made decent advertising copy. Thus it gets into books about banking written by non-historians and perpetuates itself.

A more common origin for banks was money changers, international traders in commodities and traders in bills of exchange.

Maybe Kindleberger needs to read more Spenser. :)

More likely, Spenser himself accepted the common myth.

Or perhaps his Mammon was loosely inspired by whoever headed the royal mint at the time.

I'll have to pick up that book someday. Thanks.

The prototypical modern bankers were the Fuggers - who were effectively early Europe's Fed, but somehow escaped the attention of contemporary poets.

Your original estimate is odd. The article claims that 40£ was several years of income for a laborer. If we assume 20£/year is equivalent to a day laborer, that’s around 20k$/year (in Texas, where I live, that’s a bit on the low side). That gives Darcy’s income at around 10mm£/year, in modern terms.

I mean, setting aside the ridiculousness of trying to compare economies separated by 200 years.

You're assuming that a day laborer in the UK had income and standard of living similar to a lower-income Texan in 2019. It was closer to that of a lower-income Haitian in 2019.

EDIT: I was a bit low - BoE's inflation calculator puts a £20 income in 1813 at £1,362.94 in 2018, or about the average income of a Haitian today. So let's say, a lower-income Afghan?

I'm not sure how useful the BoE calculator is for that. It's probably more useful to just look at standard of living qualitatively.

Given that a Victorian era lower-class Londoner probably looks more like a lower-class Haitian than a Texan.

I'm less sure how to compare from Austen's era, especially outside of a major city. But things like getting any medical care at all or getting enough food to eat suggests ways that poor people of that era would be disadvantaged compared to most poor people of a developed county today.

I would also caution against focusing on major cities; only around 40% of Brits lived in cities in 1811, and rural poverty was and remains even more grinding than urban poverty.

So, Tim Harford from the BBC/FT did a radio show on this and they say:

Darcy's 10K can be: 1. Inflation adjusted to 838K GBP 2. Earnings power adjusted (as labor purchase price parity) to 9.995M GBP 3. Adjusted by a Per Capita GDP percentile factor to 65M GBP (or income off of capital assets/'Consols' of $3B GBP)

BBC More or Less Podcast: How Rich was Jane Austen’s Mr Darcy? https://www.bbc.co.uk/programmes/w3csvq3g PS- They basically mirror the NOL guy's article's antecedent from '016

And whatever happened to tracking how much money bill gates could drop and not pick up due to the value of his time ? { 1999: https://www.templetons.com/brad/billg.html ;} That was a good frame of reference.

Before the advent of modern shipping it's not terribly surprising. Asparagus was once know as 'the food of kings' and has a limited growing period and requires a fairly large amount of land compared to what it produces. There's only really 2 harvests of asparagus possible one in early spring and the other in fall so absent modern refrigeration asparagus in the middle of winter would have been grown in a greenhouse increasing it's cost.

It's easy to forget these days where we're able to get most fruits and vegetables any time of year we please thanks to shipping letting us get summer produce in winter from the opposite hemisphere but produce has definite seasons and it used to be very hard and expensive to get produce out of season.

"but my paper says one franc in 1830 was about £2.2"

My rule of thumb pre Euro was 10 (French) Francs to the £, so one Franc being worth 10p.

Pounds carried over with the same value during decimalisation, I havent found anything about the Franc changing so if true this is quite a devaluation over the years.

> Pounds carried over with the same value during decimalisation, I havent found anything about the Franc changing

The French Franc was revalued 100-1 in 1960. It's in the second line of the Wikipedia page on it. https://en.wikipedia.org/wiki/French_franc

So one New Franc was worth £220 and is 'currently' worth 10p?

So the best case is the parent already talking about New Francs, in which case my maths was already right.

Or have I made a glaring error ???

I think you're correct that the franc has hugely devalued against the pound in that time. But based on the context from the first paragraph, devchix's post was talking about something different, equating one 1830 franc to £2.2 in today's money, possibly by a "wildly inaccurate" methodology.

The historical exchange rate should not be hard to figure out. Both countries were on a gold standard at that time. One 1830 franc was worth 290mg of gold. One 1830 sovereign was worth 7.3g of gold, or about 25 old francs. So using 1 pound = 10 new francs = 1000 old francs, that's about a 40x decline in the franc/pound rate between 1830 and 2000, unless I've made an error somewhere.

Were talking about large relative declines either way.

Considering their fortunes have ebbed and flowed at similar times. Both were super powers of their day, both are now large developed economies, I would have expected the outcomes to be much closer.

I think George Washington was the richest man in America in his time. I toured his Mount Vernon estate. I wouldn't want to live like that.

I'm not sure any sensible person would.

If only because you'd be rolling a huge pair of dice with respect to health care, dental care, etc. Your children have decent odds of dying young. Women in childbirth. Infections. No modern dental care etc.

Sure, some made it to old age without serious problems. (And people die young today in spite of modern medicine.) But I'll take the bet on today's medicine.

It's not just that. Most everything you did was physical. No indoor plumbing. No ice cream. No fresh vegetables in winter. Itchy clothes. Hardly any books. Travel was difficult, slow, and quite uncomfortable. Lousy shoes. No A/C. Roasting or freezing indoors in winter. Little information about what was happening more than a day's walk away. A rotting mouth. No movies.

Hence "if only." Given sufficient money, you could still have a pleasant life with plenty of entertainment options and reasonable comfort in many climates. [ADDED: Which Virginia is not especially.]

And does what's happening far away really have that much of an impact on my life even today? We're used to knowing all these things but information flow was a lot less even a few decades ago.

For me, dying/pain/etc. is a lot more relevant.

In no way arguing your point, just an interesting fact - George Washington adored ice cream: https://www.smithsonianmag.com/smart-news/george-washington-...

Man I love that stuff. Would love it if you contacted me through my profile, or at least pointed us to the paper you wrote. Right up my alley.

You're kind to ask. The paper was written a long time ago and very thinly sourced, more of a toy of dubious value. As we've agreed in this thread, attempts to directly translate asset values and income from a radically different economy will be frustratingly wrong.