Towards a Basic Currency Conversion
1. Conversion: Early 300’s – Tetrarchy and Constantine – From: 1 pound of gold (300 CE), To: 1 US$ (2008)
I would use multipliers of $37,500 to $150,000 for a pound of gold (using workers wages – comparing US now and 5th century wages)
The range is based upon the Roman workers wage used: unskilled workers = 1/10 lb gold/yr, legionnaires = 1/2 lb gold/yr – this also varied greatly over time, and varied by form of payment (ie in-kind(food), or money “wages”).
(compare to Gibbon, who would use the 1780 exchange rate of $1,200 (416 pounds sterling per pound of gold = approx $1,200 @ 1:3 Lbs Sterling/US$) – money was much more dear in the later empire than under the beginning of the British empire (Gibbon’s day). Gibbon’s error lies in the change in purchasing power of precious metals between the Late Empire and the 1780’s, and the change in the ratio of gold to silver (he uses 40:1, but in ancient times, due to the outflow of gold to India and the East, the ratio was much higher – possible a 100 times higher).
(Per the Roman Economy page this blog )
(follis = bronze coin)
5th century = 6 folles/day = wage, approx 200 folles = solidi, approx 75 solidi per lb of gold
so… wage per day = .0004 lbs of gold
or 4/100’ths of 1% lb of gold = days wages
(an unskilled person would earn less than 1/10 lb of gold per year, or it would take 10 years to earn a lb of gold, a soldier earned 1/2 lb gold per year)
use 15,000 as low unskilled annual US wage average = 300/day (5 day week, 52 week year)
(NOTE: Obviously a two-tier economy of Gold/Bronze (and probably barter here), unlike the current US economy.
There is a huge disparity in ancient times between the Gold economy and the silver/bronze economy as a lb of gold today would cost 60/.0004 or $150,000 at bronze Constantine prices)
but still, shows the cost in money of ancient projects – a multiplier of approximately 150,000
2. 1780’s – Conversion – From: 1 pound Sterling (1780), To: 1 US$ (2008)
(Basic Currency Conversion in Gibbon)
How did I arrive at this?
Gibbon often converts ancient coinage quotations into metallic pounds sterling when he quotes prices. He is one of the first English historians to try and relate ancient prices to current (late 1700’s) prices of his day – and he does it well, and often in his narrative. Without second-guessing all his valuations (which actually would probably be a good idea) – I’ve used a (very debatable) combination of calculators to try and find a multiplier to use to get from the 1780’s to 2009 – taken from Measuring Worth.com – a very interesting website for converting dollar/pound amounts into current values.
To change ONE pound sterling (1780) into ONE Dollar US (2008)
How did I come up with these miraculous multipliers?
The above are based on the calculations below multiplied by 1.11 (to get from 1830 data to 1780 data)
This from Measuring Worth.com
Five Ways to Compute the Relative Value of a U.K. Pound Amount, 1830 to Present
Current data is only available till 2008. In 2008, £1 0s 0d from 1830 was worth:
£75.94 using the retail price index
£92.64 using the GDP deflator
£832.06 using the average earnings
£1,159.55 using the per capita GDP
£2,986.68 using the share of GDP
Getting from 1830 to 1780
Using Average Earnings From 1780, we get an index of 46 (1913=100) (meaning prices approx. doubled between 1780 and 1913) – as of 1830, the index was 47 – which is an approx 10% rise between 1780 and 1830 – factoring backwards, we add back about 91 to make 1780 the start point – thus – 832 + 91 = 923. This is about 111% of the 1830 amount.