The 1492 trip by Christopher Columbus took two years of lobbying before the king and queen of Spain approved 2 million Spanish maravedis to fund the trip. A professor has calculated that would be comparable to about US$1,000,000 today.
The cost seems low to me. I’ll look at that more later.
Crew size was 87 according to this article. The accountant in me is driven to calculate the cost per crewman. That would give an average cost of $11,494. I’ll round that to $11,500 and ignore any adjustment for several crew members who died on the trip.
His trip took two months, nine days, which I calculate at 70 days (30+31+9).
In that post I calculated that the implied value of a bound New Testament, hot of the press from the first printing, cost something in the range of about $900 in terms of today’s currency.
I’d like to work through what that implies about the value of gold back then.
What is a Gulden?
It is a gold coin used in Germany. A few minutes of research does not quite explain its weight or purity. The most helpful thing I found is an article from Money Museum which describes a number of Medieval Currencies:
Comparing prices and values over a long period of time is tough to do.
For example, how can we compare the cost to live for a year in the Viking Age to today? How can we understand the cost of a sword that cost X ounces of silver?
This involves not only converting the value of silver then to now but also adjusting for the very low standard of living then (you hope all your family survives the winter and hope you live long enough to see a grandchild from each of your children) to the high standard of living with long life expectancy today.
One way is to look at the value of something back then and the value of something today.
This post looks at the value of a cow today in order to provide some frame of reference for ancient times.
Data is from this site. A lot of other sources could be used and other years might give different results. The accuracy of the valuation of Alexander’s loot is only accurate to one or two significant digits. The needed estimates and assumptions will leave any comparisons accurate to only one significant digit. Actually, by the time my calculations are finished, the amounts will probably be accurate to maybe overestimating 20% or perhaps underestimating by 100% or 200%.
Thus, more precision in the market capitalizations is irrelevant.
Average income across the planet is now $33 a day, which is also about equal to average income in Brazil today or in the US back in 1941.
Income in places like the US and Sweden are 3 or 4 times the planet average.
Average income per person was about $3 a day from about 1800 all the way back until humans first appeared on the planet. Dr. McCloskey says daily income sometimes in some places rose to $6 or $8 for a while but slipped back to the $3 range.
For illustration of what $3 per day looks like, consider Haiti or Afghanistan. In those two places, the current PPP income is $3.
So where does that leave us for a comparison? Consider this purchasing power parity analysis.
$3 – For all of history until about 1800 average daily income was about $3.
$33 – Today average income is about $33 in Brazil or a worldwide average.
$132 – Today average income in the US and Sweden is 3 or 4 times higher than the world average. The specific days point is $132 a day in the US in 2011.
Going from $3 to $132 is an increase by a factor of 44.