Price/Cost Indexes from 1875 to 1989; Estimated to 2010Hart, Michael
General
Price/Cost Indexes from 1875 to 1989; Estimated to 2010
Hart, Michael
Cost and standard of living
Back in those days extra floppy drives from Apple or IBM for
around $325 to $475 respectively [and don't forget that many
of these floppies were single sided and held around 150K but
we only tend to remember the double sided floppies. If your
memory includes "flippies" you know what I mean. (Flippies:
single sided floppy disks which were notched so you could do
a "flip-over" with the floppy, and use the other side, which
was supposed to be unusable but which in most cases was just
as good as the side you actually paid for. Don't forget the
floppy disks started at $10 each, with dollars that were the
equivalent of $2 in 1993 dollars: so, each time you punched
a notch and turned one over, you basically gained $20 in the
money we use today. You then also needed only half as much,
in terms of physical shelf space, to store as much data. It
might stagger the present day mind to actually think of that
monstrous storage problem we had when we wanted to store any
huge books, such as the Bible, on single sided floppies.
The two points I want to make here are that for the cheapest
of these machine prices back then, you can now get a machine
that is 100 times faster with 100 times the disk space: and
that the same is true for the most expensive AND that prices
today are actually half what they appear to be in comparison
to the prices listed above.
So, when you spend $3,000 on computer gear today, you are in
fact only spending half as much as was spent back in '79 for
the Konan drive. . .you are really only spending $1,500 from
1979. . .due to changes in the value of the dollar as per an
assortment of Consumer Price Index figures [none of which is
in agreement with any of the others, so you are encouraged a
bit to look up additional information on the subject. These
figures [below] are presented only to provide a continuum to
make comparisons. Actually these figures are a conservative
estimate [as most government figures seem to be [example, no
double digit inflation for any year since 1947, which was an
extremely good year, by the way.]
So, while other prices were rising to make up for weakenings
in the dollar. . .you are probably aware that your expenses,
in general, have just about exactly doubled since 1979, when
we bought that first hard drive for $3,000. Those $3,000 in
a bank account that created no real profit other than enough
interest to keep up with the Cost of Living increases, would
now be $6,000 and would buy you a computer more powerful and
with more RAM and hard drive space than most of you want. A
Pentium with 8 megabytes of RAM and adding several gigabytes
of hard drive, or a 486 with even more RAM and hard drive.
While the prices of everything else had been going up at 5%,
6%, 7%, 8%, 9% a year, the price of computers has gone down,
at about 33% per year. . .a truly astonishing rate that lets
you buy something hundreds of times better for less than the
price was just 10 or 15 years ago.
Public-domain text, read in full here on John Shaqi.
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