What you need to know to compare prices from the past with modern

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

Who of us did not want to understand how much the pre-revolutionary worker or archers actually received under Peter I?

Were Russian tsars rich? And how did the Russian nobles live? What luxury items did they have at their disposal? How much did they cost? These are the questions that any historian is forced to answer when he talks about the life of the past.

But it’s not enough to just write “the suit cost forty rubles” - you want to understand the real value of these rubles, “convert” them into modern money. I believe that such a “transfer” is impossible - because the value of money cannot be assessed in isolation from the economic situation. And in the past it was fundamentally different.

The past covers many different eras, and the ruble of the Moscow Kingdom of the 17th century and the Catherine's ruble are completely different money. In addition, you need to take into account the difference in the price of silver and copper money in the Muscovite kingdom: silver coins were intended for trade with the West, and copper coins - for internal settlements, while the copper coin depreciated very quickly (in 1662, 15 copper coins were given for 1 silver kopeck), which eventually led to a riot (Copper Riot of 1662). Since the era of Catherine II, paper money was introduced in Russia - and from that time on, the difference in the value of bank notes and a silver coin must also be taken into account.

In order not to go into details of these estimates, they usually try to compare the price of a thing with the price of a kilogram of potatoes or a kilogram of meat, for example. But with such a comparison, it is necessary to take into account the context: for example, before Catherine's time, potatoes were not massively grown in Russia, so you will need to look for some other product to compare.

The pricing of meat in the pre-industrial era, in the absence of modern farms and abattoirs, was fundamentally different - meat was consumed by peasants very rarely, on holidays - cows in ordinary families were kept for milk, not for slaughter, and so on. More broadly, any prices from the past are very relative - sometimes we don't even have all the pricing information.

You can try to compare welfare in absolute terms. For example, we know that in the first half of the 19th century, a poor peasant family spent about 30-50 rubles a year - for the head of such a family, the ruble was a great value. For example, such a peasant saved up a year, or even several years, for a new plow horse. However - again - it must be borne in mind that money in that era was much easier to lose.

Before the appearance of banknotes and securities, money minted from precious metals at state mints was provided not with a "gold reserve", but with its own value - and therefore, much more often and more easily than now, it became the object of theft.

Going to the market for the same new horse, the peasant often carried in a small bag all his savings for a long time. They rob at the bazaar or cheat on the seller - and he is practically a beggar. By the way, it was the inability of the majority of serfs to manage financial affairs that very seriously tied them to their "own" landowner, who could help his serfs with transactions and business issues.

The landowners themselves were also often not masters in financial matters. After the abolition of serfdom and the introduction of a system of ransom payments by the state, the landowners were in possession of securities - five percent redemption certificates for ransom loans on estates in which the former serfs were quitrent.

To receive interest on these securities, the landowner had to present a redemption certificate to the state treasury - or he could generally cancel the certificate and exchange it for bank notes. The state gave the landowners a financial instrument that they could use to trade on the stock exchange and increase their wealth. But not knowing how to use it, most of the Russian nobles simply cashed out all their ransom certificates and ended up in poverty - it is about such nobles that the play by A. Chekhov "The Cherry Orchard" tells.

Well, in the new Bolshevik Russia in the early years, real financial chaos reigned - the state banned the possession of precious metals and foreign currency and began to confiscate them from the population.

Money was rapidly depreciating, and by the early 1920s, hyperinflation swept across the country. Monetary circulation was stabilized only in 1922-1924. During the 20th century, the country went through a whole series of monetary reforms and denominations of the ruble - so the situation with the monetary system in Soviet and post-Soviet times was no less chaotic and difficult than in tsarist Russia.

So, comparing current and past prices, assessing the well-being of people of the past is a complex task. Such comparisons need to be made according to more than one parameter - it is better to take into account not only prices and wages, but also, in general, the availability and value of money in a particular era.