Tuesday, 7 February 2012

60 years of currency debasement

In celebration of HMQ's 60-year reign, The Telegraph reprinted a few pages from 1952:

My eye was immediately drawn to the top right:

Price: 2d. D for denarii — old pence. 2/240 of a pound. Slightly less than a decimal penny: £0.008333.

Today's price?

£1.20. So The Telegraph costs 144 times as much today as it did in 1952. Apply your own hedonic adjustment, but it's hard to argue that today's Telegraph is 144 times better than the 1952 version. Who has benefitted from 60 years of currency debasement?

Even more interesting than the articles were the adverts.

£96.45 (11.5 thousand times the cost of a newspaper) would get you a 300 mph flight to New York with TWA, "Starting May 1st ... subject to Govt. approval".

The advert from Johnnie Walker noted "Maximum prices as fixed by the Scotch Whisky Association".

An advert from City & West End Properties Ltd offered "Unfurnished Mansion Flats in the West End and South West of London at rentals of £400-500 p.a."

I wish they'd include reprints every day. Perhaps a page from each decade, going back to 1900. I'm sure it would give a useful sense of perspective.


  1. You need to adjust for inflation. 2d in 1952 is (according to thisismoney.co.uk) £0–21 today. So it's really only a bit less than 6 times more expensive. Still not six time the value, though...

    1. Hi Alan,

      Sorry if I was unclear. The main point of my article was that we've suffered from inflation. We must ask who imposed this on us, and who benefited from it.

      It is true that prices of goods change relative to one another, and that some (like the Telegraph) rise faster than the arbitrary basket of goods chosen by those who measure CPI and RPI.

      Thanks to technological advances, a flight to New York no longer costs 11.5 thousand times the cost of a newspaper, though it is still concerning that £96.45 would have bought a flight in 1952, whereas that same sum stashed in a mattress probably wouldn't buy you a transatlantic flight today.

    2. If I've understood correctly, modern ecomonies require a small amount of inflation (about 2%), to provide redundancy (in the engineering sense). Note that, in times like the present, where there is little or no inflation, interest rates are close to zero, so there is no incentive to save. No savings = no capital to invest (or lend out) as far as the banks are concerned. Conversely, too much inflation wrecks the ecomnomy completely (think Weimarer Republik).
      No wonder they call economics the "dismal science".
      But I'm not sure everything has got more expensive. When I was a student, a pint of beer cost half a crown (12½p) i.e. about £1–79 in today's terms. I'm not sure about current UK prices, but I suspect you can buy booze at that sort of price in the supermarkets (which didn't sell alcohol in my day). Please correct me if I am wrong.