We are starting to see some guesses about the economic damage from the shutdowns driven by the pandemic.
When you read about the 10 million people who have filed for unemployment in the last two weeks and consider there will be millions more and the unemployment will continue for another month or two, ponder the ripple effects.
That shock of unemployment translates into cars not purchased, summer & Christmas vacations not taken, conferences not attended, college enrollment delayed a year, fancy wedding receptions never planned, and house renovations postponed by a decade.
The proposed new overtime rules that would have required overtime pay for anyone earning less than $47,476 a year will not go into effect. I do not know if any parties will try to file an appeal, but doesn’t seem to me that is very likely.
The federal judge who issued a temporary injunction last fall has issued a final ruling that the proposed rules violate federal law. The reasoning (if I understand a condensed explanation correctly) is federal law includes a duties test which the proposed rules would essentially make irrelevant.
Alexander learned to appreciate the value of a Navy. One data point is that in 334 BC he had 200 ships operating in the Aegean sea. No quantification mentioned of naval forces elsewhere at that or any other time.
Figuring out how much Alexander spent to field his military forces is a game of stringing together many wild guesses. The author accumulated his own long string of guesses and assumptions for small units. He also quotes several other studies.
Barron’s suggests Mansa Musa, the Emperor of Mali in the 1300s, was the richest man who ever lived.
Since I firmly believe that I am richer today than John D. Rockefeller was back in 1916, I would also insist that I am, right now, richer than Mansa Musa was in 1324. But that isn’t the point of the story. I’ll mention travel costs momentarily.
Prof Holt provides a couple of ancient estimates of the total haul in Persia. Here is a recap:
50k talents – Susa
120k – Persepolis
6k – Pasargadae
26k – Ecbatana
That gives a point estimate of 202k talents. Back out some poetic license exaggeration and add an amount at Babylon about equal to Susa (author’s estimate) gives me an estimate of about 225k talents, give or take. That is only the precious metals without art, statuary, spices, clothes, pottery, or gold inlaid stuff.
In addition, Darius fled with maybe 8,000 talents, Alexander paid bonuses of around 12,000 talents to his soldiers, with another 2,000 talents to Thessalain soldiers. There was enough stray coins found a century later to mint 4,000 talents of coins. That is around another 26,000 talents or so of additional bullion. Add in the unquantifiable amount soldiers looted and all the non-bullion treasures means there was an incalculable amount of wealth looted from the Persian empire.
I’ll work with 202K point estimate, plus 50K from Babylon, less 25K for poetic license, plus 26K sundry disposition. That gets to a point estimate of 253K, with my very wild guess of a margin of error of minus 50K to plus 100K. Let’s work with a 250,000 Talent estimate. That means I’ll roughly estimate Alexander looted 250,000 talents of silver-equivalent from Persia.
Total haul during Alexander’s extended raid around the world
The total haul from looting is estimated by the Prof. Holt as 69( X) + 216,820 talents, where X is an unknown amount from one raid or battle. The total is unknown and unknowable.
Shortly after that estimate the author adds in tribute from conquered areas that were not looted in return for payments and loyalty.
Total proceeds from the wars is then estimated in a formula expressed as 81.67( X) +311,761.
The number two man in the Persian Empire offered a bribe of 10,000 talents to the king in return for permission to kill off all the Jews living under the authority of the king. Today’s question: what would the amount of that bribe be worth in today’s money?
The Old Testament book of Esther tells the story of Haman plotting to kill all the Jews living in the Persian Empire. Esther then told King Xerxes about the plot. The King executed Haman and allowed the Jews to defend themselves from those planning to exterminate them. The Jews survived. Those who expected to slaughter them did not. That is the short version. For the full details, check out the book of Esther.
Hers is a wonderful story of realizing God put you in a place to do a job that only you can do. So many other delightful and encouraging aspects of the story. If you haven’t looked at it lately, check it out.
There is one particular verse in the story which overlaps my discussion of Alexander the Great looting the Persian Empire. …
After developing a few points of reference for comparing ancient finances to now, I can get back to pondering the value of loot Alexander the Great stole while on his military rampage, I mean campaign.
I am building some reference points for my ongoing learning about ancient finances. (If you couldn’t tell, I’m have a lot of fun. This learnin’ thing is cool.)
Here is the value of all the stock listed on the market in the G-20 economies. This is the total capitalization of the companies in those countries.
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.
I suggest you are in fact richer today than John Rockefeller was 100 years ago. If it were possible for Prof. Don Boudreaux to switch places with John Rockefeller’s life and even if he could have a billion dollars after he arrived back in 1916, he would not make the switch. He would rather live as a comfortable professor today than be a billionaire 100 years ago.
Here are three posts to explain this strange idea: first, what life was like 100 years ago, why Prof Boudreaux would not make the switch, and then why Coyote Blog wouldn’t either.
(This post may seem to be out-of-place on my blog discussing accounting and auditing topics. This discussion is part of my enjoyable research on ancient finances and a related thread of how much life has improved over the last 200 years. Since I discuss finance at this blog, it actually fits.)
I will update a few of the stats in the Atlantic article where the author took a shortcut. When I browsed through the BLS report, I noticed some sentences which were repeated nearly verbatim in the article, which is okay since the report is a public document.
A few highlights:
Workers in factories averaged 55 hours a week. The fatality rate across the economy was 61 deaths per 100,000 compared to about 3.3 per 100,000 today.
The following numbers are based on purchasing power parity, which is a tool economists use to compare countries across currencies and across time.
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.
..in the two centuries after 1800 the trade-tested goods and services available to the average person in Sweden or Taiwan rose by a factor of 30 or 100. Not 100 percent, understand— a mere doubling— but in its highest estimate a factor of 100, nearly 10,000 percent, and at least a factor of 30, or 2,900 percent. The Great Enrichment of the past two centuries has dwarfed any of the previous and temporary enrichments.
Let me phrase that another way. The value of what is enjoyed today by an average person is roughly equal to what 30 or 100 people had two centuries ago. That means the constant dollar value of what is consumed and enjoyed has grown by a factor of somewhere between 30 and 100.
Update: I have revised my calculations here. Adjusted the value of an Athenian talent from 10 years salary today up to 400 years salary due to the dramatic improvement in our wealth and standard of living in the last 200 years (the Great Betterment). Also adjusted from estimated average wage in the U.S. of $20 an hour to average wage for skilled construction worker of $70,000 per year. That takes the rough valuation from $20 billion to $1,400 billion, or $1.4 trillion. That actually seems to make sense in a very rough way.
Continuing my discussion of a few tidbits of financial information from Alexander the Great’s military campaigns.
When Alexander approached Susa, the capital of Persia, news of his non-stop victories preceded him. Previous cities he captured surrendered before he arrived. That typically spared most citizens their lives and prevented the torching of the city.
Thus, Susa was handed to him without a fuss, except for a huge amount that Darius III carted off well in advance of Alexander’s arrival.
The author looks at the various reports of how much loot was acquired. Integrating the report that is likely to be most reliable with the other reports results in an estimate Alexander capturing a haul of 40,000 talents of uncoined bullion and about 10,000 talents of gold coin. The gold is roughly valued by expressing the amount what it would be in silver value.
Apparently the Persians didn’t cast most of their precious metals into coins, instead preferring to mint what they needed as they needed it.
Revised value of a talent
Multiple changes have shifted the relative value of gold and silver in relation to each other and in relation to their purchasing power. Instead of converting a talent of silver into ounces and converting that to current dollars at current exchange rates, I’ll start looking at piles of money in terms of average days wages.
Warning: I plan to update my valuation of a Talent based on the radical improvement in living standards that has developed since the Industrial Revolution.