QUESTION: In Andrew Roberts’s new biography, Churchill: Walking with Destiny, there is a paragraph at the beginning that gives the reader calculations for what the Pound Sterling was worth from the time of his birth to the present.
Either this is muddled or I am hopelessly confused. It would make more sense (to me, at least) if it were to have begun “1 pound when Churchill was born in 1874 would have been worth 80 pounds today,….etc.”
The matter is of serious interest to any reader of this very interesting book since the 1000 pages of Roberts’s text deal with Churchill’s inheritance(s), his contracts with various publishers over the years, his subaltern’s pay, etc., etc. Even setting the information out in some kind of table would help since the amounts range from a 5 pound bet to book advances worth millions.
ANSWER: You are correct that this is backwards from the way we talk about relative value and the phrasing is misleading. What we would say is that £1 from 1874 has a relative value of over £80 today. Of course if Mr. Roberts had consulted our website he would have been able to give his readers a much richer comparison of values in the past.
From the UK Relative Value Comparator
If you want to compare the value of a £1 0s 0d Commodity in 1874 there are four choices. In 2017 the relative:
real price of that commodity is £88.25
labour value of that commodity is £501.30
income value of that commodity is £685.20
economic share of that commodity is £1,586.00
If you want to compare the value of a £1 0s 0d Income or Wealth , in 1874 there are four choices. In 2017 the relative:
real wage or real wealth value of that income or wealth is £88.25
labour earnings of that income or wealth is £501.30
relative income value of that income or wealth is £685.20
relative output value of that income or wealth is £1,586.00
If you want to compare the value of a £1 0s 0d Project in 1874 there are three choices. In 2017 the relative:
real cost of that project is £93.68
labour cost of that project is £501.30
economic cost of that project is £1,586.00