History's Revenge: Discussing Living Standards in Global Comparison.Thecase ofRio de la Plata, 1700-1850

DJENDEREDJIAN, JULIO; MARTIREN, JUAN LUIS,; FRID, CARINA

Boston

Congreso; World Economic History Congress; 2018

World Economic History Association

In the last decade, discussions on living standards in the past havebeen, and still are, intense. One of the main issues is how tomeasure purchasingpower in differentregions of the world, wheneverpoorlycollectedand comparabledata are available. Monthly salaries as compared to ?bare bone baskets? (BBB),in the terms stated by Allen (2001), is perhaps the most widely used strategy.But it raises serious problems. Firstly, monthly salary, prior to modern times,was not necessarily a universal useful expression of purchasing power, orincome. Most cities, or regions or countries, relied on slaves, or on non- paidforms of work; also, workers were usually part of family groups, more or less extended,so thatsalaries were only aportion of thewhole family income. Frequently, there were also salary add-ons (food, shelter)whichneed to be accounted. The relationship between patrons and workers was alsocasted by very different cultural traditions, moral issues, economic reasons. Manyworkers' traits had to be paid for: loyalty, subservience to orders, docility,availability, and much more, all featured by the strong moral frame of the AncienRégime. Consequently, the abovementioned issues determined different features for salaries in such way thatitistruly difficult to agree that salaries aresimply interchange of money forservices; in any case, no direct relationship between a nominal monthly salaryand the cost of living is apparent.Secondly, there are also serious concerns on the representativeness ofthe BBB. It is not unusual to findthat, in the past, each region had a distinctstructure ofconsumer basket. Some cities, or countries, relied mainly on onlyone basic subsistence good: e.g., maize in Mexico, or bread in France. But manyothers relied ontwo or threegoods, and, most importantly, prices of these goodschanged asymmetrically, granting most people access to a minimal subsistencelevel, avoiding death by hungereven during the worst economiccrisis. There werealso non-basic but irreplaceable goods, widely consumed for cultural oreconomic reasons; their demand stood steadilyeven under highprices short-cycles.There are good reasons to find new ways to offer better strategies forcomparisons. This paper focuses on indicators based on unskilled worker?s daywages (not monthly salaries), as compared to a basket defined onconsumptionandavailability of goodsin that region.The calories of this basket were carriedout to match 1941 unities of Allen's BBB, although an actual daily basket wasmuch stronger. This studyalsoseeks to prove that day-wages implied a kindof contract associatedwithsimple interchange of money and services than monthly salaries did. Comparison with Allen?sindicators shows extremely different results, our method being the first one to approachthe resistance level ofthe purchasing power of a day wage, throughout a century and a half (1700-1850).That is, it reasonably portrays the equilibriumexisting between supply anddemand of labor. Moreover, it shows in all its depth the impact of the economiccrisis, particularly duringthehardest one(1821-25), whereas the implementationofAllen?s methodology proved to be unable to identify any crisisin those years.  ReferencesAllen, R. (2001),?TheGreat Divergence in EuropeanWages and Prices from the Middle Ages to the firstWorld War?.Explorations in Economic History(38), 411-447