Michael Hart

“ In fact, computers today are TWICE as good a bargain as they appear in comparisons with those early computers, and it was already looking as if they were bargains beyond all belief.
In earlier articles I mentioned the fact that today's cheapy 486 DX2/66 computers were 100 times as fast as the originals from IBM, and were likely to also have 100 time as much hard drive storage. ”

“ THE PROJECT GUTENBERG PRICE INDEX FROM 1875 TO 2010 How to use the chart, first set of examples:
The price in current 1993 dollars for any year is found in the first column. Thus you can see that a one dollar item from 1993 will cost about $1.95 in 2010.
The value of the dollars used in any particular year would be found in the second column [value compared to 1993] . A dollar in 2010 will be worth about $.51 1993 dollars while a dollar from 1978-9 would be worth about $2.00 now. ”

“ Actually these figures are a conservative estimate [as most government figures seem to be [example, no double digit inflation for any year since 1947, which was an extremely good year, by the way.]
So, while other prices were rising to make up for weakenings in the dollar. . .you are probably aware that your expenses, in general, have just about exactly doubled since 1979, when we bought that first hard drive for $3,000. ”

“ Many of you are aware that the average personal computer was $5,000 - $10,000 some 10 - 15 years ago when Apples and IBMs first appeared on the scene, but you might not be aware of a trend beyond the price reduction that makes today's computer prices an even better bargain in comparison. ”

“ WHILE IT APPEARS THAT COMPUTERS ARE AN INCREDIBLE DEAL THEY ARE REALLY TWICE AS GOOD A DEAL AS IT SEEMS TO BE COMPUTERS INCREASED IN VALUE TWICE AS MUCH AS IT APPEARS SINCE THE FIRST CONSUMER HARD DRIVES BECAME AVAILABLE IN APPROXIMATELY 1979 WHERE DOES OUR MONEY GO? Many of you are aware that the $3,000 you spent on computers last year could be replaced by $2,000 spent today. However, only recently have I actually purchased computer gear that I bought with dollars that were only half as valuable as those with which one of my drives was purchased in 1979. ”

“ It might stagger the present day mind to actually think of that monstrous storage problem we had when we wanted to store any huge books, such as the Bible, on single sided floppies.
The two points I want to make here are that for the cheapest of these machine prices back then, you can now get a machine that is 100 times faster with 100 times the disk space: and that the same is true for the most expensive AND that prices today are actually half what they appear to be in comparison to the prices listed above. ”

“ Of course, since I used only the real prices we paid for drive after drive, it was only a matter of time until the cost/price index would begin to play an important role, and we now have a database of drive prices long enough that the $3,000 price for the Konan 5M External ST506 Apple Hard Drive Kit in 1979 was a mere half of what it would be in today's 1993 dollars. ”

“ These figures range from the first 5 megabyte hard drives used in our very first mainframe, through the first 5M Apple drive, to the same drive running on an IBM, to our current 1.2G drive that cost less than ANY of our previous drives and has storage for twice as much data. ”

“ Prices stabilized during the rest of the 1920's about $110 until 1930, and the Great Depression, in which prices fell to $88 in 1933 and then back to the ranges of the 1920's— until around the end of World War II, when prices went out of control, rising from an average of around $120 for WWII on the whole to $200 in 1951. It took 17 years to hit the $300 level in 1968 and 22 years to double to $400 in 1973.
From 1973 it took only 9 years to double again to $800 for the year 1982. ”

“ Below you will find a short index of the computers we bought since 1979, and then a price index from 1875 to 2010 in case you want to look up some prices mentioned in certain years a decade or a century ago would actually be today. ”

“ For example, a teenager watching Roger Rabbit mentioned that the $100 Bob Hoskins received for working on the case was an extremely low figure. However, an examination of the figure below for 1947 will reveal that prices then were about 17.5% which would make Hoskins' fee about $600 in our 1993 dollars we use today. . .even if the physical dollars are the same.
So, what happens to the value that was lost from our dollars that do not buy as much by a factor of 17.5% since 1947 ?
Let's imagine for a moment that we are financial wizards and have all the financial connections open to such wizards ”

“ Prices fell from $67 to $47 from 1875 to 1898, in a rather steady progression, and then rather steadily rose back for the next two decades until World War I, until they reached $67 again in 1913 and $69 in 1914, which were the last two years of moderate inflation until after 1919, when pricing dropped from a high of $139 after doubling since 1914. ”

“ The second column is the inverse function, meaning an item costing $1 in 1989 would have cost about $.05 or $.06 back in the year 1900.
You should be able to find some interesting trends such as that prices were falling back in 1875 as industrial growth swept the United States and the West was being developed. ”

“ As an example, while working on these figures I noticed a lack of a period of "double digit inflation" commonly referred to in most all recent reports on these economic trends. I checked this with local sources in the field, and was given the following figures which did include [just barely] some "double digit inflation", but only for a few years of the 70's and early 80's. ”

“ The first 5 1/4 hard drive we got [Seagate-ST506] should be at $6,000 in today's pricing index, or, conversely, we should see that the $850 we paid for a Toshiba 1.2G drive is really only:
$425 per 1200 megabytes. . .in 1979 dollars.
The Database of Project Gutenberg Drive Costs:
1971 $50,000 per 5M at $10,000 for the removable 5M drive chassis each 5M added was about $1500 1979 $3000 per 5M at $600/M [Same ST506 drive as I got in 1983, but 1980 set up as external drive for the Apple] 1981 Prices unstable early on 1982
Prices VERY stable now, falling by about 1/3 per year. ”

“ D-D indicates prices from the end of one year the end of the previous year. . .December to December is the official terminology.
The adjusted rise is the percentage equivalent to the change in adjusted prices. ”

“ As an example, we send a million of our dollars to somewhere we CAN buy gold [it was illegal then for US citizens to have gold, unless they were coin collectors or worked gold in the professions, such as dentistry, jewelry, etc.] ”

“ These are "bare bones" prices for the computer systems; when filled out with color monitors, printers, ports, modems, and the rest of an average computer system, these prices usually doubled, and the prices I usually quote as modern comparison figures include VGA, printer, modem, mouse, and software. ”

“ In short, continue to beware of statistics, and please be advised a bit that while these figures MAY have a certain consistency, within the columns, that there relation to reality is probably far from an intensely accurate reflection of real prices over the century. ”

“ YEAR: 1897 2010 42.856541 0.023334 4% Est. 2009 41.208211 0.024267 4% Est. 2008 39.623279 0.025238 4% Est. 2007 38.099319 0.026247 4% Est. 2006 36.633943 0.027297 4% Est. 2005 35.224949 0.028389 4% Est. ”

“ YEAR: 1952 2010 11.259792 0.088812 4% Est. 2009 10.826723 0.092364 4% Est. 2008 10.410310 0.096059 4% Est. 2007 10.009917 0.099901 4% Est. 2006 9.624915 0.103897 4% Est. 2005 9.254727 0.108053 4% Est. ”