Rubles and Dollars

[Paul B. Gallagher]

Bill Leidy wrote:

> Dear Paul, Ani, and the rest of SEELANGS,
>
> Those conversion rates ($6 and $7 per ruble) seem awfully low to me.
> We know from the opening pages that raggedy know-it-alls like Lebedev
> make 17 rubles per month (which, according to these conversion rates,
> would be about $100 per month), and that talented calligraphers such
> as Myshkin can earn a starting salary of 35 rubles per month (a bit
> more than $200 by these conversion rates). No matter what the actual
> cost of living was back in those days, I assume that most American
> students won't be able to imagine anyone possibly living on $100 or
> $200 per month in modern times, so I would give a higher conversion
> rate as a ballpark figure.

We must account for the fact that not only wages, but also the cost of 
living in various places and times can vary widely. In our modern 
economy, for example, American textile workers cannot possibly compete 
with Chinese textile workers because the cost of living is so much lower 
in China that Chinese factories can pay their workers much less. If a 
Chinese worker must spend $200 a month (yuan equivalent) to feed, 
clothe, and house himself, then a salary of $1000 would be luxurious 
even though it's right at the federal poverty level here.

American students' imagination aside, there are places in the world 
today where people get by on very meager wages. See for example:

<http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=China&country2=United+States>

... where we learn that the median monthly disposable salary after tax 
is $641 in China and $2,998 in the U.S. You can do additional 
comparisons here:
<http://www.numbeo.com/cost-of-living/compare_countries.jsp>

Here are some results (median monthly disposable salary after tax) for 
low-cost countries:

Afghanistan $533
Bangladesh $302
Cote d'Ivoire $378
Eritrea $442
Timor-l'Este (East Timor) $180
Zimbabwe $550

Since the discussion has turned public, here's what I sent privately:

-------- Original Message --------
Subject: Re: [SEELANGS] the value of 19th c. rubles
Date: Mon, 03 Sep 2012 18:39:51 -0400
From: Paul B. Gallagher <paulbg at pbg-translations.com>
Organization: pbg translations, inc.
To: Kokobobo, Ani <akokobobo at KU.EDU>

Kokobobo, Ani wrote:

> Dear all,
>
> Does anyone have any suggestions on how to explain the monetary
> value of nineteenth-century rubles? I haven't found the current
> conversion rates especially helpful in this case. I am sure it is all
> relative, but what I'm looking for is a way to match up 19th c.
> monetary sums to a value system that students would understand. ...

As a starting point, I would say you need to compare the purchasing 
power of the currency in terms of comparable goods and services. So for 
example, if an ordinary middle-class diet costs $10,000 a year in 
today's currency (just to pick a number out of thin air), then the 
19th-century ruble equivalent would also purchase an ordinary 
middle-class diet for a year.

Unfortunately, with so many differences in the cultures, many items in a 
contemporary market basket will not be comparable. If you look at what 
the CPI uses, you'll see:

<http://www.bls.gov/cpi/cpifaq.htm#Question_7>

What would be the counterpart of "gasoline"? Horse fodder?

For basic procedure, see:
<http://www.ehow.com/how_10045736_calculate-cpi-market-basket.html>

I'm not an economist, but I think this should be a good starting point 
for your thought experiment. You might enlist the students to devise the 
market basket as a way of learning about 19th-century Russian life.

-- 
War doesn't determine who's right, just who's left.
--
Paul B. Gallagher
pbg translations, inc.
"Russian Translations That Read Like Originals"
http://pbg-translations.com

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