‘The big education for me is that civilisation is fragile and can be destroyed in a heartbeat' - Jeremy Brade, former peacekeeper in Sarajevo.

Wednesday, November 07, 2018

War and inflation

The Daily Mail is currently reproducing back issues from the First World War.

Here's something I suddenly noticed:

Not a fluke:


The same newspaper now costs 70p - equivalent to 168 old (pre-decimal) pennies.

That's not particularly freakish: using the site linked above, the general rise in inflation between 1914 and now means £1 then was worth £109 today.

War's effect on inflation:

1914 - 1918: 51% increase.
1939 - 1945: 51 % increase.

The "oil shock" of the 1970s was war by another name:
1974 - 1978: 94% increase.

But inflation is not inevitable.

In 1800, midway through the Napoleonic wars, prices surged 36.5% - but actually fell again over the next 15 years.

In fact, between 1800 and 1900, prices fell overall by 11%.

Money used to be a good store of value, when we concentrated on trade and industry, not war.

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