Grub Street economics

New Grub Street is pretty useful for information on Victorian economics. In chapter 31 impoverished writer, Harold Biffen has only two pence and two farthings to buy a loaf. Luckily he remembers a baker's that sells bread for that price. In decimal currency two old pence and two farthings is about 1p, and the cheapest loaf you can buy now is probably about £1 if it's a small one. In the same chapter Biffen asks his friend Reardon to lend him ten shillings. This amount is described as a half sovereign. Ping, I googled sovereign, and wikipedia says that in 1895 a sovereign had a face value of £1 but the purchasing power of £150 in 2007. That sort of makes sense. A middle class living income was £150, which corresponds to £22,500, about right. Ed Reardon is offered a job for £150 a year, which his wife Amy is not exactly thrilled about. Alfred Yule complains that he has never earned more than £250 a year, and most years a lot less. £250 would equate to £37,500 in 2007, so that sounds about right. £400 a year is described as a comfortable standard of living. However, when you get to working class incomes, the equation seems to break down. The minimum living income for a single person appears to be £50 a year. This is what Ed Reardon earns when he worked as a clerk at a hospital.Incidentally, £50 a year is also what George Gissing gave his estranged first wife after they had separated. £7,500 a year would have been a very small amount to live on in 2007. It's way below minimum wage on a 40 hour working week. Would it have been possible to rent a bedsit and afford to eat? There are some complicating factors. Most middle class homes employed at least one servant. Even Ed and Amy Reardon when they were struggling to live in a garret on Ed's income could employ a young servant girl. The Yule household appears to employ at least one adult servant. Also, taxes were comparatively low, and I think rents were relatively low too. Food was probably comparatively expensive compared to now. Next to the poorhouse there was very little social welfare. The sort of poverty that Biffen suffers is pretty rare today, I think. I don't think there are many people who have to pawn their clothes and not eat some days. However, Biffen's poverty does not sound all that unusual among the working class for those days. I read in a biography of Gissing that when he went to see his recently deceased first wife's room, the only possessions he could find was her dress hanging on the door, and some bread crusts and some of his letters in a drawer. It seems that to live a middle class standard of living required a lot more money than a working class standard of living. Keeping things clean took a lot more effort. I suspect the working class were a lot dirtier than the middle class. I think this explains a lot about the class society back then. The middle classes must have lived in dread of poverty. No wonder they sent their children to private schools, spent whatever money they had on keeping up appearances, and were reluctant to marry beneath themselves. No wonder so many 19th century novels were about women marrying richer men.

This book explains something else I have wondered about 19th century Britain: why was there virtually no inflation? Actually, there were periods of inflation, but these were countered by periods of deflation. I think the answer is that rich people lived off the interest of their capital. The rich were reluctant to eat into their capital. So if someone had £10,000 in the bank, 4% annual interest would amount to £400 a year - very nice! Poor Marian only ends up with £1500 so the interest on that is only £60 a year - useful, but not enough to provide for a middle class household with three adults.