Price/Cost Indexes from 1875 to 1929
by
United States
October, 1993 expanded for release in November, 1993
[Originally published as a column entitled:
THE RATE OF CHANGE OF THE RATE OF CHANGE by Michael S. Hart
In The Electronic Journal of Virtual Culture]
Many of you are aware that the $3,000 you spent on computerslast year could be replaced by $2,000 spent today. However,only recently have I actually purchased computer gear that Ibought with dollars that were only half as valuable as thosewith which one of my drives was purchased in 1979.
Many of you are aware that the average personal computer was$5,000 - $10,000 some 10 - 15 years ago when Apples and IBMsfirst appeared on the scene, but you might not be aware of atrend beyond the price reduction that makes today's computerprices an even better bargain in comparison.
In fact, computers today are TWICE as good a bargain as theyappear in comparisons with those early computers, and it wasalready looking as if they were bargains beyond all belief.
In earlier articles I mentioned the fact that today's cheapy486 DX2/66 computers were 100 times as fast as the originalsfrom IBM, and were likely to also have 100 time as much harddrive storage. [After all, the original PC didn't even havehard drives, and still cost a fortune.]
Here are a few examples to jog your memory:
These are "bare bones" prices for the computer systems; whenfilled out with color monitors, printers, ports, modems, andthe rest of an average computer system, these prices usuallydoubled, and the prices I usually quote as modern comparisonfigures include VGA, printer, modem, mouse, and software.
1979 Konan 5M External Hard Drive Kit for Apples $3,0001981 PC-DOS CP/M 1-Floppy 128K-RAM serial-parallel $2,0001983 PC-XT added 3 slots and 10M hard drive $3,6001983 PC to XT Upgrade kit with 5M ST-506 Hard Drive $1,5001984 PC-AT 1.2M Floppy 256K-RAM no ports 3x faster $4,0001984 PC-AT Enhanced added 20M hard drive no ports $5,800
[These two Hard Drive Kits both included the ST-506 drives—but the Apple was External while the IBM was Internal: bothwere from third-party vendors.]
Back in those days extra floppy drives from Apple or IBM foraround $325 to $475 respectively [and don't forget that manyof these floppies were single sided and held around 150K butwe only tend to remember the double sided floppies. If yourmemory includes "flippies" you know what I mean. (Flippies:single sided floppy disks which were notched so you could doa "flip-over" with the floppy, and use the other side, whichwas supposed to be unusable but which in most cases was justas good as the side you actually paid for. Don't forget thefloppy disks started at $10 each, with dollars that were theequivalent of $2 in 1993 dollars: so, each time you puncheda notch and turned one over, you basically gained $20 in themoney we use today. You then also needed only half as much,in terms of physical shelf space, to store as much data. Itmight stagger the present day mind to actually think of thatmonstrous storage pro