Friday, April 8, 2022

It supposes what is far from truth, that the value of money is always the same

Samuel Johnson discusses the principles of Purchasing Power Parity.  From A Journey to the Western Islands of Scotland (1775) pp. 366-367 by Samuel Johnson. 

Of the proportion, which the product of any region bears to the people, an estimate is commonly made according to the pecuniary price of the necessities of life; which is never certain, because it supposes what is far from truth, that the value of money is always the same, and so measures an unknown quantity by an uncertain standard. It is competent enough when the markets of the same country, at different times, and those times not too distant, are to be compared; but of very little use for the purpose of making one nation acquainted with the state of another.

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