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A Brief 2,000-Year History of Silver Prices

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For most of history, somewhere between 1/10th and 1/15th of an ounce of silver would buy a day's labor, but today's wages are not nearly as standardized.

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Silver has always been the redheaded stepchild of gold throughout human history. While its beauty, scarcity, and utility have certainly been appreciated since pre-history, silver just isn't as rare as gold and has never been esteemed as highly. For much of history, though, silver has been money. While the average laborer (or peasant) probably never saw a single gold coin in their hands in their lifetime, silver money was a different story.

Pricing Silver

Given that for so much of human history silver was money, it can be a little challenging to talk about the historical price of silver. To a certain extent, it's like talking about the value of a $5 bill in terms of $1 bills. In any case, an examination of prices throughout history shows inexorable inflation, both as the supply of gold and silver increased and as governments increasingly debased their coinage and/or turned to paper money.

While silver is more common than gold, it's not exactly common. The USGS estimates that 23,100 metric tons of silver were mined around in the world in 2011. That compares to the 2,700 or so metric tons of gold that were mined and the 323 million metric tons of iron ore mined by a single company, Brazil's Vale (NYSE:VALE), in the same year. Curiously, that 10:1 ratio between silver and gold shows up again and again – and the estimated global reserves for silver (530,000 metric tons) are roughly 10 times those of gold (51,000 metric tons). It's also well worth noting that of all the silver mined in the history of mankind, an estimated 25% has been mined since 1975 and about two-thirds has been mined since 1900.

Ancient Prices

Before delving into the discussion of silver's historical value, a few starting conditions are important to understand. First, it's difficult to equate modern and ancient labor. A lot of labor in ancient times was performed by slaves and the translations of "laborer" or "craftsman" into modern terms is imprecise at best, as are concepts like the length of a normal workday. Likewise, prices can be skewed by the more primitive state of trade – modern conveniences like wine and spices seem quite expensive in medieval England, but part of that is clearly due to the fact that they weren't produced in England and long trade routes and/or wars took their toll on prices.

Going back to ancient Babylon, we know that workers earned the equivalent of about 2.1 grams of silver per day (about 1/15 of an ounce or a little more than $2 in today's silver prices). At that time, the price of a sheep ranged from 2.6 g to 16 g of silver (about $2 to $16 in today's prices), which compares to recent prices of about $90 to $120.

Apparently it was better to be a laborer in ancient Greece, as typical wages were about 1 attic drachma (4.3 g of silver) in the fifth century and about 2.5 drachmai by 377. In the fifth century, a drachma would buy you approximately 3 kg of olive oil and three drachmai would buy you a medimnos of wheat (about 54 liters). While the price of that medimos climbed to 5 drachmai by the fourth century, it basically still worked out that a day's labor would buy about two weeks worth of food for one person (if they lived on bread alone).

The Romans may have brought many valuable inventions to the world, but debasement and serious inflation are inventions that humanity probably could have done without. Although the Roman day wage of 1.2 denarii (4.2 g of silver) was pretty consistent with wages during the time of the Greeks, there was huge inflation and debasement from the time of Nero through Diocletian and beyond. As the Romans gutted the silver content of the denarius from 3.5 g of 98% silver to 3.4 g of 94% silver on down to 40% and then almost nothing, the price of a "measure" of wheat soared by about 15,000 times over about 250 years.

The Medieval Times

While the medieval period saw a pronounced increase in trade and the growth of cities, it was also marked by wars and plagues that significantly depopulated large swathes of Europe. In many cases, depopulation led to pressures for higher wages and the nobility often fought back with wage controls.

Around 1300 AD, a laborer in England could expect two earn about 2 pounds sterling in a year, or about 672 g of silver (about 2.1 g of silver per day, given the different workweek of medieval times). Likewise, we know a thatcher in 1261 could look to earn about 2 pennies a day or 2.8 g of silver. Thatchers' pay increased to about 3 pence (approximately 4.2 g of silver) in 1341, 4 pence in 1381, and 6 pence in 1481. Along the way, a city "craftsman" could look to earn about 4 pence per day in the 1350s.
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