Apr

3

 Apparently, in the mid 1920s, a washing machine and a Ford Model T both cost around $300.

The ratio of those prices has changed dramatically.

I wonder why?

Shane James writes:

A magnificent relationship to ponder.

Richard Owen adds: 

Another strange example of deflationary monetary flows is that in the 1990s, when Operation Tuxedo stopped the December flow of 120k MDMA tablets, 108kg of amphetamine and 60kg of hash into Liverpool, armed robberies of bookies and posts offices in Merseyside increased by 80% the following Jan and Feb.

Pete Earle writes:

My off the cuff answer: the political machinations surrounding auto manufacturing (labor, corporate and military acquisition, etc.) leads to a large degree of government intervention, price controls, etc., in turn producing distortions, whereas washing machines are (far) less 'corporatistically' engaged. Also, a washing machine is still, for the most part (excepting, I guess, credit cards) an outright purchase, where rarely if ever is a car purchased without some sort of long-term financing. (Although the latter may be effect, and not cause.)
 


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  1. Jayson on April 3, 2014 6:41 pm

    Great question. Being dubious of such round numbers, my googling tells me that a Model T was $260 in the mid-1920’s [wikipedia] and a washing machine was $60-$150. Accurate prices are hard to find.

    That said, even with a relationship of 1 to 4, car prices easily outdistance washing machines. I’d suspect that if washing machines had to be made of certain materials of a certain strength, undergo rigorous testing with dummy clothing, be installed with 20 airbags, designed with custom parts that only the manufacturer can supply, complied with warranties and safety recalls due to sudden acceleration of the spin cycle and so on, I’d suspect that price margin would close quite a bit.

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