The last time cotton prices were this high, the Deep South had just lost almost its entire slave workforce during the American Civil War. ……The problem 150 years later is not labour but floods – causing major concern in cotton producing areas of Australia, Pakistan and India.
Really, just no.
By Friday, cotton futures had fallen slightly by 4, or 2pc, to $1.68 per pound, but it remains unusually high.
What were cotton prices in that war?
The price of cotton soared from 10 cents a pound in 1860 to $1.89 a pound in 1863-1864.
No, we cannot say that $1.89 is higher than $1.68. For there\’s been more than just a little bit of inflation over that time.
By the general price level $1.89 in 1864 equates to $26.60 today. By the skilled workers\’ wage, it equates to $471. Unskilled labour to $235.
Now we can argue a bit about which of those numbers is appropriate to use as our measure. Using wages shows how many hours someone must work to get the good: probably a better way of measuring prices over the very long term. Using the general price level doesn\’t tell us much about the change in the consumption basket etc, so it\’s probably more useful for the short and medium term.
Whether a century and a half (ish) is medium or long term is up to you.
But it just isn\’t true in any meaningful sense to say that cotton is now more expensive than it was in 1864.