Happy in the Service of the Company: The Purchasing Power of VOC Salaries at the Cape in the 18th Century

This paper contributes to the debate on the level and trajectory of welfare at the Cape of Good Hope during the 18th century. Recent scholarship (for example, Allen 2005) has calculated and compared the levels and evolution of real wages in various European and Asian economies since the early modern period. To this literature we add evidence for unskilled and skilled workers of the Dutch East India Company at the Cape of Good Hope during the 18th century, following De Zwart (2009; 2011), who recently presented evidence for unskilled workers in the Cape for the latter half of the 17th century and the 18th century. We calculate job-specific real wages in a three-step argument; from the narrowest international comparison of wage rates in terms of silver content to one based on a basket of widely consumed goods. This paper adds to this literature by adapting the consumption basket for local circumstances (due to both diet and relative prices) and the comparison for local demographics. We also provide a broader range of comparative statistics on real wages. Finally, we add the real wages of skilled workers to the comparison of unskilled workers offered in the literature to date. While the paper is based on real wages for VOC officials the mechanism we identify as the cause of this rising prosperity (sustained lower prices of consumption goods) would have raised the prosperity of all colonists at the Cape.