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Happy in the service of the Company: the purchasing power of VOC salaries at the Cape in the 18th century

  • Sophia du Plessis

    ()

    (Department of Economics, University of Stellenbosch)

  • Stan du Plessis

    ()

    (Department of Economics, University of Stellenbosch)

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 lit-erature 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. The paper’s contributions lie in the breadth of the com-parisons, the inclusion of skilled workers in the comparison and the adaptation of the consumption basket to local conditions and relative prices at the Cape. The results support the hypothesis that at the start of the 18th century, the Cape Col-ony was relatively poor on an international comparison, but as the century un-folded, gained considerably on even the richest contemporary societies.

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File URL: http://www.ekon.sun.ac.za/wpapers/2012/wp012012/wp-01-2012.pdf
File Function: First version, 2012
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Paper provided by Stellenbosch University, Department of Economics in its series Working Papers with number 01/2012.

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Date of creation: 2012
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Handle: RePEc:sza:wpaper:wpapers153
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  1. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
  2. Pim de Zwart, 2011. "Real wages at the Cape of Good Hope: A long-term perspective, 1652-1912," Working Papers 0013, Utrecht University, Centre for Global Economic History.
  3. Robert Allen & Robert C. Allen, 2007. "Wages, Prices, and Living Standards in China, Japan, and Europe, 1738-1925," Economics Series Working Papers 316, University of Oxford, Department of Economics.
  4. Broadberry, Stephen N & Gupta, Bishnupriya, 2005. "The Early Modern Great Divergence: Wages, Prices and Economic Development in Europe and Asia, 1500-1800," CEPR Discussion Papers 4947, C.E.P.R. Discussion Papers.
  5. Robert C. Allen & Jean-Pascal Bassino & Debin Ma & Christine Moll-Murata & Jan Luiten van Zanden, 2011. "Wages, prices, and living standards in China, 1738-1925: in comparison with Europe, Japan, and India," LSE Research Online Documents on Economics 32403, London School of Economics and Political Science, LSE Library.
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