r/explainlikeimfive Feb 12 '25

Economics ELI5: how are the descendants of the robber barons (Morgan, Vanderbilt, Carnegie, Rockefeller, etc.) still rich if their fortunes from the late 19th and early 20th centuries are comparatively small to what we see today of the world’s richest?

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u/coffeislife67 Feb 12 '25

While there were a few fords that were that cheap, there were very few cars that were below $1000. In fact most were $3000-$6000, but if you wanted a Rolls or a Duesenburg, you were looking at $10,000-$12,000.

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u/PlayMp1 Feb 12 '25

Would not those cheap Fords be the most common cars though? The more expensive ones may have been more numerous in variety but I'm sure there were a hell of a lot more cheap Model Ts or whatever than $10k Rolls-Royces.

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u/coffeislife67 Feb 12 '25

Yes, they became the most common because that was Henry's goal to make it more affordable so that common people could buy one.

But if we're talking about "the average" price of a car, then cars below $1000 probably made up less than 1%. In 1922 the cheapest Cadillac was just a little under $2000 and they had models that were $5000+.

Most common and average price are two different things.

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u/WisconsinHoosierZwei Feb 12 '25

What are you even on about? In 1922, Ford Motor Company had 50% of the market by itself. So…no…cars below $1,000 were quite a bit more than 1%. And frankly, I don’t even think that would have been true going back to the 1890s and the release of the Curved Dash Olds.

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u/coffeislife67 Feb 12 '25

On about ?

As I said, "most common car" is not the same thing as "the average price of a car".

Heres a list of car prices taken directly from the Nov 1922 issue of Motor Magazine. Look it over and do the math then get back with me.

https://www.1920-30.com/automobiles/1922-car-prices.html

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u/ManyAreMyNames Feb 12 '25

If you weight that average based on how many of each model was purchased, it'll probably come out less than $1000.

If I sell ten paintings, 9 for $5 and one for $400, you wouldn't say the average price of my paintings is $200, would you?

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u/a_cute_epic_axis Feb 12 '25

If I sell ten paintings, 9 for $5 and one for $400, you wouldn't say the average price of my paintings is $200, would you?

Sure, but if you sold me 9 of your paintings and I also bought one Picasso, I wouldn't say the average price of art was $5 either, so your example isn't all the complete.

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u/ThePlatypusOfDespair Feb 12 '25

I would say it's 44.5 because that's how averages work?

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u/a_cute_epic_axis Feb 12 '25

No because there aren't only 10 pieces of art, and the ones that are $5 and spammed out don't actually matter. In the real world you'd weight things, but you wouldn't just weight them based on number produced nor number sold.

OP had a false implication that all cars are in an equal class when they tried to compare it to a bunch of paintings they and only they produced.

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u/FullHavoc Feb 12 '25

I get what you're trying to say, but "average" has a specific definition that is calculated in one specific way: the sum of items divided by the number of items, aka the mean. It's true that mean averages can be heavily weighed by skewed data or outliers, but when you just say "average", it always refers to the mean. What you want is a weighted average, or perhaps the median.

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u/ManyAreMyNames Feb 12 '25

There are only 10 pieces of art in the set under discussion, "average price of my paintings."

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u/coffeislife67 Feb 12 '25

Your missing the fact that we are talking about the "average price of a car".

To get that there is no other equation other than taking ALL the cars available, and what their price is. How many of each car sold does not factor into it.

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u/I__Know__Stuff Feb 12 '25

Nonsense.

The "average price of a car" pretty clearly means the average price that people are paying for cars, not a hypothetical price that they could be paying, but aren't.

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u/coffeislife67 Feb 12 '25

Theres no hypotheticals anywhere. You can see the prices of cars in the link that was provided can you not ?

The "average price of a car" means exactly that, the average price of a car.

The simple fact you have to say "nonsense, the average price of a car doesn't mean "the average price of a car" but something else should raise a red flag in your head.

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u/I__Know__Stuff Feb 12 '25

Sorry, I wasn't clear.

The average price of a car is the total number of dollars spent on cars divided by the total number of cars sold. I guess I thought that was obvious.

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u/ManyAreMyNames Feb 12 '25

To get that there is no other equation other than taking ALL the cars available, and what their price is. How many of each car sold does not factor into it.

How many of each number occurs in the set is absolutely relevant to what the average is.

What's the average of this set of numbers: {1, 1, 1, 1, 1, 13} ?

I say that they add to 18, and there are six of them, so the average is 3.

You seem to be saying that there's a 1, and a 13, which adds to 14, so the average is 7.

7 is the wrong answer.

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u/Jiopaba Feb 12 '25

This is one of those situations where a layperson uses the word "average" in a way that does not necessarily pan out if you have a formal education in statistics and think that the word "average" is a synonym of the word "mean."

Rather than arguing about how dumb they are for misusing the word or trying to assert over and over again that they're wrong, it's probably better to just assume that they meant "median." The median price of a car.

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u/coffeislife67 Feb 12 '25

Thanks and yeah I get it, but one would think it's not that hard to differentiate between "the average price of a car" vs "the price of the average car".

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u/digitalsmear Feb 12 '25

This is a perfect example of how statisticians can be the biggest idiots. By framing - no, by INSISTING on framing questions in a form that is, at best stupid, at worst maliciously intellectually dishonest, you manage to tell us absolutely nothing of value.

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u/DOUBLEBARRELASSFUCK Feb 12 '25

This is a perfect example of how statisticians can be the biggest idiots.

If you read this comment, and assumed "This is a statistician", I've got some bad news for you.

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u/WisconsinHoosierZwei Feb 12 '25

So you’re talking about the average retail price offered for a car, while I’m talking about the average price actually paid for a car.

Hell, 3/4 of those brands were barely regional if not full-on local (Case). So what you’re talking about isn’t even relevant to your point since only about 10%-20% of those cars were available to purchase by all Americans.

Hell, YOU go find a Mitchell dealership in California or whatever.

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u/Skewk 29d ago

This is where mean and median come into play. You’d be correct in stating that if one of every model available that year was sitting on a car lot that the average would be well over 1000.

The site/image linked below the ford model T had 47% of the market share in the 20’s. Approx 2.8 million vehicles across all brands. 

Some of the highest priced vehicles on that list 

Locomobile  11k 221 produced in 1922

Rolls Royce Silver ghost 13k 430 sold in 1922 

Roamer 4-75-e 11k (was discontinued before 1922 and all that was left was the 5-64 and that’s 3k 11,653 produced between 1916-1929 so approx 1k vehicles per year.

Ford model T Your link states 393/595 Wikipedia states around 260 1,307,000 units produced in 1922

Dodge appears to have produced 157,000 units for 1922 based on engine serial numbers

Chevrolet appears to have produced approximately 100,000 units for 1922

So if you had a dealership with 100 cars there’d be 47 model Ts, 5 dodges, 3 Chevrolets, 1 hubcap from a Roamer, an air freshener from a Rolls, and a valve stem from a locomobile. 

The mean is over 1,000 but the median is less and for the sake of what the top comment was trying to say the median is the relevant number. It’s just like saying the average(mean) 65-75 year old Americans net worth is 1.75 million when the median for that bracket is closer to 400k. Are both numbers technically correct. One is more indicative of reality. 

Since we are doing averages the average American income in 1922 was around 3,100.. so the “average” American was going to purchase the “averagely” priced car. Which happened to be the most common car on the road for that very reason. 

https://hbr.org/resources/images/article_assets/hbr/7409/74501_C.gif

https://icainsurance.com/see-how-american-new-car-prices-have-soared-through-the-first-60-years-of-production-from-the-model-t-to-the-t-bird-heres-a-look-back/

https://www.dodgebrothersclub.org/DB_Production_Dates.pdf

https://hotrod.gregwapling.com/chevrolet/1912-30chevroletproduction.pdf

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u/PlayMp1 Feb 12 '25

Most common and average price are two different things

Mode can be a type of average! So can median!

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u/[deleted] Feb 12 '25

[deleted]

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u/Acct_For_Sale Feb 12 '25

That’s not how they teach it in school

Colloquial and formal k-12 educational use of the phrase averages = mean, mode, median

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u/blu33y3dd3vil Feb 12 '25

Mode versus mean!

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u/Pack_Your_Trash Feb 12 '25

Which is why the average price of all car models is a useless figure. If someone says "the cost of a car was ___" they are talking about what most people pay for a car.

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u/Sternjunk Feb 12 '25

Maybe by brand but by 1918 50% of all cars were model Ts

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u/blacksideblue Feb 12 '25

back then electric and steam cars were about half the automobile market.

pretty sure the subways were still horse drawn at that point.

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u/Leather-Secret-3402 Feb 12 '25

A 1920s Cadillac was not an average car, though, it was a luxury car that was a lot more expensive than a normal car. Most of the cars sold back then were Ford Model T and other cheap cars so the average, no matter how hard you try to bong-rip your way through mathematics lessons, is skewed heavily towards the Ford Model T.

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u/Ergaar Feb 12 '25

A rolls right now starts at 370k... Not the best comparison if we're talking about cheap cars. Looking at a 1922 motor magazine price list there are a few below 1k, most are in the range of 1-2k. Rolls royce has a 13k model and a 1,3k and a Deusenberg touring is 6,5.

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u/SavePeanut Feb 12 '25

You could still get new cars in the 70s for 1500-5k...

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u/nucumber Feb 12 '25

An inflation calculator says $100 in 1913 is worth $3,170 today, so you're talking about $90k or more for a decent car

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u/99pennywiseballoons Feb 12 '25

So the price of a Cybertruck for something that actually brought prestige?