Examining the economic/social structure and national differences in the setting of "The Million Pound Bank Note"

This is a bank note similar or identical to the one used in the story. The Bank of England does indeed print Million Pound bank notes called "Giants" and even 100 Million Pound notes called "Titans", but these are used strictly for banking and accounting purposes. This actually makes quite of bit of sense in the story, as it is difficult to cash them, and the brothers did get it from a bank. The purpose of these notes is to account for money, not to make transactions, hence our fellow's problem. (Source) (Secondary Source)

The Bank of England has issued these notes on different occasions.
(Please Note: This bill is NOT the bill mentioned in the story, it was printed after World War II as part of The Marshall Plan, nine were made.) Source: Million Pound Bank Note

These bank notes, while somewhat of a curiosity, do indeed serve a useful purpose. The existence of such notes adds a sense of realism to Twain's story, and places his fictional account in the real, plausible world, as seems to be his usual style. 

As we discussed in class, the £1,000,000 note represents wealth in a strange way, something that is both tangible, because there is a physical note, an intangible, because it is actually quite useless to the narrator and is only truly paper with an imagined value. But what kind of wealth are we talking about? While today one million Pounds, about ~1.65 million Dollars would buy a very nice house, it would by no means make someone incredibly rich for life. Over a hundred years ago, a million Pounds was an immense sum.

Figuring value while taking inflation into account is difficult, inflation is not overly difficult to calculate, but many other variables change. The number of people, the relative price of goods, and the average income all change the purchasing power of money. On top of that, the value of the Pound when compared to the Dollar has fluctuated. Today it's worth around 160-170% of a Dollar, but in 1900, a Pound was worth almost FIVE times as much as a dollar. To try to get a rough idea of just how much wealth the bank note signified in 1893 (the year the story was published) we can use an in-depth online calculator. It comes out to about $175,000,000 USD. A truly enormous sum, can you imagine carrying one and three-fourth HUNDRED MILLION dollars in your pocket? (Calculations Source) (This is NOT an exact number, various things change value as mentioned before, like living standards and cost of production, the relative value ranges anywhere from £96,770,000 to £1,127,000,000 in present day UK Pounds. Source)

This was the case (relatively, considering the value of currency) in the story. I think this puts it into clearer context, this was not just a lot of money, it was a massive fortune. A massive fortune that cannot be spent. 

Economic/Class differences in England and The United States today and in Twain's time. 

As discussed in class, placing the story in England may or may have not have been a comment about the English class system. He was able to use the prestige and assumptions brought by the note to make his own money, it what may be an allegory to the idea that it takes money to make money. In order to examine what that might mean, some context is needed.

Starting with the present day, The United States is seen as the land of opportunity (as it has been seen for some time now) but many of our economic concerns deal with wealth inequality and the seemingly unfair structure of business. In the United States, social and/or economic class is not a popular topic of light conversation. Part of the idea of the American Dream is that anyone can get rich. 

Despite modern cynicism about the American Dream, the numbers are in the United States' favor. The United Kingdom, although a country of great wealth, also continues to suffer from a pronounced class system. Over all, the average UK citizen makes (In USD) $40,879 each year, and when we take into account Purchasing Power (PPP, how much your money buys for you in your country, depending on the price of things) it drops down to $38,309. In the United States, the average citizen makes $52,852, and because PPP is based off the price of things in the United States, it is the same. (GDP Numbers Source)

All of this by itself doesn't mean much, only that the UK is on average slightly poorer. The UK is still a wealthy country when compared with most of the world, and is not by any means impoverished. However, what is more important is the wealth inequality of the two countries. GINI is an equation used to measure wealth inequality, the United States has a higher (less equal) GINI than England (36.9 vs. 32.8, both in the 30's on a list of countries by GINI) but this is an AFTER TAX GINI. Tax could theoretically be used in such a manor to completely eliminate GINI inequality by taxing wealthier people more and poor people less, or not at all. I am not advocating this, but simply pointing out that After Tax GINI is an arbitrary number, and does not show inequality as it truly exists. Before Tax GINI, the money people make before the government redistributes it, is a much better indicator of inequality. Because tax laws in England are higher for wealthy people, they have an advantage over the United States in determining inequality, in reality, England has a higher GINI than the United States. (Source)

Here are charts for before tax GINI (Source)

What is most important to this story however, is Upwards Mobility, that is, the ability to change social classes and become wealthy. This is more difficult in the UK than the US. (Source)

These are all modern numbers, the United Kingdom has undergone massive changes in the last century. The devaluation of their currency (much more severe than in the United States,) high inheritance taxes (sometimes to the point that people cannot afford to inherit Source - Source 2), and other factors and laws have greatly reduced the power of the upper class in England. The US, on the other hand, is seeing levels of inequality today that are not historically the norm (although this has much less to do with the poor getting poorer -they haven't (Source)- and much more to do with the rich getting richer - History of top income share). Yet, even today, in a progressive and supposedly egalitarian-minded society such as the UK, the marks of class structure remain, and stand out. Today the richest 1% of the UK control MORE money percentage-wise in the UK than the richest 1% do in the US. Source 1 Source 2

 In Twain's time, the UK was as much a feudal society at it was a capitalist one. Class could be distinguished by one's accent, family name, and other factors. Lords and Ladies still held power and family name and net worth was everything. Had this story been placed in the United States, I think it would have made less sense. England, especially London, presented the perfect setting for the story to unfold, and I do believe Twain made this choice on purpose.

Relevant: 
- http://www.ifs.org.uk/comms/comm124.pdf
- Class System of the UK
- Income in the UK
- http://www.dailymail.co.uk/news/article-2303333/Great-British-Class-Survey-reveals-UK-7-social-classes-Are-precariat-new-affluent-worker-elite.html