How big is a billion?

Article Category: Finance  |   

There’s a phrase about government spending that’s become a classic.

"A billion here, a billion there, and pretty soon you’re talking real money…"

A billion in used dollars - photo

This witticism is often (probably wrongly) attributed to long serving US Republican Senator Everett Dirksen (1896-1969). What’s more certain is that it was first uttered in the early 1930s to convey an incontrovertible truth – that the billion had even then become a basic chip on the table of government and corporate spending.

The point was nicely emphasised in Mike Myers’ 1960s-style spy spoof, Austin Powers: International Man of Mystery, when Dr. Evil, returning to his former arch-villain chair after a 30 year cryogenic hiatus is baffled when his demands for “ONE MILLION DOLLARS”, which had seemed so impressive in the miniskirt era, reduces 1990s nuclear blackmail targets to helpless mirth. You can relive the amusing moment in the YouTube video below, should you so wish.

Measuring a million

It’s easy to become blasé about sums of a million pounds or dollars when even so-called ‘family homes’ increasingly cost that much, but 1,000,000 is still a serious sum.

A thousand thousands, or ten to the power of six (106) as mathematicians would term it, is not a sum any of us can easily measure. Counting at one number per second, it would take at least eleven days to reach a million, assuming you could stay awake that long. Saving £25,000 per year, something most people can only dream about, it would take 40 years to amass a million, while stacking a million penny coins would create a tower at least a mile high.

This, then, is the paltry million.

What is a billion?

The first difficulty in quantifying a billion is in the basic definition: what is a billion anyway? There was a time when the answer would depend on which side of the Atlantic one was standing. This was because of differences in adopting the short scale and long scale: the two different large-number naming systems used for integer powers of ten.

In the short scale, every new term greater than one million is one thousand times larger than the previous one, So a billion was understood as a thousand millions (1,000,000,000), a trillion as a thousand billions (1,000,000,000,000), etc.

Under the long scale, each new term is one million times larger than the previous, with a billon understood as a million millions (1,000,000,000,000). So what would be a billion in long scale would be a trillion in short scale.

A billion:

Most countries in Europe and Latin America used long scale whereas most English and Arabic-speaking nations use the short scale. But even the English language nations were divided up till the 1970s, with the UK retaining long scale, while the USA used short scale, so that we had the ‘British billion’ and the smaller ‘American billion’.

However, after decades of ever increasing popular and financial use of short scale, Whitehall finally surrendered in 1974 and the UK also adopted the short billion - 1,000,000,000.

France has shifted between definitions but finally confirmed the long scale "French billion" (1012) in 1961, with 109 being described as a 'milliard'. 1000 billion (1015) then became a 'billiard' and so on. The same system is used in Germany, Sweden, along with most other non-English speaking nations in Continental Europe and Latin America, with the notable exceptions of Russia and Brazil. It's also worth noting that the Chinese understand 'billion' to mean just 100 millions.

On the next page we look at counting a billion, how to spend a billion and we feature a video discussing millions, billions, trillions and centillions.

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Last update: 27 January 2016

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