Price Revolutions and the Rhythm of History

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* Book: The Great Wave: Price Revolutions and the Rhythm of History. David Hackett Fischer. Oxford University Press, 1996.


Recommended summary and presentation at [1]

Contextual Quote

"Finally, the great wave crested and broke with shattering force, in a cultural crisis that included demographic contraction, economic collapse, political revolution, international war and social violence. These events relieved the pressures that had set the price-revolution in motion. The first result was a rapid fall of prices, rents and interest.

This short but very sharp deflation was followed by an era of equilibrium that persisted for seventy or eighty years. Long-term inflation ceased. Prices stabilized, then declined further, and stabilized once more. Real wages began to rise, but returns to capital and land fell.

These material events had cultural consequences.

In literature and the arts, the penultimate stage of every price-revolution was an era of dark visions and restless dreams. This was a time of lost faith in institutions. It was also a period of desperate search for spiritual values. Sects and cults, often very angry and irrational, multiplied rapidly.

Intellectuals turned furiously against their environing societies. Young people, uncertain of both the future and the past, gave way to alienation and cultural anomie."

- [2]


From the Wikipedia:

"Hackett Fischer identified three complete monetary waves in European history, each consisting of a price revolution, featuring high inflation, followed by a war crisis, followed by a new equilibrium.[1]p4 A fourth wave began, says Fischer, with the persistent monetary inflation of the 20th century.

Fischer observed that these movements were not cycles but waves, with no fixed periodicity. Each wave had six common features. Chronologically, these were;

1), prolonged prosperity,

2) political disorder,

3) inflation spiral,

4) spiritual crisis,

5) revolution, deflation,

6) long era of equilibrium."


The Cycle's Timeline

From the Wikipedia:

First wave

"Fischer says this began with the medieval price revolution, 1180-1350. There followed crisis in the 14th and 15th centuries, featuring the Black Death and Hundred years war. Then equilibrium during the early Renaissance, 1400-1470.

Second wave

This began with the “price revolution of the 16th century”, in fact lasting from about 1470-1590.p91 Crisis followed; depression, famine, the Thirty Years' War (1618–1648), English Civil War, Dutch Revolt and other conflicts.

According to Fischer the Enlightenment equilibrium which followed lasted from 1660-1730.

Third wave

The price revolution of the 18th century began about 1729.p117 Commodity prices rose in England (sic), France and the United States (sic!).p120 large population increases occurred in most of Europe.p124 Wage rates failed to keep pace with grain price rises, and wealth inequality increased.p138 A rising spirit of rebellion led to a “revolutionary crisis”, 1789-1820.p141 The French revolution was followed by the Napoleonic wars and Latin American wars of independence. Stability was regained in the “Victorian equilibrium”, 1820-96. Consumer prices fell in England (sic).p158 There were revolutions in transportation, agriculture, industry and commerce.p168 But by the end of this era, young Englishmen were “bankrupt, bored and bloody-minded… the dark clouds began to gather.”

Fourth wave

Fischer identifies a further “price revolution” in the 20th century, by which time there were no new lands left to explore or colonise. The German hyperinflation of 1923 and the Great depression of 1929 were followed by accelerating worldwide inflation after 1962. Though inflation had ended by 1996, Fischer speculated (1996) that “the great wave of the 20th century (approaches) its climax” and that “A major war in the Middle East or eastern Europe or elsewhere could reignite inflation.”


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