Fischer, David Hackett. The Great Wave: Price Revolutions and the Rhythms of History. Oxford, England: Oxford UP, 1996.
In The Great Wave Fischer takes on the question of deep social change: the reasons for change, the nature
of change and the rate of change. He contends that history may be organized, and to some extent understood, through the lens of price revolutions and price equilibriums. Fischer documents four major world price revolutions in the thirteenth century, the sixteenth century, the eighteenth century and the 20th century. For each of the four price revolutions, he considers four areas: first, he examines the timing, magnitude, rhythm, volatility and sequence of secular price increases. Second he demonstrates a pattern of price relatives for commodities across the four revolutions; third he documents the movements of real wages, and finally he presents the pattern of change in rent and interest across the four revolutions. Before he turns to the details of revolution, Fischer lists seven theories that he will support and refute as needed in the service of his thesis: monetarist, Malthusian, Marxist, neoclassical, agrarian, environmental, and historicist.
Fischer argues that price waves occur because of a set of predictable contiguities, decisions made at the individual, peer group and state level. The sequence of the wave is as follows: first, relative prosperity which leads to optimism, and relaxed family planning. Families grow larger because young people choose to marry earlier and have more children. Prices begin to drift upwards as optimism and prosperity obtains. An increase in population leads to a rise in the price of necessities, particularly food and fuel. Wealthy individuals, who have the means to protect themselves financially, tend to buy more food and fuel, thus driving prices higher. They also pressure the state for tax breaks or other financial subsidies, and the gap between rich and poor begins to grow at an alarming rate. Markets become unstable due to speculation and the economic future of the young seems uncertain but most probably bad, and homicide and robbery rates rise along with prices. A triggering event -- a change in climate, a run of bad harvests, a war or plague -- which could be withstood in better times, but not in a time of multiple stresses and pressures, causes a social crisis and collapse. A sharp drop in population and prices levels off into an equilibrium; prices of food, fuel, and rent return to levels that a large part of the middle class can afford. A mood of social optimism grows, prices and populations begin to rise, and a new wave gathers force.
Fischer would argue that price revolutions rise and fall in waves, not cycles, because prices do not return to their original levels, and because the elements that trigger specific waves are different. The medieval price revolution was the least noticeable of the four that Fischer documents, but it had the most dramatic effects. For a population living just above the subsistence level, the population pressures and state wars, compounded with bad harvests and the plague, created high death rates and massive social disruption. The 16th century price wave was shorter and sharper; the 18th century more so; and the 20th century the shortest and sharpest. The wave of the 16th century, like the 13th century, generated falling population rates, but the 18th and 20th century waves were dampened by more effective social relief, better control of agriculture and currency, and less disruptive environmental changes.
Fischer takes particular issue with the theories that do not adequately explain the cause of price revolutions, among these the monetarist, Marxist, historicist, agricultural, and neoclassical. He does suggest that deep changes are caused by ecological or population pressure on access to basic necessities. He would argue that money shortages reinforce inflation and are frequently mis-managed by governments trying to keep prices down (he favors price control). He would also suggest that the wealthy, as a group, pressure the state (in whatever form) to protect their interests, and also try to hoard necessities, creating volatility and instability in markets (referencing here neoclassical and Marxist models). His appendices further his arguments on particular economic issues.
Fischer is useful because he poses an important question. What is the root cause of deep social change? He is a materialist in that he links these changes to pressures on material necessities. Although he does not present the argument in precisely this way, Fischer is sensitive to changes in three areas: new methods to supply traditional necessities; barriers to the traditional ways to supply necessities; and newly devised necessities. Fischer is a non-materialist (?) in that he points to simple optimism or pessimism as playing a powerful role in social change. Fischer describes vivid moments in economic history vividly, highlighting social contrasts, and focusing on moments that serve as cultural peaks or ominous precursors to change; he doesn't explore the reasons for why an traditional method of satisfying spiritual needs might become empty, and might require cultural change.