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