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David Hackett Fischer


Subtitle: Price Revolutions and the Rhythm of History - Oxford Univ. Press, 1996, 536 pgs, extensive notes, huge bibliography, appendices, index, maps, charts,


Reviewer Comment -
Dr. Fischer was more interested in study of the forces that created the 'great waves' of price increase (inflation) since the 1200's and their results than in the detailed study of their subsequent deflations and equilibrium periods. He provides the details of economic changes that accompanied the subjects in the Bobbitt and Kennedy books. The author in late 1990's predicted the epochal change in the world from inflation to deflation. This is the best analysis of the causes of inflationary waves based on history. Dr. Fischer summarizes his concern about present and future conditions in the preface to the 3rd Edition, which I quote extensively because it is so important. The remainder of the book provides the historical evidence. This is a large book full of fact and analysis supported by very many graphs and tables.

The problem with 'prices' and especially graphs showing increasing prices for some commodity, is that all prices are relative. We measure the price of one item against another. In most graphs and in the common thought they depict is that they measure the price, for instance of grain, versus ounces of silver over time spans of a century. But the quantities and prices of silver itself was changing. This is still true today when we think of the price of an asset in terms of money rather than the price of money in terms of an asset.

But I can only make a very limited summary of important points. Dr. Fischer discusses the several 'schools' of thought that each claim a different 'cause' for inflation. But he does not follow through or rather the proponents of these concepts do not. In general they claim if (their selected) something is 'increasing' it can generate inflation. Presumably then, if it is not increasing there would not be inflation, but if it is 'decreasing' their might be 'deflation.' And the appendices are extremely valuable as they include not only direct supporting material but also the author's comments on the state of historical research and writing in academe today.

He includes extensive bibliographically notes to a wide range of references. I include here only a few links to titles of historical studies that include some discussion of political, economic, and social trends during the periods involved. I hope that this brief summary will generate interest for readers to study the book itself. Each time I re-read it I think of more meanings it uncovers.


Preface -
The author describes the wealth of information that has been collected by historians on prices over the centuries. The primary sources are scattered and incomplete, but have been sufficiently organized to show trends over lengthy time periods. He believes that information on prices is one of the best uses of 'quantitative methods' in historical research. The most complete series are for prices in Western Europe since the 12th century. He notes that there are many ways to use the data and interpret it.
One, the series provide a 'running record' of the cost of commodities.
A second, is as evidence of the changing value of money. (Much more on this further on).
A third, is that prices inform us about 'systems of production and structures of exchange".
A fourth, is an abstraction - 'prices become a source for the study of broad historical movements'.
A fifth, is also an abstraction - prices are "clues to the nature of change itself."
The world is always changing. But we can study the nature of "change in the structure of change." In other words the acceleration or deceleration of the rate of change.
In this preface to the 3rd edition Dr. Fischer writes the key thought.

"The period from 1996 to 1999 is deeply interesting to an historian of prices. The long inflation of the twentieth century has given way to a new disinflationary trend, and in some sectors to actual deflation. We have been living through an era of 'deep change' when one 'Change Regime' yields to another. To understand these new economic movements, one must look beyond the boundaries of economics itself. The world-disinflation of the 1990's was driven mainly by demographic events, most of all by sustained deceleration in rates of population growth".
"The economic consequences of decelerating population growth are slowing demand and downward pressure on prices throughout the world, which lead in turn to severe financial crisis in economies that were organized in expectations of very rapid growth."

(He is actually thinking mostly of the 'developed world' here - Europe, Japan and the United States). He does not mention of course the subsequent demographic event, the massive entry into the world economy of extremely low wage workers in Asia, which also had a deflationary effect.)
He continues, "In other ways the new era of the late 1990's is entirely without precedent. A novel tendency in a period of disinflation is a very powerful inflation of asset values, and especially in the price of common stocks on many exchanges. Here again the cause is to be found outside the conventional frame of economic analysis, in social and cultural tendencies that have caused investment in certain classes of assets to increase more rapidly than the supply of assets themselves. We might have a major problem here, in what an historian would call a shearing effect created by countervailing price moments.."
"Another problem operates on an entirely different level. In periods of deep change, understanding lags behind the movement of events. The world changes faster than our thoughts about it."

There is more to his comment and concern. Remember the book was written prior to the so-called 'dotcom' collapse and the events from 2000 to 2015.


Introduction: Great Waves in World History -
Dr. Fischer begins with this observation. "The history of prices is a history of change." He notes that data reveal that the price trend in southern England over 700 years has been an average increase of 1% a year. He shows that price inflation has been a problem but not constant in its "rhythm, rate, or timing." There have been periods of significant inflation and also of equilibrium or deflation. Most of the price inflation took place in four great 'waves'.
The first one was from the late 12th century to early 14th century.
The second began in the 15th century and ended in mid-17th century.
The third began around 1730 and ended with the defeat of Napoleon - around 1815.
The fourth began in 1896 and was ending around the time Fischer was writing this book.

In between these periods prices first fell and then fluctuated around a level plane that was higher than the pre-inflation level. He provides a graph that shows all this with prices converted to a base at 1451-75. Fischer calls the first level era the 'equilibrium of the 12th century," which was the high point of medieval civilization. The second was the 'equilibrium of the Renaissance' (1400 - 1480). The third was the 'equilibrium of the Enlightenment (1660 - 1730)'. The fourth was 'the Victorian equilibrium'.

Fischer remarks that all this is well understood by European economic historians but mostly ignored or disbelieved by Americans. He has much to say on this topic, including.

"The collective amnesia (of Americans) is partly the consequence of an attitude widely shared among decision-makers in America, that history is more or less irrelevant to the urgent problems before them".
He remarks acidly as an exception to this that one American economist, Lester Thurow, advised his colleagues that to understand current inflation they should study 'history' of 'long ago' that is way back to 1965. Fischer hopes to stimulate interest. He also wants to 'explore' causes. For this, he notes that European historians have posited seven causes - "monetarist, Malthusian, Marxist, neoclassical, agrarian, environmental, and historicist models."

He describes these here and then compares them in an appendix to the evidence provided in these chapters. He remarks that they differ in large part due to their beginning "assumptions about what prices are, and what the world is made of." Fischer takes as his third mission to consider the "consequences of the movements that prices represent". This is why he focuses so much on the 'inflationary' periods, because they have seen the worst consequences, which he describes in detail. He pays not so much attention to the relatively benign deflationary periods. He is at great pains to insist that price 'waves' are not cycles. He explains the differences.
One more quotable remark,
"One must learn to look the evidence in the face, without fixed ideological, theoretical or epistemological preconceptions. We are sometimes told that this is impossible. So it is -- for some people."
And, "Today we are living in the late stages of the price revolution of the twentieth century." - written in 1999.


The First Wave: The Medieval Price Revolution, 1180 - 1350 -
Dr. Fischer begins with a description of the rich 12th century.
It was "an epoch of high importance in political history. It was an era of great kings." Great universities were founded, much literature was produced. It was "an age of European expansion". The population was increasing and moving outward as well. "It was the period when medieval civilization reached its highest level of cultural achievement." " All these movements rose from an expanding demographic base." "The growth of population and the increase of wealth were roughly in equilibrium during the twelfth century. Prices remained comparatively stable throughout the period."
But increasing market exchange with limited supply of specie resulted in a shortage of currency which was supplemented by use of alternate things like jewelry, furs, books and other liquid items of high value. There was resort to melting down gold and silver objects.
"This money (he means currency) famine was only a hint of economic trouble in a period of high prosperity throughout Europe."
"A symptom of trouble, and also in part its cause, was a movement that might be called the medieval price revolution.. This was a long wave of rising prices that began late in the twelfth century, and continued to the middle of the fourteenth century."
Fischer writes that the change began in England around 1180. It began slowly, not more than .5% a year between 1245 and 1345. (This rate of increase he cites as creating a disaster, yet today economists claim to want a 2% per year inflation.)

His graphs show increasing magnitude and amplitude in yearly prices of wheat. These graphs place time on the x axis and grams of silver on the y axis with equal distance in the interval between two weights of silver. The variable plotted on the graph then is the price of wheat in terms of silver. The assumption in such a graph is that the value of silver does not change either with the quantity of silver or over time. But if a quantity of wheat were shown on the y axis, then the graph would show a decline over time for the value of silver. And this is the fundamental problem in the way prices are depicted (and thought of) as a measure of value. The standard of value is itself changing.

The Medieval Price Revolution Begins, circa 1180 - 1230

Fischer continues by asking why did medieval prices go up. He replies that some give the cause in an expansion of the money supply, and others in the growth of population. But he has just noted that their was a shortage of 'money' (at least of coin). But population was indeed rapidly increasing. There was a 'baby boom' that "changed the age-structure of the population". He notes that prices for different goods rose at different rates, with energy and food rising the fastest. Fischer also describes the period as one of expanding commerce and growing numbers of trade fairs and general economic activity.

"This population-driven inflation was reinforced by material pressures of many other kinds". "The growth of commerce and industry had major consequences for monetary systems. Expanding markets increased the velocity of money in circulation".

(I doubt this whole theory of velocity - If population increases and business increases on a daily basis were resulting in more simultaneous exchanges then more money - that is coins - are needed to transact business, the exchanges of coins needed don't increase in velocity but in volume. And if there is insufficient added volume than the price of the transaction increases.)

The Cultural Responses to the Medieval Price Revolution

Fischer then turns to the 'cultural responses' to the price revolution. And the very first 'response' he describes is the increasing coinage of silver plus the reminting of coins with decreased weight of silver. Now is this a cause or a result?

"This discovery (that prices were rising) set in motion a series of cultural responses that caused prices to rise higher. One of the most important of these inflationary responses was an expansion of the money supply".

Dr. Fischer describes the quantity of silver and gold existing in Europe before and during this period. It had been very small prior to 1200, but expanded greatly despite the huge losses during the crusades. Old and new silver mines were opened. More mints coined more. "Mints throughout Europe coined money on demand". Merchants appeared with silver and had it minted. (Note to Dr. Wray, minting coins was not a prerogative of kings.)

"This added a monetary inflation to a demand inflation, and caused prices to keep on rising, once the increase had begun."
I don't believe this. He provides no data related to imagined 'velocity'. How could it be measured? Rather, the quantity of money expanded due to increasing use of credit and of alternates to coinage as well as massive expansion of the amount of coinage in circulation. (For instance, talley sticks as a substitute.)

He notes the new mintage of gold coin in Italy. Here he notes the increase in new credit instruments. Fischer gives data on the increase in silver in circulation.
Peter Spufford in his monumental Power and Profit The Merchant in Medieval Europe cites significantly larger quantities for silver coin in England than does Fischer. At any rate we can agree that there was a large increase in the quantity of the money supply simultaneously with the increase in prices. But not of this imaginary 'velocity' that he repeatedly cites. But is this due to a decrease in the value of silver relative to goods and sliver? Please read also Edward Cheyney - The Dawn of a New Era 1250 -1453

The Third Stage: Growing Instability

Fischer also discusses the impact of the price revolution on land prices, wages, rents and interest rates.
He continues into the 13th century - the 'Third Stage' of the revolution. "In the late thirteenth century, the medieval price-revolution entered another stage, marked by growing instability. Prices rose and fell in wild swings of increasing amplitude. Inequality increased at a rapid rate."

The Crisis of the Fourteenth Century

He turns to discussion of increasing bad weather. Then came the plague. He presents a very dismal situation.
"In the period from 1314 to 1348, the great wave crested and broke in a shattering catastrophe. As it did so, the people of Europe suffered through the darkest moment in their history: a terrible time of starvation and pestilence, insurrection and war, persecution and political chaos. This was more than merely the collapse of medieval economy. It was the death of medieval civilization". He describes the following 50 years of multiple disasters in every aspect of society. Please read William Rosen - The Third Horseman: Climate Change and The Great Famine of the 14th Century.


The Equilibrium of the Renaissance, 1400 - 1470 -
Dr. Fischer begins this section with the concluding phases of decline during the continuing crisis of the 14th century. "One consequence was a continuing decline in population". It kept on falling after the plague till at least 1400.
"At the same time that Europe's population continued to fall and social unrest continued, an economic problem developed. Money began to disappear. Europe's stock of silver and gold contracted sharply during the late fourteenth century". "After 1390, a sever monetary famine developed... In "Florence the minting of silver coins ceased entirely from 1392 - to 1402". "The money famine was part of an deep economic depression that continued to the end of the fourteenth century". "The decline of population and scarcity of money had a powerful effect on European prices". "Houses and estates fell empty: rents and land values declined roughly in proportion to the loss of population. Grain prices also came down, but the growing scarcity of labor caused wages to rise". "Real wages measured in terms of purchasing power increased in even greater proportion".
The lesson is that the decline in the quantity of money was reflected in the quantity of exchanges and the reduction in prices.

Dr. Fischer devotes only a few pages to a summary account of the economic- social revival.
"At the dawn of the fifteenth century, economic conditions began at last to stabilize in Europe. Prices ceased falling and began to fluctuate in a more regular way. A long period of comparative equilibrium followed in the fifteenth century".
But general historians have well described the era as the famous Renaissance. One account is Myron Gilmore - The World of Humanism 1453 - 1517.


The Second Wave: The Price Revolution of the Sixteenth Century -
Dr. Fischer begins his narration of this era with detailed description of society in Florence in the 1490's. The graphs of rising commodity prices begin in 1521 and continue to 1660. But in the text he notes that this wave began around 1470 and was the longest sustained rising wave in European history. He considers this another period of disaster, yet the annual inflation rate was only 1%. Again compare that with our vaunted economist experts today who advocate 2% annual inflation.

The Price Revolution Begins, circa 1470-80

He asks: "What set this change -regime in motion? There are many answers in the literature: monetarist, Malthusian, Marxist, and more." He opts more for demography in a new increase in population that increased demand for resources. Among specific data he cites the population of England - 2 million in 1430 and the same in 1470 but then great increase - 2.8 million by 1541 - and over 4 million by 1600. He believes the cause of population increase was the very growing prosperity of the previous equilibrium era in which living standards increase caused a favorable attitude and growing expectations.. But, he notes: "The effect of population growth was to undercut the cultural expectations that set it in motion". However, "Long before population outstripped the means of its subsistence, in a Malthusian manner, complex imbalances of other kinds began to develop." First agricultural prices began to rise, then energy (wood) prices. Prices of manufactured goods rose much later and at a lower rate since their supply could be increased more easily to meet increasing demand.

The Second State: Discovery and Cultural Response

"In the early and middle years of the sixteenth century, the price-revolution entered another phase. It did so when the long inflation broke through the boundaries of the old price system that had prevailed in the mid-fifteenth century".

Once again, he notes the connection between when the population senses the price increase is unusual and when they again start active responses.
"When the price revolution became visible, people sought explanations. Many looked for someone to blame". People blamed "covetous and insatiable persons". In England "Parliament prohibited export of food and wood". "Their responses to inflation caused more inflation".
Social Imbalances

"In the later stages of the price-revolution Money-wages lagged behind the rising cost of living, and real wages fell sharply. By 1570 real wages were less than half of what they had been before the price-revolution began". "Returns to landowners also increased during the price-revolution".

Fischer does not mention it, but this was because landowners had during the previous period, when they needed cash for trade, converted their medieval serf laborers from payments in kind and actual labor to cash. The demands for increasing cash wages by workers during the previous period now came back on them as well.

Fischer continues, "The growing gap between returns to labor and rewards to capital was one of the most important social consequences of inflation in the sixteenth century".

Monetary Imbalances

"Another imbalance developed in the monetary system. Once again, as in the medieval price revolution, individuals and institutions responded to inflation by taking actions which expanded the supply of money". One estimate although it is questioned - "the supply of silver increased from approximately 10,000 tons in 1550 to more than 23,000 tons by 1600, and above 34,000 tons by 1660".
"The largest part of this increase was American silver and gold, which flowed abundantly into Europe after 1500".

But the price increase had begun before the great increase in silver. He notes, "Further, major fluctuations in the flow of treasure from America did not correlate with variations in price-movements, in time or space".

Dr. Fischer also describes chemical tests that reveal the origin of specific silver. which show that silver from America did not increase greatly in quantity of coins until the later part of the price revolution. He concludes, "In short, the price revolution came first; American treasure followed later' But, "The gold and silver of America did not set the price-revolution in motion, but powerfully reinforced its momentum".
He elaborates on the facts to draw conclusions. "Monetary theory explains why an increase in the supply of money drives up prices. It cannot explain why the money supply increases in the first place, except by introducing the monetarist's favorite diabolus ex machina in the form of corrupt and incompetent politicians who are believed to be too stupid or weak to understand the monetarist's favorite remedies". He proposes a better reason, namely that once prices do begin a secular rise, Then people rush to find ways to increase the money supply. He discusses, also, the various explanations proposed by contemporaries, such as, increasing quantity of silver, increasing population, and combinations.

Fiscal Imbalances

"The response of governments to rising prices created a third sort of imbalance, fiscal in nature". "large deficits were growing in the public accounts of European states." "As the price-revolution continued, the revenues of European states fell far behind expenditures. In desperation, governments borrowed heavily."

From Imbalances to Instability

"In the late sixteenth century, dangerous instabilities began to develop in European society". Grain prices rose and fell rapidly and in greater magnitude. "Monetary factors became yet another source of instability. European states and sovereigns tinkered endlessly with their coinage during the sixteenth century, sometimes inflating the value of their coins, sometimes deflating them again". Overall, "High prices forced governments to debase their currency, debasement in turn drove prices higher".

The crisis of the Seventeenth Century

"During the decade of the 1590's, the price revolution entered a new stage - a prolonged and very painful period that historians call the 'general crisis of the seventeenth century'. "This was the darkest era in European history after the catastrophe of the fourteenth century". "The first signs were similar to those of the medieval crisis". "Real wages and industrial prices were depressed, while the cost of food and fuel climbed higher". "This was more than merely a short sharp spell of bad weather. It was a shift in the climate - one of several sharp downturns in the early modern era that have been called collectively the 'little ice age'. Another result was a decline in the size of the population. And there was a major economic collapse between 1610 and 1622. The amount of warfare increased such that 1610 was the only year without it. "Needy governments resorted to all the usual forms of fiscal folly. Some tried deficit financing on a large scale. others systematically debased their coinage. Many tried to wring more taxes from sullen and resentful populations".

Dr. Fischer describes the impact on art and literature. "The philosophy of the period was similar in tone. The leading example was the work of Thomas Hobbes with its organizing assumption that the natural condition of man was 'poor and solitary, nasty, brutish and short'".

Carl Friedrich's - The Age of the Baroque 1610 - 1660 overlaps this period. And Sir George Clark describes it in "The Seventeenth Century.

The Equilibrium of the Enlightenment, 1660 - 1730

For more of the history read Frederic Nussbaum - The Triumph of Science and Reason 1660 - 1685

"in the middle decades of the seventeenth century, the great crisis came to an end. After a period of transition, a new equilibrium appeared throughout Europe". "The new change-regime might be called the equilibrium of the Enlightenment. Its historical dynamics were similar in many ways to the equilibrium of the Renaissance". "The material components of this equilibrium may be summarized in a few sentences. The price of grain ceased rising, fell sharply, and then began to find a level. Food and energy came down, manufactures went up. and the general price level began to fluctuate on a fixed and level plane. Wages rose, Rents and interest fell. The distribution of wealth and income became a little more equal". "throughout the period from 1650 to 1730, returns to labor slowly increased". "At the same time that wages rose rents came down". "Interest rates also declined in this period". "In England by the year 1735, the yield on long annuities sank as low as 3 percent".

But there also were briefer crisis years. "The worst crisis occurred in the years from 1694 to 1700". Climate again was exceptionally cold with 'stresses were much the same as in the crisis of the 1590's but this time the cultural and economic consequences were very different". "After 1700 scarcities came less often and were less severe".

Again, Dr. Fischer believes the simple monetarist explanation is inadequate. "A better explanation for the price equilibrium of this period may be found in the pattern of population growth, which was modest in the period 1650 - 1730".

"In economic terms, that equilibrium should be understood as a period not of stasis but of stable growth. Production and productivity increased. Commerce flourished throughout Europe. Labor markets, capital markets, land markets, commodity markets all were made to work more efficiently". "Banks multiplied rapidly: the Bank of England (1694), the Royal Bank of Scotland (1727), and many others" "The great cities, as always the barometers of civilization's health, prospered throughout Europe in this period". "Social life became more orderly in this period".


The Third Wave: The Price Revolution of the Eighteenth Century -
Dr. Fischer dates this era approximately 1720 - 1820. It is covered by many history books, such as: Penfield Roberts - The Quest for Security 1715 - 1740; - Walter Dorn - Competition for Empire 1740 - 1763; Leo Gershoy - From Despotism to Revolution 1763 - 1789; Crane Brinton - A Decade of Revolution 1789 - 1799; Geoffrey Bruun - Europe and the French Imperium 1799 - 1814; Frederick Artz - Reaction and Revolution 1814 - 1832; Paul Mantoux - The Industrial Revolution in the Eighteenth Centuryy; and Charles Breunig - The Age of Revolution and Reaction, 1789 - 1850.

Dr. Fischer first sets the new scene by describing Europe and Paris in the first decades of the 18th century.

The Price Revolution Begins

"The new trend started slowly and silently, in much the same manner as the great waves that had preceded it. Its epicenter was Paris. In the grain markets of the French capital, the price of wheat began to rise about the year 1729".

Soon the price increases were felt in all the major cities from Philadelphia and rural Massachusetts to Cologne and beyond. "Once begun, the new trend spread swiftly from Europe to the New World". But in Latin America price changes were complex, increased in some countries and reduced in others at first and only eventually increased in all. Prices also rose in diverse places like China and the Ottoman Empire.

"Once again, the most rapid movements occurred in the price of energy and food". "The prime mover of this price-revolution was the increasing pressure of aggregate demand, caused by an acceleration in the growth of population". "The primary cause of population growth in this period was a rise in fertility, not a fall in mortality".

People were marrying earlier and having more children because the world conditions appeared better to them as a result of the improved social - economic conditions that developed during the previous generation.

My thought - when things are getting better, they better keep getting better, else the people's response may bring about its own collapse.
Discovery and Cultural Response

"The rise of prices was felt keenly throughout Europe, but it was not perceived as a new secular tendency for many years". "It was invisible to contemporaries". "The second stage began during the middle years of the eighteenth century when prices rose above the range of fluctuations in the equilibrium of 1650 - 1720. As they did so, contemporary observers could at last recognize the great wave for what it was: a sustained and powerful long-term tendency that profoundly changed the conditions of ordinary life". "Governments and individuals responded to this discovery much as they had done in earlier waves. As prices rose, pressures mounted for monetary expansion. In this relationship, the quantity of money (and the velocity of circulation) (sic) was not an independent variable. In the face of rising prices deliberate efforts were made to expand money in circulation. The supply of gold and silver in the Western world may have doubled or trebled during this period".
"A large expansion also occurred in commercial paper, which served increasingly as a circulating medium in the eighteenth century. Private notes and bills became widely used as money". "At the same time, paper currency began to appear in Scandinavia and North America, where shortages of specie were severe". "These tendencies increased the quantity of money in circulation and added to inflationary pressures, especially in the second stage of the price-revolution"
"Once again, monetary factors reinforced the momentum of the great wave but did not set it in motion". "One important factor, beloved by classical economists, was the expansion and integration of world markets. Another was the improvement of income per capita, which meant that fewer people were living near the edge. A third was the growth of welfare which, however limited, helped to prevent starvation".
"The price of all these improvements was acceleration in rates of inflation, and diminution of its cruelest consequences". Interestingly, at this point Fisher mentions Karl Polanyi's discussion and emphasis on the "Speenhamland system". But Polanyi's appraisal of this is much more negative than Fischer's.

"A Scrambling among Ourselves:" Growing Instability

"Continuing imbalances created instabilities".
In this section Fischer mentions the major wars are a cause of inflation, whereas he had not mentioned much about similar wars in previous inflationary periods. And in between the wars the sudden curtailments of expenditure generated deflations.

"As individuals and governments tried to cope in various ways, cultural stresses of high intensity began to develop in western society. The pattern was similar to that which had occurred in the great waves of the thirteenth and sixteenth centuries. One of the most dangerous was the growth of inequality".

Dr. Fischer vividly describes the deteriorating condition of the poorer classes. He also discusses the impact on investment, debt, speculation, and finances in general. Political tensions generated revolutionary movements.

The Revolutionary Crisis, 1789 - 1820

"After 1783, the great wave approached its climax, in a crisis that overswept the western world. In some ways this event was remarkably similar to the troubles of the fourteenth and seventeenth centuries. In others, it was entirely new". "The crisis began during the decade of the 1780's. It was triggered by change in the weather. During the late eighteenth century, the climate of western Europe became highly variable. The years from 1778 to 1781 were exceptionally warm, with long hot summers and unusually mild winters. Then the pattern reversed. From 1782 to 1787, Europe and America suffered hard winters, wet summers and short harvests".

He continues with this discussion at length. He then turns to government financial crises as financial ministers desperately sought to find added income.

"The politics of hunger were very different from those of starvation. In the early fourteenth century, staving peasants had been too weak to rebel. In the late eighteenth century, hungry peasants were outraged against feudal lords and Seignorial dues. They were infuriated by the prosperity of bourgeois speculators with their bulging granaries. They felt oppressed by bullying tax-gatherers and corrupt officials".

"There were no fewer than four French Revolutions in 1789: a continuing aristocratic revolt against royal ministers; a bourgeois revolution against the aristocracy; a rising of urban workers against the high bourgeoisie, and a peasant insurrection against all of their oppressors. Each of these movements was set in motion by rising prices. All were responses to the fiscal and economic crisis of the 1780's".

He describes each of these in detail.

"The effect of war was to deepen the revolutionary crisis". Then Britain and France turned to economic warfare. "As the great wave approached its catastrophic climax, the two strongest nations in the western world went systematically about the business of wrecking each other's economy. In this consummate act of human folly, markets were deliberately disrupted throughout western Europe. The price of food in Britain and France rose to unprecedented heights. Real wages plummeted, and poverty increased so rapidly that by 1812 more than half of all English families were dependent on some sort of poor relief".

The author describes the social and cultural results as well.

The Victorian Equilibrium, circa 1820 - 1896

"This new change regime might be called the price equilibrium of the Victorian era. It coincided almost exactly with the life of Queen Victoria herself and was closely linked to the cultural values that she represented".

An interesting aspect of this era, which he notes is that, while the near century as a whole showed equilibrium in prices and general international peace there were short, sharp wars (such as Crimean War, American Civil War, Franco-Prussian War). And each of these wars 'caused' sharp periods of inflation and were followed by post-war periods of deflation. These events, so clearly differentiated from the heterogenous events that characterize the earlier centuries, enable one to see, at least for such events, a direct relationship between war and price movements.

Dr. Fischer describes these occurrences in detail. Some comments: "Prices of specific commodities varied through space as well as time, but here again the variance tended to be highly stable and regular in its patterns". "Other complex patterns appeared in the relative movement of prices, wages, rent and interest". "Wages also rose in the United States, but the American pattern was less stable than that in Britain". These generalizations, it must be emphasized, refer to the income of workers only during periods of employment". Further, a rise in the cost of labor was not always a return to laborers themselves". "The increase in slave prices was greater in its magnitude than the rise of real wages for free labor". "The Victorian equilibrium was not a golden era of prosperity for everyone". "At the same time that real wages were rising, returns to capital (as measured by rates of interest) fell steadily during the nineteenth century, as they had done in other periods of price equilibrium". "Interest rates in private transactions were higher, and also more variable, than those for public funds". "Returns to land - both rent and real estate prices - also fell, then stabilized and fell again in the early nineteenth century". "Altogether, the relative returns to land, labor, and capital were much the same in the Victorian equilibrium as they had been during the Renaissance and Enlightenment". "They were also similar in their social results". "In the middle and later stages of every price equilibrium (but not in the early stages), the distribution of wealth tended to stabilize, or even to become a little more equal". "In other respects, however, the Victorian era was unique. It was more dynamic in its structure than any comparable period. During the equilibria of the Renaissance and the Enlightenment, population had increased very little. A balance was achieved between low rates of economic development and a lower pace of demographic growth. This was not the case in the Victorian era".

Of course this was the era of the Industrial Revolution which so uniquely and dramatically increased the output of goods and services not seen in the earlier eras.

Dr. Fischer point out that: "The Victorian equilibrium also derived its stability from magnitudes of change in economic growth". "Real output (per capita) of the American economy, for example, had grown only about 0,6 percent each year before 1790. After 1825, it grew at a rate approximately 1.6 percent a year - enough to double national product per capita every forty-three years".

Dr. Fischer writes much more on the nature of the era and both causes and effects, including intellectual, - theories of history, economics, sociology. Of course the volume of historical data available for analysis of this period is greater then before, and probably the interests of readers is as well.


The Fourth Wave: The Price Revolution of the Twentieth Century -
Again, the author discusses and analyzes this period in much greater detail than the previous three 'waves'. He dates the begining of this wave of increasing prices coincidentally to the 1897 Diamond Jubilee Day of Queen, Empress Victoria. Again, he opens the discussion with a brief description of existing conditions, focused on London.

Slow Beginnings, 1896 - 1914

"In the year 1896 wholesale commodity prices in Britain and the United States reached their lowest level in more than a century". "Then during the Diamond Jubilee year, they began to rise a little - not very much, not enough for anyone to notice". "But we may observe a large significance in that small advance. It marked the beginning of a price-revolution that would continue for more than a century". "Students of American history will observe an irony in the timing of this event. It began immediately after the presidential election of 1896. The major issues in that campaign were low prices and scarce money. The cost of living in the United States had shown no long-term secular increase since 1814. Commodity prices had actually fallen faster 1870. It is not easy for us, the children of a long inflation, to understand that our ancestors in the 1890's felt as deeply threatened by falling prices as we have been by rising ones".

Precisely, and now, again, only about 20 years after the author wrote this we are again greatly worried (at least the monetary authorities are) about deflation again.

Dr. Fischer continues: "Once again, the new inflation continued at a moderate pace from 1896 to 1914, averaging between 1 and 2 percent each year". "
"Rising prices were at first welcomed as a timely correction of a recent deflation that had caused many social problems". "Some attributed the increase in price levels to an expansion in the supply of gold and silver" ."After the fact, another monetarist explanation has been suggested by American economists who believe that the rise of prices after 1896 was caused by acceleration in the growth of the money supply within the United States=- from 6 percent in the period 1879-97, to 7.5 percent in the years 1897-1914". "That idea is mistaken".
However, "Monetary factors would play a major role in the price-revolution of the twentieth century, but the greater wave itself grew mainly from a different root. It was primarily (not exclusively) the result of excess demand, generated by accelerating growth of the world's population, by rising standards of living, and by limits on the supply of resources, all within an increasingly integrated global economy". "The accelerating growth of the world population was a driving force in the price-revolution of the twentieth century". "Throughout the twentieth century, there was also a continuing revolution in the material expectations among people of every social class - a cultural event that added to the growing pressure of demand on limited resources".

"At the same time that demographic and social pressures of that sort were building throughout the world, the supply of what Frederick Jackson Turner called 'free land' was begining to be exhausted". "The price-revolution of the twentieth century was not peculiar to any national economy or monetary system. It was a global event. Like very great wave that preceded it, this great movement began primarily because of the acceleration of demand outstripped the increase of supply. In other ways, however, the price-revolution of the twentieth century was different from its predecessors. In the twentieth century, the role of trade unions, democratic politics, and welfare states had a major impact on returns to labor".

Price Surges and Declines, 1914-45 "From 1896 to 1914, prices continued their slow, steady rise. Then suddenly a new trend appeared. The outbreak of war in 1914 shattered not only the peace in Europe but also its economic stability. A symptom and cause of that disruption was a massive surge of inflation in every western nation". "The great powers wee unprepared to bear the heavy cost of war, or to manage its economic consequences".

Dr. Fischer gives us very interesting (an generally overlooked data) on the different methods each country tried to use to finance its war machine, generally unsuccessfully. "Even after the fighting ended in 1918, the economic troubles continued". "In 1920, these trend lines broke". A severe economic depression occurred throughout the world". "Prices plummeted in a great deflation that was as disruptive as the previous rise had been".

Note that the previous inflations in wars also were followed by deflations. We might expect that the extraordinary scale of WWI and its inflation would be followed by an extraordinary deflation. Dr. Fischer describes this deflation of the 1920's and again in the 1930's in detail. Then he continues with economic policies during World War II and the inflation that mounted again in the 1950's. "In its economic impact of the Korean War was similar to the world wars that had preceded it. Once again inflationary pressures surged throughout the world".

The Discovery of Inflation, 1938 - 63

"Throughout all of these turbulent events, global prices continued to rise in peace as well as war. Even as price surges were restrained in some nations by strict controls, the secular trend moved inexorably upward".
"In the years after World- War II, this underlying inflationary psychology firmly established itself in North America and western Europe". "This had happened in every other price-revolution, but during the twentieth century, the institution machinery of modern society had grown stronger and more complex than before". "Institutional responses to rising prices reinforced inflation more powerfully than in earlier waves". "Industrial democracies began to create elaborate systems of institutional price-inflators... " "In the period from 1938 to 1968=, many inflationary floors were built into the American economy: floors under wages, pensions, and compensation for the unemployed; floors beneath farm prices, steel prices, liquor prices, and milk prices; floors for airline fares, trucking charges doctors' bills, and lawyers' fees".
"In 1938 the Congress enacted the Fair Labor Standards Act, which set the first national minimum wage". "Thereafter, the minimum wage was frequently raised, and extended more broadly through the economy". "This legislation helps to explain one of the distinctive features of the price-revolution in the twentieth century - its exceptionally high rate of advance".

The author turns to describe examples of the ways in which business also reacted to raise prices. He discusses the history of the candy bar. "The laws of neoclassical economics are unable to explain the price history of the American candy bar". "The more competitive the candy market became in America during the twentieth century the more prices rose".

"In all of these ways, the great inflation of the twentieth century differed from every price-revolution that had preceded it. Its velocity mass, and momentum were greater than those that came before".

The Troubles of Our Times

"In 1962, the price-revolution entered a new stage. After a period of comparatively slow increase during the late 1950's, inflation began to accelerate. This was a global movement". "The epicenter of this new movement was in western Europe, which had recovered very rapidly from the catastrophe of the second World War". "This economic prosperity had a strong political effect". "Many western nations took a turn to the left". "It was during this halcyon era of high prosperity and full employment that rates of inflation began to accelerate". "Many scholars mistakenly remember the Vietnam War as the pivotal event in the acceleration of inflation during the 1960's. In fact, the surge began a few years earlier, in another part of the world. The fiscal policies of the Johnson administration had an impact because they reinforced an existing trend and increased its momentum". "The roots of the price-revolution ran deep in the 20th century. As in every other great wave, the rapid increase of world population and the growth of aggregate demand were the primary cause of price increases".

Dr. Fischer continues with analysis of government economic policies, such as those of President Nixon (wage and price controls for instance).

Price Volatility: Oil Shocks and Commodity Surges, 1973-80 "Then came an entirely unexpected event, of the sort that happens frequently in price history and yet can never be predicted".

He is writing about the Arab Israeli Yom Kippur war and the OPEC oil price war. Plus the paniced response of other countries. Then in the 1980's came major innovations in the financial markets including increased speculative instabilities.

"Chicago's Mercantile Exchange invented futures-trading in stocks, with lower margin requirements than the stock exchanges themselves. This created opportunities for traders to shift their money back and forth from stocks to stock futures, and to extract large profits from small disparities". "The day of reckoning came on October 19, 1987".

The Cost of Anti-Inflation: Price Fears and Policy Recessions, 1980 - 95

"In the 1980's, the battered world economy slipped into another recession. This one was deep - the deepest since the 1930's". "It was marked by excess capacity and plummeting commodity prices". "The policy of using high interest rates to control high inflation had many economic and social effects". "The result was yet another recession in 1990-91". "Through it all, consumer prices kept on climbing". "Economic managers nervously shifted their weight from accelerators to brakes, then back to accelerators and once more to brakes". "In early 1995, prices rose at annual rates of 4 percent in Germany, 6 percent in Britain and Switzerland, 8 percent in Italy and Spain".

Growing Imbalances

"These stresses rose directly from the structure of the price-revolution itself. Every great wave had been much the same that way. In the late stages of these long movements, severe strains began to develop within social systems. The damage was done not by price-inflation itself, but by disparities in its operation".
"Some prices inflated more rapidly than others". "Price-relatives were much the same as in every long wave since the middle ages". "Once again, as thrice before, soaring prices of food and energy and raw materials had led to inflationary advance". "Prices of manufactured products such as cars textiles, appliances, toys, leisure goods, and furniture all lagged behind. The cause was the same as in every other price-revolution. The consequences fell most cruelly on the poor, who paid a large proportion of their income for food fuel and shelter". "While real wages fell, returns to capital rose more rapidly than the general price level. This was most dramatically so for landed capital. The cost of rent and real estate in the United States multiplied sixfold from 1960 to 1992, while consumer price index increased three fold. Prime real estate went up ten fold or more". "Interest rates also increased more rapidly than prices".

Remember this was written in 1996. Imagine what Fischer would write about the period 1996 - 2017.

"In other price-revolutions, rates of interest had risen more rapidly than prices, but this time another factor was also at work. During the late twentieth century, interest rates were deliberately driven up as a way of managing the economy and controlling inflation. When prices accelerated, the central banks raised interest rates to depress demand. In periods of recession, interest rates were driven down to stimulate economic growth". "That at least, was the idea. in practice the policy was distorted by a classic example of a 'rachet-effect', which allowed rates to move more freely up than down". "The ratcheting of rates reinforced the upward secular trend".
"When real wages fell and real returns to capital increased, the social consequences were inexorable. Inequality increased".
"Growing imbalances of another kind weakened the powers of governments and private institutions, when they were needed most".

Dr. Fischer describes fiscal and monetary policy of the 1980-90's and their social consequences including family disruptions and drug use.
The Crisis of the late Twentieth Century

"In the 1980's and 1990's material tensions approached the breaking point. Everywhere in the world, established orders came under heavy strain. Entire systems began to collapse, in a sequence of events that was similar to the climax of every other price-revolution since the Middle Ages".

He again describes events and trends. He includes the collapse of Communist USSR and the growing attacks by Muslim fundamentalists on their secular government regimes. Also, he includes the revolutions in Latin America. But already it appeared that the crisis had passed.
He wrote: "When these words were written in the Spring of 1996, the outcome was very much in doubt, but some trends were clear enough. Environing conditions that had set the price-revolution in motion were changing rapidly". He continues to cite reports that inflation was declining faster than economists expected and predicted. "So strong was the decline of prices by 1996 that several leading economists asserted that the age of inflation was at an end". But, "On the other side, central bankers continued to act on the belief that inflation was still the greatest danger".


Conclusion: -
"Works on this subject often end with a book of Revelations, or at least a chapter of Jeremiah, in which the reader is warned that we are heading for disaster - unless the author's ideas are speedily enacted. These dark prophecies find a growing market with modern readers, who appear to have an insatiable appetite for predictions of their own impending doom". "Even when prophecies fail, they are merely updated and sell briskly once again".

Dr. Fischer enjoys giving us an account of the Reverend Samuel Miller, who in the mid 19th century continued to predict the end of the world and when each date passed found 'errors' in his arithmetic and promptly set a new date, all the while with an increasing mass of followers.
Then he quotes noted economist John K. Galbraith, "the most common qualification of the economic forecaster is not in knowing, but in not knowing that he does not know. His greatest advantage is that all predictions, right or wrong, are soon forgotten'". He comments on the impossibility of predicting.

Price Revolutions: Structural Similarities

"This inquiry began with a problem of historical description about price movements in the modern world. Its primary purpose was to describe the main lines of change through the past eight hundred years. The central finding may be summarized in a sentence. We found evidence of four price-revolutions since the twelfth century; four very long waves of rising prices, punctuated by long periods of comparative price- equilibrium. This is not a cyclical pattern. Price revolutions have no fixed or regular periodicity. Some were as short as eighty years; others as long as 180 years. They differed in duration, velocity, magnitude, and momentum". But, "All had a common wave- structure, and started in much the same way".

Dr. Fischer describes the conditions in each wave in detail. At first people were living in a period of prosperity from the previous stable era and chose to have more, more children and higher living standards. This pressure began to cause price increases. In the second phase the price increases became much higher and were then made worse by wars or external events. But in the third place people came to recognize that the price increases they witnessed were not typical short term fluctuations but long-term, so began to try to find responses, but these then drove prices higher still. In the fourth phase inflation became even stronger and society became unstable until the wave 'crested and broke' causing economic collapse and social crisis. Then a new period of equilibrium developed. Eventually the benign conditions began to influence the people to begin the policies that caused a new wave to begin.

Sequential Differences

"Even as all price-revolutions shared a common wave-structure, they differed from one another in duration, magnitude, and range" "Since the Twelfth century, price- revolutions have succeeded on another in a continuous sequence of historical change". In each wave the rate of price increase has increased over the previous wave. The rate of change changed. The amount of change became greater during its final period. But the range of annual fluctuations during that wave diminished from the previous one. And the final phase was less culturally disastrous. Also, each successive wave was less severe demographically but greater in its social consequences. The succeeding social conditions of the populations have been better after each wave than after the preceding one. The author identifies five patterns on how rates of change do change.

Problems of Cause: Seven Models

"Seven causal models are dominant in the historical literature: monetarist, Malthusian, Marxist, agrarian, neoclassical, environmental and historicist". The monetarist theory is the simplest. It claims that prices are determined by the quantity and 'velocity' of the money supply. But this theory does not explain why money supplies increase. The Malthusian theory is based on the idea that great population sizes relative to resource bases force price rises due to completion over the supply. Marxist theory claims that changes in the structure of the system of production and of class differences cause increase in prices for goods and services. Another theory rests on changes in agricultural production - that is harvests. The neoclassical economic theory is based on the basic theory of a law of supply and demand. This relates also to the monetary theory which is that the price (value) of money itself changes with its supply and the demand for it. But another theory rests on ecological - that is environmental - conditions such as climate. The historicist theory bases explanation on the idea that each event in history is unique and has a set of specific characteristics which determine outcomes.

Another Causal Model: Autogenous Change

Dr. Fischer concludes: "Each of these seven causal strategies helps to explain important aspects of our problem. None suffices to resolve it. The explanatory task at hand requires another approach which might combine their strengths and correct their weaknesses: it should combine them. "It also builds upon an idea of history as a sequence of contingencies, in the special sense of people making choices, and choices making a difference. Two vital elements in this approach are ideas of contingency and choice".

Great, I have always stressed the role of contingency, but not only contingencies generated by human choices, but also by random events which also result in changed human choices. Humans are continually faced with conditions created by external contingencies which require decisions - that is choices, and the choices are themselves contingent on internal human beliefs and motivations.

Dr. Fischer leads the reader through a narrative beginning in the late period of a price equilibrium. His discussion is interesting and worth reading in detail, but I only summarize here. He describes the typical human decisions based on their evaluation of contemporary conditions, which they perceive as good. The decisions generate increased economic demand which may lead to a rising price level. If this level of prices begins to exceed the level of individual purchasing capacity the people will make new choices contingent on their new understanding. Among these is to increase the quantity of money. The results are further increases in prices and increased differentials in prices and inequality among and between people. In a dynamic fashion more people face more contingencies requiring more contingent choices. "Imbalances create instabilities". The whole cultural system becomes unstable. "The result is a protracted period of political disorder, social conflict, economic disruption, demographic contraction and cultural despair". Collapse occurs and gradually a new social basis follows.

Dr. Fischer summarizes: "This model understands price-revolutions as autogenous, self-generating processes. It is an historical idea. Each stage contains within itself the seed of the next stage, and the one after that. The causal sequence is not fixed and rigid in its determinism. It develops as a chain of individual choices and as a consequence its structure changes from one great wave to the next".

Retrospect and Prospect

So where are we headed circa 1996. "The evidence of this inquiry tells us that we are living in the late stages of a very long price-revolution, perhaps in the critical stage. It also tells us that these are global processes". "Our choices will make a difference for our children and grandchildren, and for generations yet unborn".

In this section the author changes is approach from analysis of historical conditions as he finds them to stating the political policies that he believes can or should mitigate at least the worse aspects of the coming cultural and social results of a late stage of a price- revolutionary era. First he blames failures of 'free markets' to deal with the problems by correcting the excesses and then he claims that there is no such thing as a "free market'.

Learning to Think of the Long Run

"First, we should learn to think historically about our condition. History is not only about the past. It is also about change and continuity. Most of all it is about the long run". "The two leading errors of economic planning are to impose short-term thinking on long-run problems, and to adopt temporal and anachronistic policies which do not recognize that the world has changed". Well, agree that these are two major problems. But for me the two worst errors are presuming materialism - materialistic beliefs govern economic actors - and the divorce of economic thinking by economists from political and sociological thinking not only on their own ideas from their assumptions on what real people think. In other words their belief in 'economic man'.

Expanding Contextual Knowledge

"We need more information about long trends and large contexts". "Our major institutions should take up the work of information- gathering on a larger scale".

Economic Policy

"The growth of knowledge might help us to invent better instruments for the management of modern economies". "Major gains have been made in the design of monetary policy, in the development of monetary institutions, and in the monetary education of electorates and elites". "A sound and disciplined monetary policy, rigorously applied, is fundamental to the health of a modern economy". "Important progress has been made in the use of interest rates as a way of regulating an economic system". "We have been less successful in the realm of fiscal policy - that is, the use of public revenue and public spending as tools of economic planning".

This is a pitch for expanded role of government in manipulating monetary and fiscal policies for political purposes. I deny that it has been more successful in recent times, as his description of the results demonstrates. He blames former President Reagan for increasing the national debt. I wonder what he thinks of the administration of President Obama.

Social Policy

He believes governments can control the social changes that take place during price-revolutions.


Appendix A Price Revolutions in the Ancient World
In this section Dr. Fischer cites various research studies that have found evidence of price-revolutions in Mesopotamia, Egypt, Greece and Rome.


Appendix B - The Crisis of the Fourteenth Century - A World Event?
Dr. Fischer cites studies that indicate a major crisis and collapse in China, but notes that academic opinion in mixed on the question of a price revolution.


Appendix C - The Seventieth Century: World Crisis?
For this one he provides some scholarly research to confirm that it was a world wide event.


Appendix D - America and Europe; One Conjuncture or Two?

In this section he means Latin America and cites work of Ruggiero Romano who proposed that the waves had different causes and results in South America.


Appendix E - Cycles and Waves
This is a particularly interesting appendix. Dr. Fischer discusses many of the main popular theories that claim historical trends are cycles, especially economic or financial cycles. Among them are the Kondratieff, Kuznets, Labrousse, and Kitchin cycles. He devotes most attention to Kondratieff and provides several pages of citations to academic studies and reports. He sees some evidence of shifting trends that may be partial cycles. He insists that the major changes he describes are waves. They begin in a period of stable prices, move through a period of increasingly extreme price increase and end in another period of stable prices. But they do not return to the same price level at which they began, but in each case end with a new price level much higher than they began.


Appendix F - Toward a Discrimination of Inflations
In this appendix he discusses the many and varied meanings for which the popular term 'inflation' is used. He cites some dictionary references in which two quite opposing concepts are both termed example of 'inflation' right on the same page. He recommends that types of inflation might be distinguished by cause, for which he defines seven different types. A conclusion: "All of this suggests a need for price theory that incorporates a component of historical thinking, and also for historical models that include a generous measure of economic theory".


Appendix G - Money of Exchange and Money of Account
This is an especially important appendix. In it he describes theories held in different historical times for the two concepts - Money of Exchange - and - Money of Account. Both have varied over time and they do not necessarily mean the same. Whole books have been written about the history of money and various concepts about both these and several other definitions of what is money.

As he writes: "A student of price history must confront a vast diversity of monetary units in the world - not merely in the variety of coins and paper currency, but also in the structure of monetary systems themselves". "One dimension of that complexity appeared in the difference between two types of monies: money of exchange and money of account".

He quotes Alexander Justice writing in 1707: "Money in general is divided into two sorts, imaginary and real". By this Justice means 'real money' is what is used as the money of exchange. It is what is passed between the buyer and seller in that process. His 'imaginary money' is found in what we call money of account - what appears on the ledgers of assets and liabilities, what is used to denominate credits and debits by merchants and bankers. We use the dollar today to denominate value in both ways, but that was not always so.

As he notes: "A case in point was eighteenth century England, and English-speaking North America. Money of exchange consisted primarily of two coins: the silver shlling and the golden guinea, which was worth 21 shillings". "At the same time, the most important money of account was a different unit: the pound sterling, worth twenty shilings". But pounds sterling did not exist in physical form. Then, in the 19th century the pound sterling was minted and became a major money of exchange while the guinea became the main money of account. Bills were negotiated and assessed in guineas but then paid in pounds. Confusing of course. He describes many more variations on this difference. Another problem was that each country and many other places such as important cities all minted their own coins, which then entered into international commerce. The author gives one interesting example, of a British general who fell overboard and whose baggage then was found to have in it joannes, moidores, guineas, pistoles, French guinea, dollar, halfpenny, bits of silver, pieces of gold and lumps of silver; all of which served as money of exchange.
Ingham, Martin, Davies are three basic references on money.


Appendix H - Nominal Prices and Silver Equivalents
This is another important appendix. Dr. Fischer takes up trhe problem of defining price itself. He explains how he has dealt with it in this book. He points out that the 'value' of coins varied as sovereigns and private individuals debased or rebased the silver or gold content of coins as they were minted. Some times coins would then be weighed in the market to establish their 'value' in actual weight of metal. But sovereigns also would define the 'value' of a coin by law no matter how it had been altered. But he does not go far enough.

In many graphs of prices of products such as grain or labor he will mark time in years on the x axis and oz. of silver on the y axis. Then plot the exchange value of the bushel of grain in terms of oz. of silver each year for a century. This, then, will show the 'price' of the grain rising against silver over time. The 'prices' shown are correct, this what grain actually cost in silver in the market. But the inference is confusing as to cause. We know for sure that the quantity of silver in circulation at different times was different and thus its 'value' itself changed. Adam Smith, for instance, notes that in the 16-17th century the huge quantity of sliver that flooded Europe from America made silver worth so little that people had a hard time getting rid of it in exchanges. So was that change depicted as the 'value' of grain increasing or was the 'value' of silver decreasing over time?

This is the very same problem we face today, is the changes in prices we see due to an increase in the 'value' of assets or a decrease in the 'value' of the unit of money?


Appendix I - Returns to Capital: Interest Rates as Historical Indicators
Dr. Fischer notes that this is an important issue, but one for which he has found no reliable data. He recommends further research.


Appendix J - Returns to Labor: Real Wages and Living Standards
In this interesting appendix Dr. Fischer cites the problems with finding a way to measure these issues. As with other issues there is the problem of 'nominal' versus 'real' for wages. The basic idea is to create a ratio of wage versus consumer prices and then compare that ratio over time. He cites six basic problems: "First, standard series of money wages tend to have structural distortions in wage coverage itself". "Second, wage series tend to omit unreported earnings". "Third, real wages are commonly computed only from money wages and take no account of income in kind". "Fourth, wage series in themselves tell nothing about the extent of unemployment or under employment". "Fifth, feminists rightly complain of a strong gender-bias in wage indices". "Sixth, wage series do not tell use enough about actual living conditions and the standard of living as they change through time".

I add another issue, calculating what to include in a measure of consumer prices.


Appendix K - Measures of Wealth and Income Distribution
This is another measure that is difficult to determine. Dr. Fischer cites the Lorenz curve as one popular measure and the Gini ratio is another. He does not discuss the difference between wealth and income, nor the question of what constitutes wealth anyway.


Appendix L - Price Revolutions and Inequality
Dr. Fischer poses some of the typical questions. "Why are some people rich and others poor"? What is the cause of material inequality"? "How has inequality changed through time"? He notes that there are many 'models' of inequality. Of course the whole problem treated in this appendix is dependent on valid measures discussed in the previous appendix. But he describes nine different 'models'. He comments that some at least of 'theories of inequality have been falsified by historical research".
Again, the whole subject is dependent on what one includes or excludes when assessing wealth or income.


Appendix M - Price Revolutions and Family Disintegration
This appendix describes one of Dr. Fischer's concerns, the impact of price-revolutions on society, in this case on families. Tis includes the structure of families, births inside and outside of marriage, effect of government policies such as welfare. While he does not claim there is causality, he does show correlation between the damaging impact of a greatly rising price-revolution and significant disturbance to family structure and prosperity.


Appendix N - Price Revolutions and Personal Violence
This is another of Dr. Fischer's principal interests. It is a matter or correlating crime waves with price-revolutions. He describes several theories about this.


Appendix O - Economics and History
This is one of the most important appendices. Actually it is more important than much of the main text. It is Dr. Fischer's appraisal and analysis of the state of the social sciences and humanities in academic settings. He denounces the post World War II change in which now establishments in the humanities specialities, such as economics, politics, history, anthropology, sociology and the rest demand that acceptable, valid academic study BEGIN with a statement of a theory and only after that turn to assembling real data - but on the basis of accepting data that validates the theory and rejecting data that does not.

Some quotations: "So universal has this orthodoxy become in the United States that scholars who work within it are unaware that any other mode of thinking is even possible". "Graduate students are required to embrace the conventional epistemology of their disciplines, on pain of expulsion from the guild. if they dare to think about the world in any other way, their work is judged 'unsound,' and they are sent upon their way". "The orthodox epistemology in American social science may be summarized in the sentence. it holds that every explicit description rests upon implicit theoretical assumptions that create the criteria for selecting the things to be described. It teaches that nothing can be understood, or even perceived, without reference to a theory. Tis epistemology argues not merely that theory centered thinking is a valid form of social science. it insists that theory is the ONLY form" "he cites an author thusly, 'without theory directing their interpretation and arrangement, facts are almost meaningless. "The practical effect of this new orthodoxy was profound. It radically changed the work that social scientists actually did". Of course this led to "They inveighed against theories of which they disapproved".

He writes much more about this. But I believe he has hit on the chief motivation behind this. By insisting that the student or researcher first formulate a 'theory' presentable to the establishment mentors they can control the conduct of research at its core. If they allowed researchers to assemble who know what actual data first the establishment mentors would lose the critical opportunity to direct learning toward their policies.


Some history reference books that provide background and details

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Philip Bobbitt - Shield of Achilles

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Edward Cheyney - The Dawn of a New Era 1250 - 1453

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Myron Gilmore - The World of Humanism 1453 - 1517

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Carl Friedrich - The Age of the Baroque 1610 - 1660

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Frederick Nussbaum - The Triumph of Science and Reason 1660 - 1685

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Penfield Roberts - The Quest for Security 1715 - 1740

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Walter Dorn - Competition for Empire 1740 - 1763

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Leo Gershoy - From Despotism to Revolution 1763 - 1789

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Crane Brinton - A Decade of Revolution 1789 - 1799

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Geoffrey Bruun - Europe and the French Imperium 1799 - 1814

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Frederick Artz - Reaction and Revolution 1814 - 1832

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Carlton J. Hayes - A Generation of Materialism 1871 - 1900

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Sir George Clark - The Seventeenth Century

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Paul Mantoux - The Industrial Revolution in the Eighteenth Century

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Charles Breunig - The Age of Revolution and Reaction - 1789 - 1850

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Norman Rich - The Age of Nationalism and Reform - 1850 - 1890

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Felix Martin - The Unauthorized history of Money

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Geoffrey Ingham - The Nature of Money

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Joel Mokyr - Culture of Growth: The Origins of the Modern Economy

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Kwasi Kwarteng - War and Gold: A 500-year History of Empires, Adventures, and Debt

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Frank Trentmann - Empire of Things: How We Became a World of Consumers, from the 15th Century to the 21st


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