Marie Kerhuel in particular developed an approach distinct from Simiand’s monetary model, Labrousse’s harvest fluctuations, and Abel’s Malthusian-Ricardian approach. She stressed the cultural correlates of price movements. This subject has been so totally neglected by American scholars that one of the few copies of Marie Kerhuel’s thesis available in the United States (in the economics collection of Widener Library, Harvard University) had never been borrowed or even read in fifty years, until I took it off the shelves for this inquiry. Its brittle pages were still uncut.
One of the most intelligent and creative analyses of long-term price movements is to be found in the work of Italian historian Jenny Griziotti-Kretschmann, Il problema del trend secolare nelle fluttuazioni dei prezzi (Pavia, 1935, Pubblicazioni della R. Université di Pavia, no. 54), a thesis supported by empirical data published separately in the same author’s “Ricerche sulle fluttuazioni economiche di lungadurate,” Giornale degli Economisti 73 (1933) 461–508. Griziotti-Kretschmann found that long price movements did not conform to the Kondratieff pattern, and did not correlate with world production of gold and silver, and were not caused primarily by population movements, but rose instead from a “structural transformation in economic and political systems.”
The work of Griziotti-Kretschmann was far ahead of its time. It was highly regarded by European scholars and heavily used by Fernand Braudel and others, but it is so little known to American scholars that the copy in Harvard’s Widener Library had not been borrowed for twenty-two years before it was taken out in the course of this inquiry.
Various elements of Kondratieff’s waves, Simiand’s alpha-beta phases, Labrousse’s harvest rhythms, Abel’s agrarian konjunktur, Kerhuel’s cultural correlates, and Griziotti-Kretschmann’s lungadurata caused by “structural transformation in economic and political systems”—were brought together by Fernand Braudel in three classic works of modern historiography: The Mediterranean and the Mediterranean World in the Age of Philip II (2 vols., 1949; 2d ed., 1966, New York, 1972); Capitalism and Material Life, 1400–1800 (New York, 1967) plus Afterthoughts on Material Civilization and Capitalism (Baltimore, 1977); and especially Civilization and Capitalism, Fifteenth-Eighteenth Century (3 vols., New York, 1982–84).
These books display the great strengths of the Annales school: breadth of comprehension, depth of insight, maturity of judgment, flair and creativity. English-speaking scholars (e.g., Charles Kindleberger in the New York Times, and Bernard Bailyn in the Journal of Economic History) have fairly complained of vagueness, contradiction, and incoherence, but for most readers (including this one) the strengths remain predominant.
In the third volume of Civilization and Capitalism Fernand Braudel recognized a secular trend similar in timing to the great waves of this book, but he jumbled it together with Kondratieff cycles, Simiand phases, and Labrousse intercycles, made no systematic attempt to reconcile these movements or to discuss them in detail, and dismissed the problem of analyzing and explaining the secular trend as an “impossible” task. Despite those deficiencies, these works are full of insight and deserve their reputation as masterworks of modern scholarship. A helpful discussion is Samuel Kinser, “Annaliste Paradigm? The Geohistorical Structuralism of Fernand Braudel,” American Historical Review 86 (1981) 63–105.
Throughout his career, Braudel also contributed many essays and monographs on problems of price history, including “Monnaies et Civilisations: De l’or du Soudan à l’argent d’Amérique,” Annales E.S.C. 1 (1946) 9–22; idem, “Histoire et sciences sociales: La longue durée,” Annales E.S.C. 4 (1958) 725–53; idem and Frank Spooner, “Prices in Europe from 1450 to 1750,” in M. M. Postan et al., The Cambridge Economic History of Europe, vol. 4, (E. E. Rich and C. H. Wilson, eds. Cambridge, 1967), 378–486, a work of larger significance than its title suggests.
Among the most important histories of the “longue durée” have been local or localized studies—another genre in which the Annales school has led the world. The classical works are Pierre Goubert, Beauvais et le Beauvaisis de 1600 à 1730. Contribution à l’histoire sociale de la France du XVIIe siécle (2 vols., Paris, 1960); Emmanuel Le Roy Ladurie, Les paysans de Languedoc (Paris, 1966); Pierre Vilar, La Catalogne dans l’Espagne moderne: Recherches sur les fondements économiques des structures nationales (3 vols., Paris, 1962); Pierre Léon, La naissance de la grande industrie en Dauphinéfin du XVIIe siècle — 1869 (2 vols., Paris, 1954); P. Deyon, Amiens, capitale provinciale . . . (Paris, 1967); and Pierre and Huguette Chaunu, Seville et l’Atlantique (1504–1650 (8 vols., Paris, 1955–60), the ultimate grand thèse. These works are familiar to American social historians, but the problématiques that inspired them are not well understood.
Long-Term Secular Trends: Two Italian Dissenters
One historian has challenged the model of long waves and has even disputed the existence of the most familiar long wave: the price revolution of the sixteenth century. Carlo Cipolla, in “The So-Called Price Revolution’: Reflections on the ‘Italian Situation,’” (in Peter Burke, ed., Economy and Society in Early Modern Europe: Essays from Annales [New York, 1972], 42–46) argues that the inflation of the sixteenth century was not much greater than that which occurred in what he called the “century of monetary stability” from 1791 to 1912.
Cipolla is mistaken. He defined his “century of monetary stability” to include not only the Victorian equilibrium but also the end of the great wave of the eighteenth century and the beginning of the great wave of the twentieth. Further, he defined the price revolution of the sixteenth century in such a way as to rule out one of its most inflationary stages. When these errors are corrected Cipolla’s thesis collapses, and the “so-called” price revolution of the sixteenth century survives his skepticism.
Another approach is that of Ruggiero Romano, “Movimento de los precios y desarrollo económico: el caso de Sudamérica en el siglo XVIII,” Desarrollo Económico 3 (1963) 31–43; idem, “Some Considerations on the History of Prices in Colonial Latin America,” in Lyman L. Johnson and Enrique Tandeter, eds., Essays on the Price History of Eighteenth-Century Latin America (Albuquerque, 1990), 35–72. Ruggiero Romano proposed the thesis that the long waves of Simiand, Abel, etc., occurred in Europe but not in Latin America. He suggested the existence of a distinctive “American conjuncture” or secular trend, in many ways opposite of European tendencies.
It was an ingenious theory, but the evidence of American price movements compiled in Johnson and Tandeter in general does not support it. A few local patterns in Latin America offer some support for Romano; ironically, price movements in the mining center of Potosí were closest to his American conjuncture and farthest from the European norm. But most Latin American series indicated that the price revolutions of the sixteenth and twentieth centuries were operative in Latin America. So also was the price wave of the eighteenth century in its later and most inflationary stage. As evidence accumulates throughout the world, great waves appear increasingly to be global movements, with important regional variations.
Long-Term Secular Trends: A British Contribution
The most important British contribution to price history was made by Henry Phelps-Brown, a civil servant and scholar who held the chair of economics of labor at the London School of Economics. In the early 1950s he came upon a copy of H.O. Meredith’s Economic History of England and discovered two pull-out graphs at the back of the book. One displayed the wages of a carpenter and a farm worker in England for every decade from 1270 to 1890. The other graph showed their purchasing power in terms of wheat prices. Meredith concluded that real wages were higher in the fifteenth century than at any other time until the nineteenth. “This challenged investigation,” Phelps-Brown recalled. He went to work with Sheila Hopkins (Mrs. L. S. Presnell), and the results were carefully constructed indices of “consumable prices” and real wages from 1264 to 1954, in publications cited among primary sources above.
Phelps-Brown’s work is best known for its price series, which
are now beginning to be reproduced in American economics textbooks such as the most recent edition of Samuelson and Nordhaus. But the most important finding was the wage series, which gave a new meaning to the main lines of change. It shifted the perspective on price movements from propertied elites to the experience of ordinary people. Hamilton, Abel, Fourastié, and Grandamy all had been aware that a gap had opened between prices and wages during the price revolution of the sixteenth century. But Braudel remembers that it was due “particularly to the published research of E. H. Phelps-Brown and Sheila Hopkins” that scholars became aware of an actual “drop in real wages.” (The Perspective of the World, III, 87). This discovery revised many earlier interpretative judgments by Abel, Hamilton and Braudel himself of social and economic conditions in various stages of price revolutions. It opened the way for the interpretation that appears in this book.
Long-Term Secular Trends: American and British Writings
English-speaking scholars who have written at length about long-term secular movements in price history have tended to depart from the conventional models of Continental scholarship. Many have worked out their own synthetic models in a variety of ways. Four of these syntheses show something of the range and diversity of the work in Britain and the United States, and also its distinctive character and limits.
Phyllis Deane, “Inflation in History,” in David F. Heathfield, ed., Perspectives on Inflation: Models and Policies, (London, 1979), 1–37 is an historical overview of price movements. Deane, whose scholarship centers on the economic history of Britain, derives a general synthesis mainly from British materials. She identifies three periods of rising prices: the price revolution of the sixteenth century, which she dates 1500–1650; the war inflation of 1793–1815 (that is, the crest of the third wave); and the “twentieth-century inflation.” The author was not aware of the medieval price revolution or of the long rise of prices in the mid-eighteenth century. She assigned a different cause to each inflation, a classic historicist conclusion.
Another and very different approach appears in the work of Rondo Cameron, an able and learned American economic historian who developed an original historical model in “The Logistic of European Economic History: A Note on Historical Periodization,” Journal of European Economic History 2 (1973) 145–48; “Europe’s General Logistic,” Comparative Studies in Society and History 12 (1975) 452–62; “Economic History, Pure and Applied,” Journal of Economic History 36 (1976) 3–27; and A Concise Economic History of the World from Paleolithic Times to the Present (1989; 2d ed., New York, 1993), an excellent and very graceful survey of world history from an economic perspective. Cameron organizes his understanding of modern European history into a sequence of three “logistics” or logistic curves of development: the first running from the ninth to the fourteenth century; the second from the late fifteenth to the seventeenth century; and the third from the mid-eighteenth to the second quarter of the twentieth. His periodization derives mainly from patterns of population growth and from his understanding of rhythms of economic growth. Cameron’s model is similar in timing to our price revolutions in the period from the twelfth century to the mid-seventeenth, but differs in its reading of the evidence from the late eighteenth to the late twentieth century.
A third approach from a business perspective appears in R. G. Lipsey, “Does Money Always Depreciate?” Lloyd’s Bank Review, October 1960, 1–13. Lipsey asks if inflation would have been a betting proposition for a businessman from 1275 to 1949. He concludes that if the businessman had used a fifty-year “time horizon,” an inflationary assumption would have been “a fairly good bet” throughout that period except in the fourteenth and nineteenth centuries. If, however, a ten-year horizon is used, then it would have been a bad bet in most decades during the fourteenth, fifteenth, seventeenth and nineteenth centuries. That judgment is roughly (very roughly) consistent with the rhythm of price revolutions, but its use of fixed periods of analysis masks the main lines of change.
A fourth attempt to make sense of the subject is Anna J. Schwartz, “Secular Price Change in Historical Perspective,” Journal of Money, Credit, and Banking 5 (1973) 243–69. Schwartz covers a large territory in time and space, mainly in an effort to validate a monetarist interpretation of price movements. She argues that “episodes of rising prices have alternated with episodes of declining prices apparently for as long as money has been used.” But her empirical grasp of price movements was faulty—a mix of long price-waves in the sixteenth and twentieth centuries and climactic price surges in other waves. Schwartz concluded that “long-run price changes consistently parallel the monetary changes, with one exception for England in the sixteenth century,” But the author had very little evidence of long-term change in the quantity of money before the late nineteenth century except for sixteenth-century England. She recognized no other pattern in price movements beyond that of the monetary model. Critiques of her essay have been published by Lance Davis and Paul B. Trescott in the Journal of Money, Credit, and Banking 5.2 (1973) 269–71. Davis is generally hostile to Schwartz’s monetary model and offers a series of ad hoc explanations for individual price movements. Trescott complains of a lack of empirical rigor in the monetarist model and adds an interesting attempt at correlation between prices and the money supply in the United States from 1870 to 1970. Anna Schwartz in response protests against the poverty of “ad hoc” explanations.
Attempts to generalize primarily from American price movements appear in George F. Warren and Frank A. Pearson, Prices (New York, 1933), an able and still informative work which is marred by ignorance of trends outside the United States before the twentieth century. A critique appears in Charles O. Hardy, The Warren-Pearson Price Theory (Washington, 1935).
Another American study is Walter W. Haines, “The Myth of Continuous Inflation: United States Experience, 1700-1980,” in Schmukler and Marcus, eds., Inflation through the Ages, 183-204, which also interprets the history of prices as a discontinuous sequence of episodic movements. This Anglo-American literature is very different from that of French, German, and Italian scholars, in both its empirical base and its conceptual models.
In the late twentieth century, English-speaking scholars began at last to come to terms with the European literature. A leader in this effort is sociologist Jack A. Goldstone. In “The Cause of Long-Waves in Early Modern Economic History,” Research in Economic History 6 (1991) 51–92, Goldstone has the descriptive evidence firmly in hand. He builds beyond European scholarship by adding data on long waves in Asia and the Middle East. His explanatory model is unstable and tends to shift from broad ideas of institutional structure to a narrow emphasis on mortality experiences, which will not bear the weight that he wishes to put on them. Overall, however, Goldstone’s work is an important contribution, both in its breadth of insight and in its attempt to link economic tendencies to social and demographic processes. Another useful work is Don Pearlberg, An Analysis and History of Inflation (Westport, Conn., 1993), a survey of both long-term price movements and hyperinflations.
Descriptive Patterns: Cycles
On substantive patterns of change in price history, the literature might be divided into two parts: studies of long-term secular change and discussions of cyclical movements. By far the largest body of literature is about cycles. The journals called Cycles, Kyklos, Futures, and Technological Forecasting and Social Change publish many essays that discuss a variety of cyclical rhythms, including Kondratieff “long waves” (50 years), Kuznets “long swings” (20 to 25 years), Labrousse “intercycles” (10 to 12 years), Juglar trade cycles (7 to 8 years), and Kitchin business cycles (3 to 4 years).
The largest and most controversial literature is about Kondratieff waves (often called long waves), which are thought to cause major depressions every half century (ca. 1815, 1870, 1929, and 1970). The seminal monograph was written by Nikolai D. Kondratieff, head of the Moscow Institute for Business Cycle Research, and published in Russian in 1925. A German translation appeared as �
�Die Langen Wellen der Konjunktur,” Archiv für Sozial-wissenschaft und Sozialpolitik 56 (1926) 573–609. An abridged English translation was published in The Review of Economic Statistics 17 (1935) 161–72. A complete English text is in Review 2 (1979) 519–62. The model was elaborated by Kondratieff in The Long Wave Cycle (1928; rpt. New York, 1984).
As Kondratieff himself was careful to point out, similar models had been set forward by A. Spiethoff in Handwörterbuch der Staatswissenschaft (1923); and by two Dutch socialists, S. de Wolff in “Prosperitats-und Depressionsperioden,” Lebendige Marxismus (Jena, 1924); and even earlier by C. van Gelderen, “Springvloed: Beschouwingen over industrieele ontwikkeling en Prijsbeweging,” De Niewe Tijd 18 (1913). Among Marxists, Kondratieff waves were condemned as heresy and were denounced by Trotsky and many Old Bolsheviks. In 1930, Kondratieff was sent to Siberia, where he died in a Communist concentration camp. See Richard B. Day, “The Theory of Long Waves: Kondratieff, Trotsky, and Mandel,” New Left Review 99 (1976) 67–82. An excellent historiographical essay on the diffusion of Kondratieff’s work is Jean-Louis Escudier, “Kondratieff et l’histoire économique Française,” Annales E.S.C. (1993) 359–83.
French and German historians have always been much interested in Kondratieff waves—more so than their American and British colleagues. Extended discussions include Gaston Imbert, Des mouvements de longue durée Kondratieff (Aix en Provence, 1959); Ulrich Weinstock, Das Problem der Kondratieff-Zyklen (Berlin, 1964); and Jean-Louis Escudier, “Kondratieff et l’histoire économique française,” Annales E.S.C. (1993) 359–83.
In the English-speaking world, interest surged during the 1930s in works such as Joseph Schumpeter, Business Cycles (New York, 1939), then declined, and revived in the 1970s. The best introduction to a large literature is Joshua S. Goldstein, Long Cycles: Prosperity and War in the Modern Age (New Haven, 1988), a careful, honest, and thought-provoking work that analyzes thirty-three attempts by various scholars to test the existence of the Kondratieff wave, mostly with positive results. Goldstein’s excellent bibliography also lists hundreds of works by political scientists and sociologists on various aspects of this question. For other discussions, see Donald V. Etz, “The Kondratieff Wave: A Review,” Cycles (1973) 73–74; J. J. Van Duijn, The Long Wave in Economic Life (1979; rpt. Boston, 1983); John C. Soper, The Long Swing in Historical Perspective (New York, 1978); Casper Van Ewijk, “A Spectral Analysis of the Kondratieff Cycle,” Kyklos 35 (1982) 468–99; T. Kitwood, “A Farewell Wave to the Theory of Long Waves,” Universities Quarterly — Culture, Education, and Society 38 (1984) 158–78; Irma Adelman, “Long Cycles: Fact or Artifact?” American Economic Review 55 (1965) 444–63; R. Hamil, “Is the Wave of the Future a Kondratieff?” Futurist 13 (1979) 381–84; J. P. Harkness, “A Spectral Analysis of the Long Swing Hypothesis in Canada,” Review of Economics and Statistics 50 (1968) 429–36; Rainer Metz, ‘“Long Waves’ in English and German Economic Historical Series from the Middle of the Sixteenth to the Middle of the Twentieth Century,” in Rainer Fremdling and Patrick K. O’Brien, eds., Productivity in the Economics of Europe (Stuttgart, 1983), 175–219; idem., “Long Waves in Coinage and Grain Price-Series from the Fifteenth to the Eighteenth Century,” Review 7 (1984) 599–647; Paolo S. Labini, “Le problème des cycles économiques de longue durée,” Economic Appliquée 3 (1950) 481–95; Jos. Delbeke, “Recent Long-Wave Theories: A Critical Survey,” Futures 13 (1981) 246–57; M. N. Cleary and G. D. Hobbs, “The Fifty-Year Cycle: A Look at the Empirical Evidence,” in Christopher Freeman, ed., Long Waves in the World Economy (London, 1983); Heinz-Deiter Haustein and Erich Neuwirth, “Long Waves in World Industrial Production, Energy Consumption, Innovations, Inventions, and Patents and Their Identification by Spectral Analysis,” Technological Forecasting and Social Change 22 (1982) 53–89; Ghalib M. Baqir, “The Long Wave Cycles and Re-Industrialization,” International Journal of Social Economics 8 (1981) 117–23; Klas. Eklund, “Long Waves in the Development of Capitalism?” Kyklos 33 (1980) 383–419; Hans Bieshaar and Alfred Kleinknecht, “Kondratieff Waves in Aggregate Output?” Konjunktur Politik 30 (1984); David M. Gordon, “Stages of Accumulation and Long Economic Cycles,” in Terence K. Hopkins and Immanuel Wallerstein, eds., Processes of the World System (Beverly Hills, 1980); Alfred Kleinknecht, “Innovation, Accumulation, and Crisis: Waves in Economic Development,” Review 4 (1981) 683–711; Ernest Mandel, Long Waves of Capitalist Development (Cambridge, 1980).
Great Wave Page 46
