Great Wave

by Fischer, David Hackett;

  On unemployment, see Marie Dessauer, “Unemployment Records, 1849–59,” Economic History Review 10 (1939–40) 38–43; and Alex Keyssar, Out of Work; The First Century of Unemployment in Massachusetts (Cambridge, 1986).

  On wealth and income distribution, see Peter H. Lindert and Jeffrey G. Williamson, “Three Centuries of Wealth Inequality,” Research in Economic History 1 (1976) 69–122; Stephen Thernstrom, Poverty and Progress: Social Mobility in a Nineteenth-Century City (Cambridge, 1964).

  On cultural trends in the Victorian equilibrium, Walter E. Houghton, The Victorian Frame of Mind, 1830–1870 (New Haven, 1957), is a valuable work though it makes too much of similarities between Victorian and post-Victorian thought; still useful for this inquiry are G. M. Young, Victorian England: Portrait of an Age (Garden City, 1954) and W. L. Burn, The Age of Equipoise (1964; New York, 1965).

  The Price Revolution of the Twentieth Century

  On the origins of the twentieth century price revolution, two general works are indispensable: Jan Romein, The Watershed between Two Eras: Europe in 1900 (Middletown, 1978); Geoffrey Barraclough, An Introduction to Contemporary History (Harmondsworth, 1967).

  The statistical evidence is summarized in B. R. Mitchell, European Historical Statistics, 1750–1988 (3d ed., New York, 1992); idem, International Historical Statistics: Africa and Asia (New York, 1995); idem, International Historical Statistics: The Americas and Australasia (London, 1995); and national yearbooks listed above.

  The global dimensions of price movements in the twentieth century are examined in Arthur B. Laffer, “The Phenomenon of Worldwide Inflation: A Study of International Market Integration,” in David I. Meiselman and Arthur B. Laffer, eds., The Phenomenon of Worldwide Inflation (Washington, 1975), 27–52; A. J. Brown, The Great Inflation, 1939–51 (London, 1955); idem, World Inflation since 1950 (Cambridge, 1985); Geoffrey Maynard and W. van Ryckegham, eds., A World of Inflation (New York, 1975); Gardner Ackley, Stemming World Inflation (Paris, 1971); Charles S. Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge, 1987).

  On the beginning of the price revolution of the twentieth century, two different interpretations appear in Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867–1960 (Princeton, 1963) and W. Arthur Lewis, Growth and Fluctuations, 1870–1913 (London, 1978). Still useful are J. L. Laughlin: “Gold and Prices, 1890–1907,” Journal of Political Economy (1909) 257–71, and idem “Causes of the Changes in Prices since 1896,” American Economic Association Papers and Proceedings (1911) 26–36.

  On economic trends before 1914, a major work from a monetarist perspective is Michael Bordo, “The Effect of the Sources of Change in the Money Supply on the Level of Economic Activity” (thesis, Chicago, 1972). Other studies include Donald McCloskey and J. Richard Zecher, “How the Gold Standard Worked, 1880–1930,” in J. A. Fraenkel and H. G. Johnson, eds., The Monetary Approach to the Balance of Payments (London, 1976); R. P. Higonnet, “Bank Deposits in the United Kingdom, 1870–1914,” Quarterly Journal of Economics 20 (1957) 329–67; Austin H. Spencer, An Examination of Relative Downward Industrial Price Flexibility, 1870–1921 (New York, 1978), on eastern Europe.

  For the economic and social history of price movements during and after World War I, see John Stevenson, British Society, 1914–1945 (London, 1984), 46–102; Arthur Marwick, The Deluge: British Society and the First World War (Boston, 1965); A. J. P. Taylor, English History, 1914–1945 (New York, 1965); James Harvey Rogers, The Process of Inflation in France, 1914–1927 (New York, 1929); Charles S. Maier, Recasting Bourgeois Europe: Stabilization in France, Germany, and Italy in the Decade after World War I (Princeton, 1975); Stephen A. Schuker, The End of French Predominance in Europe: The Financial Crisis of 1924 and the Adoption of the Dawes Plan (Chapel Hill, 1976); R. H. Tawney, “The Abolition of Economic Controls, 1918–21,” Economic History Review 13 (1943) 1–30; Alice Coulon, Recherches sur les origines du boom et de la crise de 1920 (Montlucon, 1946).

  Germany’s experience of hyperinflation has engendered a large literature; see Carl-Ludwig Holtfrerich, The German Inflation, 1914–1923: Causes and Effects in International Perspective (Berlin, 1986); “Political Factors of the German Inflation, 1914–1923,” in Schmukler and Marcus, eds., Inflation through the Ages: Economic, Social, Psychological, and Historical Aspects, (New York, 1983) 400–416; Andreas Kunz, Civil Servants and the Politics of Inflation in Germany, 1914–1924 (New York, 1986); Gordon Craig, Germany, 1866–1945 (New York, 1978); Gerald Feldman, Iron and Steel in the German Inflation, 1916–1923 (Princeton, 1977); K. Laursen and J. Pederson, The German Inflation, 1918–1923 (Amsterdam, 1964); Gerald D. Feldman et al., The German Inflation Reconsidered: A Preliminary Balance (Berlin, 1982); idem, The Experience of Inflation: International and Comparative Studies (Berlin, 1984); idem, Die Nachwirkungen der Inflation auf die deutschen Geschichte, 1924–1933 (Munich, 1985); idem, The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914–1924 (New York, 1993).

  For other hyperinflations in eastern and central Europe after World War I, see a valuable group of articles: György Ránki, “Inflation in Post-World War I East Central Europe” and “Inflation in Hungary”; Ljuben Berov, “Inflation and Deflation Policy in Bulgaria during the Period between World War I and World War II”; Mugur Isarescu, “Inflation in Romania during the Post-World War I Period”; Zbigniew Landau, “Inflation in Poland after World War I”; Alice Teichova, “A Comparative View of the Inflation of the 1920s in Austria and Czechoslovakia”; all in Schmukler and Marcus, eds., Inflation through the Ages, 475–571; also Z. S. Katsenellenbaum, Russian Currency and Banking, 1914–1924 (London, 1925); J. van Walre de Bordes, The Austrian Crown: Its Depreciation and Stabilization (London, 1924).

  Price movements between the wars are discussed in Derek H. Aldcroft, Finanz und wirtschaftspolitsche Fragen der Zwischenkreigszeit (Berlin, 1973); Albert Sauvy, Histoire économique de la France entre les deux guerres (4 vols., Paris, 1965–75); Emile Moreau, Souvenirs d’un gouverneur de la Banque de France (Paris, 1954); Sidney Pollard, The Development of the British Economy, 1914–1950 (London, 1962).

  For the great depression see John Kenneth Galbraith, The Great Crash, 1929 (Boston, 1955); Lester V. Chandler, America’s Greatest Depression, 1929–1941 (New York, 1970); Murray N. Rothbard, America’s Great Depression (Princeton, 1963; Kansas City, 1969); Karl Brunner, ed., The Great Depression Revisited (Boston, 1981); Peter Temin, Did Monetary Forces Cause the Great Depression? (New York, 1976).

  On price movements during and after World War II see Arthur Joseph Brown, The Great Inflation, 1939–1951 (New York, 1983); Eric F. Goldman, The Crucial Decade and After: America, 1945–1960 (New York, 1966); Arthur Hanau, Die deutsche landwirtschaftliche Preis aud Marktpolitik im Zweiten Weltkreig (Stuttgart, 1975); John J. Klein, “German Money and Prices, 1932–44,” in Milton Friedman, ed., Studies in the Quantity Theory of Money (Chicago, 1956); Henry S. Miller, Price Control in Fascist Italy (New York, 1938); Gail E. Makinin, “The Greek Hyperinflation and Stabilization of 1943–1946,” Journal of Economic History 46 (1986) 755–807; and A. J. Brown, The Great Inflation, 1939–1951 (London, 1955); and Robert S. Morrison, The Real War on Inflation Has Not Begun . . . (Ashtabula, Ohio, 1982), which covers the period from 1937 to 1980; A fascinating sidelight is R. A. Radford, “The Economic Organization of a P.O.W. Camp,” Economica 12 (1945).

  The economic history of the United States since World War II is the subject of Robert Aaron Gordon, Economic Instability and Growth: The American Record (New York, 1974); Herbert Stein, Presidential Economics: The Making of Economic Policy from Roosevelt to Reagan and Beyond (rev. ed., New York, 1985); Peter Bohley, Die Recession der Jahre 1957–58 in den Vereinigten Staaten von Amerika . . . (Berlin, 1963).

  On price movements in Germany see Günter Schmölders, “The German Experience,” in Inflation: Long-Term Problems, Proceedings of the Academy of Political Science 31 (1975), 201–211; Frit
z Rahmeyer, Sektorale Preisentwicklung in der Bundesrepublik Deutschland, 1951–1977: Eine theoretische und empirische Analyse (Tubingen, 1983).

  The Italian experience is the subject of Georgio Rota, L’Inflazione in Italia, 1952–1974 (Turin, 1975). On Belgium, see L. H. Dupriez, Monetary Reconstruction in Belgium (New York, 1947). For Great Britain, see Paul Ormerod, “Alternative Models of Inflation in the United Kingdom . . . ,” in Schmukler and Marcus, eds., Inflation through the Ages, 643–58.

  On the Communist economies, see Wolfgang Teckenberg, “Economic Well-Being in the Soviet Union: Inflation and the Distribution of Resources,” in Schmukler and Marcus, eds., Inflation through the Ages, 659–676; Jan Adam, Wage Control and inflation in the Soviet Bloc Countries (London, 1979); F. D. Holzman, “Soviet Inflationary Pressures, 1928–1957, Causes and Cures,” Quarterly Journal of Economics 74 (1960) 167–88; Fyodor I. Kushnirsky, Growth and Inflation in the Soviet Economy (Boulder, 1989); Adam Martan, Consumer Prices in Austria and Hungary, 1945–1972 (Vienna, 1974); Sofija Popov and Milena Jovicic, Uticaj Licnih Dohodaka na Kretanje Cena (Belgrade, 1971), with a summary and conclusion in English, a study of cost-push inflation in Yugoslavia; J. M. van Brabant, Regional Price Formation in Eastern Europe (Doedrecht, 1987), on price movements after 1945.

  For China there is Ying Hsin, The Price Problems of Communist China (Kowloon, 1964).

  On inflation in Latin America, see Walter Manuel Beveraggi Allendi, La inflacion Argentina, 1946–1975 (Buenos Aires, 1975); Stefan Robeck, “The Brazilian Experience” and William P. Glade, “Prices in Mexico: From Stabilized to Destabilized Growth,” in Proceedings of the American Academy of Political Science 31 (1975) 179–187, 188–200; R. C. Vogel, “The Dynamics of Inflation in Latin America,” American Economic Review 64 (1974) 102–14; Susan M. Wachter, Latin-American Inflation (Lexington, Mass., 1976); Felipe Pazos, Chronic Inflation in Latin America (New York, 1972); Rosemary Thorp and Lawrence Whitehead, eds., Inflation and Stabilisation in Latin America (New York, 1979); John Williamson, ed., Inflation and Indexation: Argentina, Brazil, and Israel (Washington, 1985); Alain Ize and Gabriel Vera, La inflacion en Mexico (Mexico City, 1984).

  On price trends in South Asia, Chandulal Nagindas Vakil, War against Inflation: The Story of the Falling Rupee, 1943–1977 (Delhi, 1978); Yogesh C. Halan, “Inflation, Poverty and the Third World: India’s Experience,” in Schmukler and Marcus, eds., Inflation through the Ages, 625–42; R. J. Venkateshwaran, The Tragedy of the Indian Rupee (Bombay, 1968); John Latham, “Food Prices and Industrialization: Some Questions from Indian History,” IDS Bulletin 9 (1978) 17–19.

  For East Asia, see Kokishi Asakuri and Chiaki Nishiyama, eds., A Monetary Analysis and History of the Japanese Economy, 1868–1970 (Tokyo, 1968); Gilbert Brown, Korean Pricing Policies and Economic Development in the 1960s (Baltimore, 1973).

  For African trends, see Jean Phillipe Peemans, Diffusion du progres économique et convergence des prix: Le cas Congo-Belgique, 1900–1960; la formation du systeme des prix et salaires sand une economie dualiste (Louvain, 1968).

  For Oceana, there is Bryan Haig, Real Product, Income, and Relative Prices in Australia and the United Kingdom (Canberra, 1968).

  The price shocks of the 1970s are the subject of John M. Blair, The Control of Oil (New York, 1976); also interesting is Ali D. Johany, The Myth of the OPEC Cartel: The Role of Saudi Arabia (Dhahran, Saudi Arabia, University of Petroleum and Minerals, 1980).

  On the new inflacion, see Gardiner Means, “Simultaneous Inflation and Unemployment,” in Means et al., The Roots of Inflation, (New York, 1975) 19–27; also the many works of Robert Heilbroner; W. David Slawson, The New Inflation: The Collapse of Free Markets (Princeton, 1981); also idem, “Price Controls for a Peacetime Economy,” Harvard Law Review 84 (1971) 1090–1107; idem, “Fighting Stagflation with the Wrong Weapons,” Princeton Alumni Weekly, 23 Feb. 1983, 33–38.

  For other “new inflation” theories, see Robert Lekachman, Economists at Bay (New York, 1976); Dudley Jackson, H. A. Turner and Frank Wilkinson, Do Trade Unions Cause Inflation? (Cambridge, 1972); G. L. Bach, The New Inflation: Causes, Effects, Cures (Providence, R.I., 1973).

  On economic policy and attempts to control inflation see Leonardo Leiderman and Lars E. O. Svensson, eds., Inflation Targets (London, 1995), a survey of policies and outcomes in nine nations. On the United States, a survey is Richard H. Timberlake, Monetary Policy in the United States; An Intellectual and Institutional History (Chicago, 1993). Two journalistic accounts include William Greider, Secrets of the Temple; How the Federal Reserve Runs the Country (New York, 1987) and Maxwell Newton, The Fed (New York, 1983).

  For discussion of stagflation, see Alex McLeod, The Fearsome Dilemma: Simultaneous Inflation and Unemployment (Lanham, Md., 1984).

  The attitudes of economists are discussed in Howard Ellis, German Monetary Theory, 1905–1933 (Cambridge, 1934); John Kenneth Galbraith, Economics in Perspective (Boston, 1987); Lester C. Thurow, The Zero Sum Society (New York, 1981).

  On prices and speculators in this period, see John A. Jenkins, “The Hunt Brothers: Battling a Billion Dollar Debt,” New York Times Magazine, 27 Sept. 1987.

  On the cultural and social context of inflation, see Alejandro Conde Lopez, Socio-economia de la inflation . . . (Madrid, 1973). The impact of inflation upon the youth culture of this era may be observed in Jonathon [sic] Green, The Book of Rock Quotes (New York, 1982); other discussions include George Katona, “The Psychology of Inflation”; David J. Webber,” . . . a Political Theory of Inflation”; Arthur J. Vidich, “Social and Political Consequences of inflation . . . “; Edwin T. Harwood, “Toward a Sociology of Inflation”; Beth T. Niemi and Cynthia Lloyd, “Inflation and female Labor Force Participation”; Wilhelmina A. Leigh, “The Impact of Inflation upon Homeownership . . . ”; Bettina Berch, “Inflation of Housework”; and Donald C. Snyder and Bradley R. Schiller, “The Effect of Inflation on the Elderly”; all in Schmukler and Marcus, eds., Inflation through the Ages, 745–882.

  On inflation and unemployment, the Phillips curve first appeared in A. W. Phillips, “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957,” Economica 25 (1958) 183–299.

  On the distribution of wealth and income see A. B. Atkinson, Unequal Shares—Wealth in Britain (London, 1972); Peter Wiles, Distribution of Income: East and West (Amsterdam, 1974); Lee Soltow, “Long-Run Changes in British Income Inequality,” Economic History Review 21 (1968) 17–29; Jeffery G. Williamson and Peter H. Lindert, American Inequality: A Macro-economic History (New York, 1980); Jeffrey G. Williamson, Did British Capitalism Breed Inequality? (Boston, 1985); Y. S. Brenner, Hartmut Kaelbe and Mark Thomas, eds., Income Distribution in Historical Perspective (Cambridge, 1991), 35; A. L. Bowley, Wages in the United Kingdom in the Nineteenth Century (Cambridge, 1900); idem, Wages and Income in the United Kingdom since 1860 (Cambridge, 1937).

  A very lively book might be written on attempts to predict price movements through the past century, from Samuel Benner, Benner’s Prophecies of Future Ups and Downs in Prices; What Years to Make Money on Pig-Iron, Hogs, Corn and Provisions (Cincinnati, 1876) to Ravi Batra, The Great Depression of 1990; Why It’s Got to Happen—How to Protect Yourself (New York, 1985, 1987).

  On the decline of inflation in the 1990s, leading works include Roger Bootle, The Death of Inflation: Surviving and Thriving in the Zero Era (London, 1996); Lester C. Thurow, The Future of Capitalism: How Today’s Economic Forces Shape Tomorrow’s World (New York, 1996).

  ACKNOWLEDGMENTS

  This book began nearly forty years ago at The Johns Hopkins University, where I studied economic history with Frederic Chapin Lane. Fred, as I later came to know him, was a scholar of the old school. His special field was the Venetian economy during the late Middle Ages and the Renaissance. Mine was (and is) American history, but I took a graduate course with him and found myself deeply drawn to the example of his scholarship. One course led to another, and then to a docto
ral field under his direction on the economic and social history of Florence and Venice in the fifteenth century.

  Those who knew Frederic Lane will understand how it happened. He never attracted large numbers of students or reached a broad public, but he was a gifted teacher and a truly great scholar. Later he would be elected president of the American Historical Association as a testament of esteem by his colleagues.

  Fred is now in his grave, but he is still a living presence in my world. I can see him in my mind’s eye as I write these words—a tall, lean New England Yankee with a laconic manner, a long leathery face deeply seamed by his many years, and a thick mustache that bristled dangerously whenever I said something that he thought more than ordinarily obtuse. Fred’s words were few. His manner was abrupt. He demanded a standard of performance that I had never met before, and trained his students in an old-fashioned way that has nearly vanished from my profession.

  Fred introduced me to the old historical sciences that are nearly forgotten in America today: paleography, spaghistics, numismatics and diplomatics in the eighteenth-century sense. As a matter of course, he insisted on a command of the languages that one needed to study the history of Venice in the quattrocento—a good many languages altogether. There were written tests, followed by oral examinations in his office. I vividly remember one of those occasions more than forty years ago. It was late in the afternoon. The heavy curtains were drawn against the sun, and the room seemed as dark as a cave when I first entered it. Fred showed me to a seat near his desk. On a bookcase nearby was a dusty model of an old Venetian galley. The sharp tip of her sinister prow seemed to be pointed like a dagger in my direction. Fred was oblivious to these sensations. He rummaged happily through piles of old manuscripts, drew out one incomprehensible sheet after another, and demanded a sight translation. Sometimes my failures seemed to gratify him more than my successes, but we persevered. Fred labored to correct my many errors, and slowly the sinister Venetian galley disappeared into the gathering shadows of the afternoon. As the last rays of the setting sun slanted through the drawn curtains, Fred’s mustache stopped bristling and began to twitch in a more hopeful way. Finally he looked up at me and said, “That will do, Fischer.” It was the nearest thing to a word of praise that I ever had from him. I went reeling into the twilight as he called after me, “next week, nostro and vostro accounts.”