Great Wave

by Fischer, David Hackett;

  This scholarship on Kondratieff’s long cycles, for all its abundance, has a shallow empirical base. Many historians and economists continue to doubt the very existence of Kondratieff waves. Skepticism centers on the period from 1873 to 1893, for if the economic downturns in those years were no more severe than those of 1819, 1826, 1837, and 1859, then the fifty- (or sixty-) year Kondratieff pattern as such loses much of its salience and most of its shape. See S. B. Saul, The Myth of the Great Depression, 1873–1896 (London, 1896); and Solomos Solomou, “Kondratieff Waves in the World Economy, 1850–1913,” Journal of Economic History 46 (1986) 165–69.

  Another weakness appeared in the 1970s, when many Kondratieff-minded scholars predicted a “coming collapse of capitalism,” which stubbornly refused to come. See, e.g., Jay W. Forrester, “We’re Headed for Another Depression,” Fortune, 16 Jan. 1978; Geoffrey Barraclough, “The End of an Era,” New York Review of Books 21 (1974) 14–20; and Cesare Marchetti, “Recession 1983: Ten More Years to Go?” Technological Forecasting and Social Change 24 (1983) 331–42.

  Evidence for a Kondratieff pattern in earlier periods of history is even weaker than in the modern era. Kondratieff himself believed that his waves did not occur before 1790. Other scholars have claimed to find evidence of the same rhythm throughout the modern and even the medieval era, but here again the empirical evidence is very soft.

  My own judgment is that a fifty- or sixty-year cycle does in fact appear in many social indicators and has been confirmed by various statistical methods including business cycle analysis, trend deviation, moving averages, and spectral analysis, to name but a few. But this pattern is not substantively stronger than many other cyclical rhythms, and much weaker than the secular trend with which it is sometimes confused. Kondratieff’s “long wave” may be merely a multiple of generational “long swings,” which move round the secular trend and vary broadly in their timing and intensity from one swing to the next. Much of the energy devoted by American social scientists to the study of the Kondratieff wave has been misdirected. Their efforts might be more usefully applied to the examination of secular trends—which have a more solid foundation in historical fact, though less predictive power.

  Shorter cycles of thirty years and fifteen years also have been found in farm prices and harvest fluctuations by Beveridge, Goubert, and many recent writers on the world economy in the twentieth century. This pattern is often (but not always) associated with solar activity. It has not been rigorously tested and is not generally accepted by most economists or historians today. But it keeps being rediscovered in descriptive studies. See, e.g., Stanley Jevons, “The Solar Period and the Price of Corn,” in Investigations in Currency and Finance (London, 1884).

  Kuznets cycles or “long swings” of approximately twenty years have been much discussed by American economists, but this pattern has not been so interesting to European scholars or so visible in the history of their nations. See Simon Kuznets, Secular Movements in Production and Prices (Boston, 1930); idem, “Long Swings in the Growth of Population and Related Economic Variables,” Proceedings of the American Philosophical Society 102 (1958) 25–52; Arthur F. Burns, Production Trends in the United States since 1870 (New York, 1934); Moses Abramowitz, “Resource and Output Trends in the United States since 1870,” American Economic Review 46 (1956) 5–23; Brinley Thomas, Migration and Economic Growth (Cambridge, 1954); John C. Soper, “Myth and Reality in Economic Time Series: The Long Swing Revisited,” Southern Economic Journal 41 (1975) 570–79. This rhythm is sometimes thought to be demographic in its origin, but Friedman and Schwartz argue in Monetary Trends in the United States and United Kingdom (599-621) that long swings are episodic in their origin and monetary in their expression. Many economists agreed with them.

  On the other hand, the Labrousse cycle (or intercycle) of roughly ten or twelve years is much favored by European historians but rarely appears in American scholarship.

  Juglar cycles or trade cycles (seven to eight years) have been found by many scholars—by Goubert in Beauvais, Parenti in Tuscany, Spooner in Udine, Hauser in Paris. The classic work is Clément Juglar, Des crises commerciales et leur retour périodiques en France, en Angleterre et aux États-Unis (Paris, 1889); rpt. New York, 1967).

  Kitchin cycles or business cycles (3.5 years, or forty months) were first observed in the American economy during the nineteenth and twentieth centuries, and also in Europe during our own time. The classical text is Joseph Kitchin, “Cycles and Trends in Economic Factors,” Review of Economics and Statistics 5 (1923) 10–16. They are sometimes called “inventory cycles” and are thought to rise from the structure of modern business enterprise. Several historians have also reported them in price data as early as the fifteenth century, and Pierre Chaunu has discovered them in Seville’s transatlantic trade.

  For general discussions of business cycles, see Wesley C. Mitchell, Business Cycles (New York, 1927); Arthur F. Burns and Wesley C. Mitchell, Measuring Business Cycles (New York, 1946); Joseph A. Schumpeter, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process (New York, 1939); Geoffrey H. Moore, The Cyclical Behavior of Prices (Washington, 1971). Historians will find a rapport with E. R. Dewey and E. F. Dakin, Cycles: The Science of Prediction (New York, 1949), which argues that cyclical rhythms are themselves variable through time and space—a conclusion that is certainly correct.

  For problems of method, an excellent work is James D. Hamilton, Time Series Analysis (Princeton, 1994). Also useful are T. W. Anderson, The Statistical Analysis of Time Series (New York, 1971), and Nathaniel J. Mass, Economic Cycles: An Analysis of Underlying Causes (Cambridge, Mass., 1975).

  Movements of Wages, Rents and Interest

  These various cyclical and linear interpretations may also be found in the general literature on wages, interest, rents, and wealth distribution. The classic works include François Simiand, Le salaire; L’évolution sociale et la monnaie (3 vols., Paris, 1932); J. R. Hicks, The Theory of Wages (London, 1932); J. Kuczynski, Die Geschichte der Lage der Arbeiter in Deutschland von 1800 bis in die Gegenwart (Berlin, 3d ed., 1947); idem, Die Geschichte der Lage der Arbeiter unter dem Kapitalismus (Berlin, 1960–1963); P. Wolff and F. Mauro, Histoire générale du travail (Paris, 1960). There is no general history of wages in English, but much information appears in Stanley Lebergott, Manpower in Economic Growth (New York, 1964). Many specialized studies are listed below.

  On the history of interest, the standard work is Sidney Homer, A History of Interest Rates (2d ed., New Brunswick, 1977). A classic treatise is Knut Wicksell, Interest and Prices (London, 1936).

  For the history of rent, see G. Postel-Vinay, La rente foncière dans le capitalisme agricole (Paris, 1974); and J. Jacquart, “La rente foncière, indice conjoncturel?” Revue Historique 253 (1975) 355–76. There is no general history of rent or land prices for Britain or the United States—a major gap in the literature. Many specialized studies are listed below.

  For patterns of wealth and income distribution over the long run in the United States, see Jeffrey H. Williamson and Peter H. Lindert, American Inequality: A Macroeconomic History (New York, 1980), with a good bibliography; and Lee Soltow, Men and Wealth in the United States, 1850–1870 (New Haven, 1975).

  Studies of Britain include Jeffrey G. Williamson, Did British Capitalism Breed Inequality? (Boston, 1985), which cites many other studies by the same author; E. H. Phelps-Brown, The Inequality of Pay (Berkeley, 1977); A. J. Harrison and A. B. Atkinson, The Distribution of Personal Wealth in Britain (Cambridge, 1978); and A. B. Atkinson, The Economics of Inequality (Oxford, 1975).

  For other nations, Y. S. Brenner, Hartmut Kaelbe, and Mark Thomas, Income Distribution in Historical Perspective (Cambridge, 1991) includes essays on Australia, Austria, Belgium, Germany, and Sweden, with a full list of references. M. Schnitzer, Income Distribution: A Comparative Study (New York, 1974) looks at the United States, Germany, Sweden, and Japan. Also helpful are many studies by Harold Lydall, notably
A Theory of Income Distribution (Oxford, 1979); and J. Söderberg, “Trends in Inequality in Sweden, 1700–1914,” Historical Social Research 21 (1987) 58–78.

  Money

  On the history of money the literature is even larger than on prices, and of course strongly monetarist in its interpretation. The leading bibliography is Philip Grierson, Bibliographie numismatique (2d ed., Brussels, 1979). The standard overviews are Philip Grierson, Numismatics (Oxford, 1975) and John Porteus, Coins in History (London, 1969). A useful survey is Glyn Davies, A History of Money from Ancient Times to the Present Day (Cardiff, 1994).

  On the history of precious metals, see Adon A. Gordus and Jeanne P. Gordus, “Potosí Silver and Coinage of Early Modern Europe,” in Hermann Kellenbenz, ed., Precious metals in the Age of Expansion: Papers of the Fourteenth International Congress of the Historical Sciences (Stuttgart, 1981) 225–242; and Emmanuel Le Roy Ladurie et al., “Sur les traces de ‘argent du Potosí,’” Annales E.S.C. (1990) 483–505.

  For medieval numismatics, the best beginning is Peter Spufford, Money and Its Use in Medieval Europe (Cambridge, 1986), and idem, “Coinage and Currency,” in Cambridge Economic History of Europe, (2d ed., Cambridge, 1987), 2:1788–863, both with appended tables on medieval money and excellent bibliographies. Peter Spufford, with the assistance of Wendy Wilkinson and Sarah Tolley, has also compiled a very useful Handbook of Medieval Exchange (London, 1986), with a full introduction on money and exchange, a listing of exchange rates by European region, and an excellent bibliography.

  For the Renaissance and the modern era, an outstanding work is Frederic C. Lane and Reinhold C. Mueller, Money and Banking in Medieval and Renaissance Venice, vol. I, Coins and Moneys of Account (Baltimore, 1985), a work broader than its title, with a full bibliography. Other major studies of high quality include Peter Spufford, Monetary Problems and Policies in the Burgundian Netherlands, 1433–1496 (Leiden, 1970); Frank C. Spooner, The International Economy and Monetary Movements in France, 1493–1725 (Cambridge, 1972); John Day, ed., Études d’histoire monétaire XIIe-XIXe siècles (Lille, 1984); Carlo M. Cipolla, Money, Prices, and Civilization in the Mediterranean World: Fifth to Seventeenth Century (Princeton, 1956); idem, La moneta a Firenze nel cinquecento (Bologna, 1987); B. H. Michell, “The Impact of Sudden Accessions of Treasure upon Prices and Real Wages,” Canadian Journal of Economics and Social Science 12 (1946); J. L. Laughlin, Money, Credit, and Prices (Chicago, 1951); John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill, 1978), with bibliographical notes; and many works of Milton Friedman and Anna J. Schwartz, cited below. A handbook on money and exchange in Europe during the modern period is coming from Frank Spooner.

  On particular currencies, there is R. Sédillot, Le franc: histoire d’une monnaie des origines à nos jours (Paris, 1953); A. Blanchet and A. Dieudonné, Manuel de numismatique française (4 vols., Paris, 1912–36); Albert Feaveryear, The Pound Sterling: A History of English Money (2d ed. rev., Oxford, 1963); W. C. Mitchell, A History of the Greenbacks (Chicago, 1903); Octavio Gil Farres, Historia de la moneda española (2d ed., Madrid, 1976); Kirsten Bendixen, Denmark’s Money (Copenhagen, 1967); A. Lohr, Osterreichische Geldgeschichte (Vienna, 1946); I. G. Spasskij, The Russian Monetary System (3d ed., Leningrad, 1962; Eng., Amsterdam, 1967).

  On the problem of money of account, see Marc Bloch, “La monnaie de compte,” Annales d’Histoire Économique et Sociale (1935); idem, “Le problème de la monnaie de compte,” ibid. (1938); Luigi Einaudi, “The Theory of Imaginary Money from Charlemagne to the French Revolution,” in F. C. Lane and J. C. Riemersma, eds., Enterprise and Secular Change (Homewood, Ill., 1953) 229–61. Good discussions appear in Lane and Mueller and McCusker above.

  A major work on “bookkeeping barter,” of a more general importance than its title implies, is W. T. Baxter, The House of Hancock: Business in Boston, 1724–1775 (Cambridge, 1945).

  Population

  Indispensable to this inquiry are general works on historical demography, which tend to explain price movements as the result of changes in population growth. Leading works include D. V. Glass and D. E. C. Eversley, Population in History: Essays in Historical Demography (London, 1965; rpt. 1974); W. R. Lee, ed., European Demography and Economic Growth (London, 1979); R. D. Lee, ed., Population Patterns in the Past (New York, 1977); R. J. Mols, Introduction à la demographie historique des villes d’Europe du XIVe au XVIIIe siècle (3 vols., Gembloux, 1954–56); and Michael W. Flinn, The European Demographic System, 1500–1820 (Baltimore, 1981) with an excellent bibliography of more than seven hundred works in demographic history.

  National studies of general interest include J. C. Russell, British Medieval Population (Albuquerque, 1948); E. A. Wrigley and R. S. Schofield, The Population History of England, 1541–1871 (Cambridge, 1981), an indispensable work; Julius Beloch, Bevölkerungsgeschichte Italiens (3 vols., Berlin, 1937–61); and Maris A. Vinovskis, ed., Studies in American Historical Demography (New York, 1979), with a bibliography (pp. 21–25).

  On methods and models of demographic analysis, the best introduction is still George W. Barclay, Techniques of Population Analysis (New York, 1958), now unhappily out of print; also Nathan Keyfitz and Wilhelm Flieger, Population: Facts and Methods of Demography (San Francisco, 1971); and Alfred Sauvy, General Theory of Population (1966; London, 1969).

  Climate and Environment

  Also important for the study of prices is the literature on climate and ecological change. Here the leading works are Robert I. Rotberg and Theodore K. Rabb, eds., Climate and History: Studies in Interdisciplinary History (Princeton, 1981); H. H. Lamb, Climate: Past, Present, and Future (2 vols., New York, 1972, 1977); idem, Climate, History, and the Modern World (London, 1982); T. M. L. Wigley, M. J. Ingram, and G. Farmer, eds., Climate and History: Studies in Past Climates and Their Impact on Man (Cambridge, 1981); Emmanuel Le Roy Ladurie, Times of Feast, Times of Famine: A History of Climate since the Year 1000 (1967; New York, 1971); Reid Bryson and Thomas J. Murray, Climates of Hunger (Madison, 1977); A. S. Goudie, Environmental Change (Oxford, 1977); Patrick Richard Galloway, Population, Prices, and Weather in Preindustrial Europe (Berkeley, 1987); W. Dansgaard, “One Thousand Centuries of Climatic Record from Camp Century on the Greenland Ice Sheet,” Science 166 (1969) 377–81; Christian Pfister, “Fluctuations climatiques et prix céréaliers en Europe du XVIe au XXe siècle,” Annales E.S.C. 43 (1988) 25–53.

  On the historical geography of price movements, the classic work is P. Hall, ed., Von Thünen’s Isolated State: An English Edition of De Isolierte Staat (Oxford, 1966). Von Thünen rings continue to resonate in a large literature of economic geography and are sometimes observed by a study of prices; see J. R. Peet, “The Spatial Expansion of Commercial Agriculture in the Nineteenth Century: A Von Thünen Interpretation,” Economic Geography 45 (1969) 283–300.

  Economic Growth

  The central problem in economic historiography during the 1960s and 1970s was to describe and explain processes of economic growth. A large literature was created, which in the United States showed little interest in prices except as they impinged upon the measurement of national product. Nevertheless, this literature bears upon price history in many ways. Among general works, a classic is Simon Kuznets, Modern Economic Growth: Rate, Structure, and Spread (New Haven, 1966), idem, The Economic Growth of Nations (Cambridge, 1971); also E. F. Denison, Why Growth Rates Differ (Washington, 1967).