The Great Wave: Price Revolutions and the Rhythm of History
By David Hackett Fischer
Oxford University Press, 536 pp., $30
A history of prices sounds as if it would be as dull as - well, as a history of prices.
But surprisingly, David Hackett Fischer's book "The Great Wave: Price Revolutions and the Rhythm of History" isn't boring. Perhaps three factors account for the readability of this book.
First, it is written in lively English. Sentences are on average short. Fischer has a knack for selecting fascinating historical facts and anecdotes. In general, Fischer, an economist at Brandeis University in Waltham, Mass., avoids the fog that obscures much academic writing.
Second, Fischer looks at the history of Europe since the medieval age, and at American history, from an economic standpoint. Many histories have been written with an emphasis on politics and power, culture and personalities. Fischer's history adds some balance by its concentration on the influence of economic trends on historical events, from war and revolution to industrialization.
"The history of prices is a history of change," Fischer writes, hinting at the influence of prices on history, and vice versa.
Third, Fischer has a thesis. It is that inflation in the past eight centuries has happened in four great waves of rising prices. The first occurred from the 12th to the early 14th century. The second began in the 15th century and ended in the mid-17th.
The third wave started about 1730 and reached its climax in the French Revolution and Napoleonic wars. The fourth wave began in 1896 and has continued since, with a short intermission in some nations during the 1920s and early 1930s.
All these waves started without much notice, but resulted in falling real wages, rising rents and other returns to capital, and growing gaps between rich and poor.
Each involved rising populations and increasing instability. They ended in terrible years full of social disorder, political turmoil, economic collapse, and disasters that shrank the population (starvation in the two earlier waves, plagues, and wars).
These crises were followed by long periods of comparative equilibrium: the Renaissance, the Enlightenment, and the Victorian era. They were times when prices fell and then fluctuated some, wages rose, and economic inequalities diminished.
"The author has found that price-revolutions in general are (with some exceptions) entirely unknown to most economists, political leaders, social planners, business executives, and individual investors, even as they struggle to deal with one price-revolution in particular," Fischer writes.
"This collective amnesia 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 writes.
The actual text is 258 pages, with many pages taken up by dozens of charts and several maps. And the appendixes, notes, bibliography (with publications written in several languages cited), and index extend another 278 pages.
Fischer advocates that leaders should think "in larger terms about the long run." He insists that the United States should put its fiscal house "in order" so that government can use both fiscal and monetary policies to influence the economy.
Finally, Fischer suggests that expanded educational investment would help people to acquire more marketable skills and higher-paying jobs, reducing the dangerous trend toward inequality in income and wealth.
* David R. Francis is senior economics correspondent for the Monitor.