The Great Wave by David Fischer

Dr Samuel Johnstone " That sir is the good of counting. It brings everything to a certainty which before floated in the mind indefinitely" p xvi Increase in silver coinage `./in Eng between 975 and 1010 caused price revolution of that time p263 Distinction between rises in prices that are caused by population increases ( which are OK) and money supply driven increase (which are theft). Medieval "money famine" eg.c11/c12. Growth of population and prosperity (velocity inc due to trade) leading to demand for a larger circulating medium ( ed : should this not simply result in a fall in prices relative to money and thus perhaps a demand for smaller notes/coins rather than an increase in volume) Price inflation : 1225-1345 aprox 0.5% pa ( p17) Throughout Western Europe. During the C13 much of Europe became more densely settled than it would be till C20 eg Lincoln fens Mainly initially due to population growth: increase in fertility rather than decrease in mortality,mostly due to woman marrying earlier and deciding to have more children (due to growing prosperity and optimism) Englands total silver supply was 300 tons (p24) . Louis 9th( 1214-70) ransom was 240 tons Silver coins minted in England grew from200,000 in 1210-18 to 500,000 in the 40s to over 1,000,000 in the 80s. Prices increased. Comodities were also used as money- peper ( not enough silver) and bills of exchange also grew in popularity. Coins were systematically debased.Geoffroi of Paris complained that Philip the Fair turned 60 into 20 and 90 into 30. The Venician ducat kept its gold content constant for over 500 years. Poor communications meant there was sometimes hunger in one village and plenty in the next .p32 When a medieval state debased its coinage the merchant used to go to another and have their silver recoined into another coinage. Forbidding exports didn't help p32 Monarchs tried to impose price controls with little success. Crop failures. Universal in 1315 - wheat up from 5 to 40 shillings After 1294, warfare increased significantly p38. A lot of public spending went on wars. C14 great miseries , pagues and rebellions (even in Venice !) . A time of catastrophe. Civil wars - Holy Roman empire : Guelfs and Guibbelines. Collapse of Medieval civilisation. "forms of status and obligation were altered in fundamental ways"- "commutations of labour service and the emancipation of serfs" Real wages more than doubled. Peasants enlarged their holding in Eng in the C15. Prosperity returned. C16 population grew. C16 prices of grain went up 4 times , rents by 9 times and wages doubled. Rents and lands went up greatly Government debt also increased greatly mostly to fund wars Speculation was done by governments as well as individuals (including the Tsar) During the last quarter of C16 , Europe had the same combination of rising prices (by now due to monetary inflation) and falling opportunities ( caused by regulation) that was to be called stagflation in the C20. P91 The collapse came in 1610- number of ships passing the Danish sound peaked in 1600,total tonnage through Seville peaked in 1610 then fell sharply and continued falling for many decades. Customs duties in Venice and Marseille declined sharply after 1618. In England. Italy and Spain wool exports peaked in 1610-1620 then declined p96 Even the prosperous low countries an exception to many C17 trends, were caught in economic collapse. Industrial production declining there after 1620 In early c17 armies were at their greatest since Roman times Major revolutions in 1640 in Catalonia and Portugal when Spain attempted higher taxes, same in England, same with the Frondes ( 1648- 1654)- fiscal disputes. In Sicilly in 1647- "long live the King and down with taxes" p100 The Netherlands coup d'etat was bloodless in 1650 p101 Equilibrium of the Enlightenment : 1660- 1720 Price of grain stopped rising , fell sharply then attempted to find a new level Wages rose, rents and interest fell, distribution of income became more equal Bad times for the elite , good times for the ordinary peoples Quanitity of gold and silver doubled or trebled during the period but cost of living didn't go up. ( must have been productivity increases (ie without MS inc the prices would have gone down)) Dutch guilders, British guineas and Venician ducats preserved their value during the period ( presumably rising against the frank - ed ) Populations ceased rising and started to fall which affected prices.ie they WOULD have fallen without the MS increases due to lack of supply C18 France- prisoners held without a shade of legality, The Massachusetts farmers did without a system of hard money and used a system of mutual charge accounts that has been called book keeping barter. Population growth during this period due to increased fertility not decreased mortality. P125 Despite the population growth, prices of industrial products didn't go up because it was far easier to change their supply. This trend eventually led to the Agricultural Revolution( first becomoing more intensive and then more productive) Heavy wartime borrowings had a big effect on interest rates in these early capital markets 1720 on there was another price revolution during which the landowners did well, real wages fell from 1730 to 1800 ,p132, BUT this didn't have the starvation effects of earlier as people's per capital incomes had risen and there were less people living on the edge., also poor relief-but this Speenhamland system also pushed prices of grain higher. It was the cost of wars that often led to inflation. Peasant justified complaints : feudal dues, taxation, lord's monopolies of ovens, Peasants not quite justified: money lenders, high rents, 1790-1815- inflation rates much higher than previously -1.7% per year Britain came off the goold standard during the war "Every era of military glory is an agony for the ordinary people"p 153 GB vs France actively blockaded each other and prices soared, by 1812 half of Britian was on poor relief, US trade was also severly disrupted. New equilibrium didn't arrive till 1820 There was no sustained inflation in Britain from 1820 to 1896 p 157 German free trade zone 1819 start-> 1844 whole of Germ Real estate values follow closely the price of grain "After 1850 wealth and income tended to become more equal" p166 (GW) In the c19 although population went up greatly, prices didn't. Supply had finally become flexible enough to meet demand. Real growth rates in the 1900s were double what they had been before Up to 1820 in the US 0.6% per annum, after 1.6% pa In the US annual fluctuations in money supply and prices tended to be closely correlated p169 Large changes in MS created changes in price levels that were realtively small compared to what the same change would have done historically ( productivity greater) Major declijnes in crime(12 to 4 Lond )during this period, also major declines in alcohol consumption( 7.1 to 2) in the US and of illigitimacy in UK Although no major wars, Britian fought 230 odd wars for colonies: Boer, Mauri, Sikh,Sudan, Burmah, Periods of rising inflation tend to be ones of rising inequality ( falling wages and rising land and food prices ), periods of stable prices , rising wages, falling rents tend to be equalising. The number of German marks in circulation rose from 5807 trillion in 1922 t0 202 trillion,trillion .ie 1 to 1/4 trillion , the price index rose to 1.42 trillion times its 1913 level. In the 1930s 2/3rds of GB wealth held by 1%, 1/3rd by 0.1% France in depression expanded money supply by 100% from 1935-39 In 1950s inflation was slow then from 62 it greatly increased, globally.. Unemployment was at record lows- 4% in Italy, 2% in UK, 1% in Germany and Switzerland Author puts this down to rises in agregate demand (due to population increase ?) claiming that the increase in supply could not keep up with the increase in demand. In1966 US M1 was brought to a complete hault. The cost of rent and real estate rose 6 fold ( 3 fold inflation ) between 1960 and 1992. Prime real estate 10 fold.( more people becoming able to afford it ) Reagan often ignored his advisers and refused to raise taxes. Public debt ht $1 trillion, personal debt $2 trillion and corporate debt $3 trillion Price equilibrium is highly correlated with low crime and the converse is true In price movements food and fuel always go up first then manufactures The crisis of the C14 did much to end villainage and turn societies based on conquest to ones based on orders and estates. Purely "monetary model does not explain price differentials"- doesnt it ? nothing in monetarism to say everyone gets the new money at the same time 38 of the 40 countries that had inflation above 15% 1962-73 abolished democratic institutions In mid 80s poorest 20% in W Germany gets 13% of household income In US poorest 20% get 6%