Customer Reviews

The Great Wave: Price Revolutions and the Rhythm of History

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Americans seem to have a blind spot when it comes to history. We can't see the value of learning about the past, and applying its lessons to the present. We're arrogant enough with our vast wealth and power to believe that we invented everything first. Or we simply don't see the value of history, as a resource, as object lesson, as holding some answers to today's dilemmas.

Brandeis University professor David Hackett Fischer acknowledges this blind spot and takes the long view in "The Great Wave." Utilizing a very long telescope, one that sees back as far as the Dark Ages, Fischer investigates the history of price changes to expound on a fascinating theory that can possibly foretell nothing less than the future of the United States, whether we're headed for an era of greater prosperity, or a catastrophe like that of the Great Depression.

Fischer's long-view theme is similar to more popular and populist works that spring up like daffodils and last about as long: Toffler's "Fourth Wave" and "Future Shock" easily come to mind, and politicians have their favorite advocates of either the "future's so bright we got to wear shades" school of eternal optimism, or the "hunker down, boys, the Japanese / Germans / Latinos / big business / lower classes are coming over the walls" school.

The theory behind "The Great Wave," in contrast, is the real thing, backed by solid research, not the author's political leanings. By examining the prices people paid for goods throughout history, four "price revolutions" were identified, each followed by a long period when prices were relatively stable. The intensity and length of each revolution was different, lasting as short as 80 years, to as long as 180 years.

What provides the kick behind this notion is how this series of rising and fallings have had on the growth of society. In general, rising prices placed severe stresses on society at large. During the first three upticks (during the Medieval, 16th century and 18th century periods), bad weather added to the troubles by destroying harvests, leading to widespread starvation. The lower classes, squeezed between prices for basic foods they could no longer pay, as well as laws passed by the wealthy classes who wished to protect their investments, lead to catastrophes such as social revolution or a population-reducing plague. That would restabilize prices and, in general, give everybody a chance to catch their breath.

Once the shocks of the collapse have passed, the society finds that prices have stabilized, and the population at large begins to recover. When times are good, the population tends to increase. This places stresses on food and fuel, triggering inflation. Continued prosperity increases the cycle of growth and demand, and added to the troubles are the occasional wars, when ambitious people felt comfortable enough with the status quo to demand more of it.

This is a simplistic rendering in a review of what is actually a rather simple theory to understand in practice. Fischer tells the story of each wave, and the cause-and-effect patterns are so clear that it seems like one is reading the same story four times, with only the names of the players changed.

Fischer's book looks intimidating at first. Its 536 pages is studded with charts showing the fluctuation of prices throughout history. But Fischer devotes only 258 pages to an analysis of prices waves; the rest of the book is taken up with appendices and essays on side issues. And the 258 pages contains 105 charts, further reducing the amount of reading needed to grasp the main points.

Economics has been called the dismal science, but Fischer's work offers a cautionary story that is readily understandable and surprisingly compelling to the general reader. Where Fischer says we are on the next wave, I'll leave to those willing to make the effort. "The Great Wave" is well worth the journey.

Fischer's book takes in a long view of basic economic history. It covers the period from roughly 1200 AD to present, using data from England, Europe and the United States. The book sizes up what has taken place economically, socially, etc. and it discusses some basic relationships. A great contribution of the book is that it becomes apparent to the reader that long term effects are frequently completely invisible to people coping with present economic situations. For example, many well-intended fiscal policies are counter-productive or produce neutral effects for this very reason. Another great supporting contribution of the book is that Fischer is well aware of the various schools of economic thought. At many places in the text, he points out weaknesses of certain theories; in his appendix he summarizes by showing that no existing single theory fully explains actual historical events. Another great contribution is the appendix itself. It comprises half the book, and contains a massive bibliography, with further elaborations on social issues, crime, disease, divorce, contrasts in economic theories, wealth distribution, and more. Most of the references are of high scholarly quality. There are a few shortcomings in presentation, but these are details. For example, Fischer occasionally makes asides which would be more effective if they were concise summaries. Also, some of his graphs have peculiar scaling. The reader must exercise care in interpreting them. Nevertheless, ... Fischer's work is an excellent overview of economic dynamics, and is highly recommended for obtaining a well-rounded perspective.

Utilizing a very long telescope, one that sees back into the Dark Ages, Brandise University professor David Hackett Fischer investigates the history of price changes to expound on a fascinating theory that can possibly foretell nothing less than the future of the United States, whether we're headed for an era of greater prosperity, or a catastrophe like that of the Great Depression. By examining the prices people paid for goods throughout history, four price-revolutions, were identified, where inflation grew in intensity strong enough to destabilize society. After each crash came a long period of comparative price-equilibrium, when countries experienced growth in culture, such as during the Renaissance and the Enlightenment. Fischer's book looks intimidating: its 536 pages is studded with charts showing the flucturation of prices throughout history. But Fishcher devotes only 258 pages to an analysis of prices waves; the rest of the book is taken up with appendices and essays on side issues. And the 258 pages contains 105 charts, further reducing the amount of reading needed to grasp the main points. Fischer retells history during the four waves, and there, except for the occasional burst of economic jargon, the text is compelling, and the theory well worth considering. -- Bill Peschel

Economics is a sub-set of history, with exactly the predictive power of other forms of historiography, no more no less. When economics is morphed into an operating ideology, societies suffer. David Hackett Fischer is a historian, one of the most consistently interesting historians of the American Colonial and early Federal periods, and one of the few historians these days willing to stick his neck out and venture big hypotheses in answer to big questions. "The Great Wave" is such a risk-taking book, an attempt to correlate 'waves' in prices of basic necessities with huge social upheavals. Academic economists, and simple readers familiar with notions of economic cycles such as Kondratieff waves, have tended to treat this book with skepticism and disdain. Full-time historians likewise have looked askance at even the attempt to write such an out-sized study of virtually everything. I'm pleasantly surprised to discover that the general reading public, as reflected in amazon reviews, finds The Great Wave to be a worthwhile and thought-provoking book.

Fischer maintains that there have been four great waves of inflation, in the thirteenth, sixteenth, eightteenth, and twentieth centuries. The four waves "shared many qualities... All had the same movements of prices and price-relatives, falling real wages, rising returns to capital, and growing gaps between the rich and the poor. Each... developed increasing instability, and ended in a shattering crisis that combined social disorder, political upheaval, economic collapse, and demographic contraction." Well, friends, you'll have to read the book to find out where we are surfing on the fourth wave.

Unlike some reviewers, I find Fischer's writing style cumbersome and repetitious, and certainly NOT the main attraction of his work. Rather it's a lot like skiing through wet sticky slush when you expected to be telemarking. But long uncomfortable journeys often make the best tales, and difficult books often leave the best afterthoughts. The Great Wave is such a book. (Note that used hardcovers are available for very modest prices.)

Well written and detailed analysis of a recurring pattern the author has identified across the last 6 centuries. The book is quite thick, but most of it are bibliographical and reference notes (very detailed) and a lot of charts, so reading is easy and smooth.
The theory is well presented and clear to understand. Of course the conclusion cannot be definitive, as we are in the midst of the pattern and as usual patterns are easily recognizable only once they're complete. But the author does a good work of presenting the recurring and probable elements that would help identify what phase of the cycle (or wave) we are currently into. Please bear in mind that secular trends play out over many years although our consciousness tends to be stricken by shorter term events.
In any case, a very relevant book for current times...

Not just for economic or business geeks. One of the best history books I have read. My sister, a paralegal loved it as well. It ties historic events into patterns - and logic. Yes it has an economic basis but is just as much about human actions and societies. Fairly long, but so interesting and put together it reads like a novel.

Price history is interesting as demonstrated here. This book shows how the "good" historical periods that we learn about had long periods of low to no inflation. The "bad" times had tremendous inflation. Monetary inflation turns out to be a major determinant of human history.

I'm not sure Fischer got it completely right in terms of his long wave approach to explaining inflation. Hyperinflation tends to burn out quickly - usually within a few years. But this is a useful way to look at inflation. In each case, fuel went up first followed by food. Labor could not keep up during inflationary times, and the result was always bad such as war.

Fischer identifies 4 long waves. We're in the 4th wave now, which is predicted to climax in a violent hyperinflation associated with widespread suffering. The author also covers the various theories of inflation and does so in a far more comprehensive manner than I've seen elsewhere. Inflation it turns out is not as simple a phenomenon to understand as it's sometimes made out to be.

This is a remarkable book about price fluctuations of things, including food and precious metals over a millennium. True, veracity of prices over such a span of time can be questionable, but this book does not claim that. And all prices are relative. It researches the topic of prices by asking how much could a family afford to buy bread or egg, or how much silver equaled gold, etc. Price is all relative, and by studying the relative prices an entire history of price can be written as this book does. I'd read this book a long time ago. Part of the reason I'm writing this review now is because I'm currently reading another book called Smart Pricing Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability. I'm using this book as a reference while reading the latter.

One notion I got out of this book--rightly or wrongly--is a glimpse to human nature through analysis of prices of things, particularly the necessities. I came away that human nature all in all is fair. What really fluctuates prices are natural disasters, not human made calamities; not the world wars, crusades, or dare I say, terrorism; maybe spikes here and there but never enough to change an equilibrium for good. On the contrary, it's always been human endeavors that have put an end to the effects of natural disasters to create and re-create stability.

A question to also ponder is this: do humans cause natural disasters? It seems so for some. For example, what will the disaster in the Gulf of Mexico do to the prices of seafood? Will it be a mere temporary spike in overall prices, or a prolonged trend change? Will the economic problems be localized or global? How about plagues? Has any been caused by humans' neglect? Yet other disasters seem without human blame: earthquakes, tsunamis, or tornadoes. But what about global warming?

Almost every day reading the news headlines in 2007-2008, I see more confirmation of the Hackett Fisher's thesis. Runaway inflation led by energy prices, profiteering and hoarding of commodities, increasing gap between rich and poor, rising crime rates. These have all been seen in each great wave, each price revolution.

We're at the culmination of the fourth such wave in the last 800 years. Chaos, severe social dislocation, and war followed the previous three instances. Can we beat the odds this time?

I found that the theories proposed in this book which I bought on Amazon.com, gave me a much better understanding of the economic crisis we are in today. Based on historical data it does a masterful and entertaining job of explaining a complex group of behaviors that lead to economic collapse. His conclusions ring true today as did his analysis of history. The sad news is that we are repeating the same historical mistakes that have in the past lead to major economic and cultural crashes.

Ed Lilley, Harwich Port, MA