The Money Changer and His Wife by Quentin Matsys, 1514
Author	David Hackett Fischer
Cover artist	Quentin Matsys
Country	United States of America
Language	en
Subject	Prices -- History. Business cycles -- History. Economic history.
Publisher	Oxford University Press
Publication date	1996
Pages	552
ISBN	978-0195053777
OCLC	33947935

The Great Wave: Price Revolutions and the Rhythm of History is a scholarly work by historian David Hackett Fischer, published 1996 by Oxford University Press. Hackett Fischer identified three complete monetary waves in European history, each consisting of a price revolution, featuring high inflation, followed by a war crisis, followed by a new equilibrium.^[1]p4 A fourth wave began, says Fischer, with the persistent monetary inflation of the 20th century.^p182

First wave

Fischer says this began with the medieval price revolution, 1180-1350. There followed crisis in the 14th and 15th centuries, featuring the Black Death and Hundred Years' War. Then equilibrium during the early Renaissance, 1400-1470.^p36-60

Second wave

This began with the “price revolution of the 16th century”, in fact lasting from about 1470-1590.^p91 Crisis followed; depression, famine, the Thirty Years' War (1618–1648), English Civil War, Dutch Revolt and other conflicts.^p98

According to Fischer the Enlightenment equilibrium which followed lasted from 1660-1730.^p102

Third wave

The price revolution of the 18th century began about 1729.^p117 Commodity prices rose in England (sic), France and the United States (sic!).^p120 large population increases occurred in most of Europe.^p124 Wage rates failed to keep pace with grain price rises, and wealth inequality increased.^p138 A rising spirit of rebellion led to a “revolutionary crisis”, 1789-1820.^p141 The French Revolution was followed by the Napoleonic wars and Latin American wars of independence. Stability was regained in the “Victorian equilibrium”, 1820-96. Consumer prices fell in England (sic).^p158 There were revolutions in transportation, agriculture, industry and commerce.^p168 But by the end of this era, young Englishmen were “bankrupt, bored and bloody-minded… the dark clouds began to gather.”^p164

Fourth wave

Fischer identifies a further “price revolution” in the 20th century, by which time there were no new lands left to explore or colonise. The German hyperinflation of 1923 and the Great depression of 1929 were followed by accelerating worldwide inflation after 1962.^p203 Though inflation had ended by 1996,^p233 Fischer speculated (1996) that “the great wave of the 20th century (approaches) its climax” and that “A major war in the Middle East or eastern Europe or elsewhere could reignite inflation.”^p234

Conclusions

Fischer observed that these movements were not cycles but waves, with no fixed periodicity. Each wave had six common features. Chronologically, these were; 1), prolonged prosperity, 2) political disorder, 3) inflation spiral, 4) spiritual crisis, 5) revolution, deflation, 6) long era of equilibrium.^p237

Limitations of the theory

Fischer predicted (1996) that “the price revolution of the 20th century has yet to reach its climax”.^p240 Recent works by Steven Pinker^[2] and Joshua S Goldstein^[3] suggest that war and violence are decreasing, a trend which seems at odds with some of Fisher”s conclusions, which are now proved correct. Fischer did remind his readers that volatility would occur and increase

Paul Krugman^[4] offers the comment that “most big-think books about history offer only strained analogies mixed with pretentious statements of the obvious.” Thomas J Archdeacon^[5] calls the theory “vivid”, “shrewd” and “strongly persuasive”, but suspects it is “blood in the water for academic sharks hunting outsiders venturing into their territory.” The argument that the world is heading for a crisis “has the vagueness of analogy.” In the wake of the disruption of the COVID-19 pandemic over 2020-21, Fisher's argument that the west is heading for a crisis appears more convincing.

In a long and detailed review, John H Munro of Toronto university ^[6] deplores the absence of mathematical modeling; the theory is “rather too neat” for him to accept.

Finally, the book has a Eurocentric or western bias, with no data at all about the significant Asian economies.^[7]