Hi all,
I am looking for an Austrian analysis of the so-called "price revolution" of the sixteenth and seventeenth centuries. I've searched the web but haven't found anything on it. Did Rothbard write on this?
The modern explanations are what we would expect - population growth, "revolutionary" credit expansion, econometrics and the velocity of money, etc...but I am unable to find any Austrian analysis anywhere and the wikipedia article on this is horrendous.
Any help would be greatly appreciated.
Thanks
Hulsmann writes in his Ethics, that the money stock (silver and gold imported from the New World) increased depending on various estimates by 50 to 500% over a period of 150 years (an average growth rate of the money supply somewhere between 0.3 and 3.3 percent per annum), Chapter 4, p.73-74. (He notes later, that a major part of the Spanish imports were re-exported to the Far East and to the Middle East - but it's always a question of where new money arrives first. :) )
A different estimate I heard of, but have to check the source (Gaettens I think), is that the prices of land measured in silver increased over the two centuries twentyfold. Spread out over the 200 years it is also not dramatic as today's inflation, but noticeable.
For some of those "revolutionary credit expansions", check here. Hope this helps you as a starting point, but some imports of precious metals coupled with inflations in several large parts of Europe could just do the trick.
Mises Wiki | Economic Resources and Books (search engine)
Thanks a bunch! I'll check out the links.
Ad estimate:
Gaettens in his Geschichte der Inflationen, Ch. 5 p. 105+123 (link, Google Books has a searchable version, but can't find a complete one, duh) mentions this increase. Luther has reportedly complained, that instead of getting by with 100 Gulden, 200 were needed. J. Bodin was the first to recognize the inflow of silver as a reason for the price increases, and Law agrees with that later on:
"In France it has been observ'd, that about 200 years ago, the same Land was in 30 years woth double the Money it was worth before. So Land worth a 100 lib. anno 1500, was worth 200 lib. anno 1530, 400 lib. anno 1560, and so on, till within these 50 or 60 years it has continued near the same value.
In England 20 times the Quantity of Money is given to Goods, than was given 200 years ago. In these Countries 'tis thought Goods have rose; but Goods have kept their value, 'tis Money that has fallen."
The Spanish scholastics were writing about the reasons of rising prices. Some information on this can be found in the book The School of Salamanca, by Marjorie Grice-Hutchinson. See especially Chapter I, The Money Market.Grice-Hutchinson writes, on p. 52: "In 1556 Azpilcueta Navarro produced the first clear statement that the high cost of living was a result of the import of treasure (Text III, p. 95). He thus preceded Bodin by twelve years."
soe:The Spanish scholastics were writing about the reasons of rising prices. Some information on this can be found in the book The School of Salamanca, by Marjorie Grice-Hutchinson. See especially Chapter I, The Money Market. Grice-Hutchinson writes, on p. 52: "In 1556 Azpilcueta Navarro produced the first clear statement that the high cost of living was a result of the import of treasure (Text III, p. 95). He thus preceded Bodin by twelve years."
Grice-Hutchinson writes, on p. 52: "In 1556 Azpilcueta Navarro produced the first clear statement that the high cost of living was a result of the import of treasure (Text III, p. 95). He thus preceded Bodin by twelve years."
Now that is assistance! I have updated my pages, thank you.
I just read an article about Copernicus from Rothbard (http://mises.org/daily/4071). Rothbard writes that "Copernicus also became the first person to set forth clearly the 'quantity theory of money', the theory that prices vary directly with the supply of money in the society. He did so 30 years before Azpilcueta Navarrus, and without the stimulus of an inflationary influx of specie from the New World to stimulate his thinking on the subject. [...] The supply of money, he pointed out, is the major determinant of prices."
soe:I just read an article about Copernicus from Rothbard (http://mises.org/daily/4071). Rothbard writes that "Copernicus also became the first person to set forth clearly the 'quantity theory of money', the theory that prices vary directly with the supply of money in the society. He did so 30 years before Azpilcueta Navarrus, and without the stimulus of an inflationary influx of specie from the New World to stimulate his thinking on the subject. [...] The supply of money, he pointed out, is the major determinant of prices."
To put it short, it was Copernicus, who developed the (basics of) the theory, while Navarro was the first to explain the "price revolution" specifically. Good point by all accounts!
For those interested, I've created a page on the Price revolution, and the related (preceding) Great Bullion Famine. Now it should be even easier to find.