The Price Revolution Reconsidered

Abstract

tiJntil a few years ago historians of the sixteenth and seventeenth centuries knew that one of the major phenomena of their period was a secular decline in the value of money which was so general and so marked as to justify the title 'the Price Revolution'. They knew, further, that this fall in the value of money was very largely caused by an influx of silver from the Spanish colonial acquisitions in the New World to Europe. They also believed, though with a shade more reservation, that these monetary changes were causally linked, through a process of 'profit inflation', with the alleged growth of capitalist enterprises in this period. All of this knowledge they owed, in large part, to the untiring labour and great scholarship of two men, the German Wiebe and the American Hamilton. Some historians are still satisfied with this 'orthodox' interpretation of the sixteenth and seventeenth centuries, but others have recently been assailed by doubts as to its validity. These doubts have become implanted in their minds chiefly because of the apparent implications of recent work, which has included the re-working of some of the statistical information on prices, seeming to call for new interpretations. A few historians may have been, and more ought to have been, influenced also by developments in economic theory which have thrown into some degree of disrepute the theoretical equipment used to construct the orthodox interpretation of these events. The chief aim of the present paper is to offer some thoughts on a number of matters, some of an empirical and some of a theoretical character, which are related at one point or another to the major issues of the debate. The comments offered are made from a standpoint which is on the whole more friendly to the new than to the orthodox interpretation of the so-called 'Price Revolution'; but at the same time the distinctive plea of the paper is for a recognition of the extent to which our understanding of the whole problem is still shrouded in doubt and obscurity, and thus, of the present need for moderation and tentativeness in framing hypotheses as to what happened, why, and with what consequences. It was not the wish of the author to summarize the present state of the debate a task which has already been attempted, with varying degrees of success, by several writers 1 but to give shape and structure to the paper it seemed necessary somehow to thread together the various rather disparate matters on which it was intended to comment. The obvious method of doing