Prices

DIAGRAM I on page 12 shows the course of wholesale prices during the nineteenth century. The long-cycle problem is apparent right away. The peaks of 1818 and 1873, the troughs of the late 1840s and the mid-1890s, are clear enough. It is the pattern in between which causes the trouble. We can create almost any trend we like to 1850, depending on the choice of dates; prices may be described as steady on the whole from 1821 to 1841 (treating 1818 as an aberration) or we may say they were falling from 1818 to 1833 and thereafter stable till the late 1840s. After 1852 there were two years of recovery from a deep slump in prices and then a remarkably steady plateau for almost two decades with a jump during the very powerful boom in 1872–3. Hardly a period of rising prices as the long-swing analysis postulates. Simply to look at the trough in 1852 and the peak in 1873 is certainly misleading. Even two of the most powerful advocates of the long-cycle analysis once wrote: ‘anyone who did not know these waves in advance might conclude that the trend of prices was not falling from 1823 to 1840 or rising during 1853–71’.1