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Abstract
This article uses long-term series of real prices for various goods and services to analyse the evolution of the knowledge economy before the Industrial Revolution by focusing on Sweden in comparison with other European countries. During the early modern period, the relative price of knowledge-intensive goods and services, such as iron, paper, salt, sea transports and silver, decreased relative to a Consumer Price Index. The increased productivity levels of these goods and services were caused by increased division of labour and accelerated diffusion of knowledge. However, the real price of foodstuff tended to increase, implying that living standards declined with increased population. Early modern Western Europe acquired a peculiar price structure, characterized by low prices of industrial goods relative to the price of food. Only with the advent of industrial society could the knowledge economy escape the Malthusian entrapment.
Acknowledgements
Our research has been financed by the Swedish Research Council, and by the Jan Wallander and Tom Hedelius foundation. We also want to thank Bo Franzén, Astrid Kander, and Jonas Ljungberg for commenting on our study on Swedish price history, and Cordelia Hess for help with the accounts of the German Order. Two anonymous referees have provided useful comments.
Notes
1. P. Lindert, Preliminary Global Price Comparisons, 1500–1870. Conference ‘Towards a Global History of Prices and Wages’, Utrecht 19–21 August 2004. http://www.iisg.nl/hpw/conference.html.
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9. The Clark database also provides prices of manufactured iron, the relative price of which rose in the fourteenth century. After peaking in the 1380s, a secular decline set in, lasting up to 1700. Gregory Clark, England_1209–1914 (Clark).xls. URL: http://gpih.ucdavis.edu/.
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14. Coleman, The British Paper Industry, 4–5, 26, and 36.
15. Hunter, Papermaking, 241; Coleman, The British Paper Industry, 29–39.
16. A similar downward trend in the real price of paper can be seen in Navarre. See Earl J. Hamilton, Money, Prices, and Wages in Valencia, Aragon, and Navarre, 1351–1500 (Cambridge, MA: Harvard University Press, 1936).
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20. The reasons for the salt price increase during the twentieth century may be due to the increased use of this good in industrial processes. Thanks to Bengt Berglund for this suggestion.
21. C. Knick Harley, ‘Ocean Freight Rates and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaffirmed’, Journal of Economic History 48, no. 4 (1988): 851–76.
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24. See also Harley, ‘Ocean Freight Rates’, 855–6; Menard, ‘Transport Costs’, 244–5.
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27. See also Gunnar Mickwitz, Aus Revaler Handelsbüchern (Helsingfors: Akademische Buchhandlung, 1938), 161; Jan Luiten van Zanden and Milja van Tielhof, ‘Roots of Growth and Productivity in Dutch Shipping Industry, 1500–1800’, Explorations in Economic History 46, no. 4 (2009): 394.
28. On the expansion of the iron trade to southern Europe see Karl-Gustav Hildebrand, Fagerstabrukens historia. Sexton- och sjuttonhundratalen (Uppsala: Almqvist & Wiksell, 1957), 132–47.
29. See also Mickwitz, Aus Revaler Handelsbüchern, 161.
30. Heckscher, Sveriges ekonomiska historia från Gustav Vasa, vol. I:2, 456–7.
31. Transportation costs are sometimes included, and sometimes excluded, in the concept of transaction costs.
32. Bo Franzén and Johan Söderberg, ‘Svenska spannmålspriser under medeltiden i ett europeiskt perspektiv’, Historisk Tidskrift 126, no. 2 (2006): 194.
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36. Stephan R. Epstein, Freedom and Growth: The Rise of States and Markets in Europe, 1300–1750 (London: Routledge, 2000); Jan Luiten van Zanden, Common Workmen, Philosophers and the Birth of the European Knowledge Economy. About the Price and the Production of Useful Knowledge in Europe 1350–1800. Paper for the GEHN Conference on Useful Knowledge, Leiden, September 2004.
37. Rodney Edvinsson, Growth, Accumulation, Crisis: With New Macroeconomic Data for Sweden 1800–2000 (Stockholm: Almqvist & Wiksell International, 2005), 80–3.
38. Johan Söderberg, ‘Long-term Trends in Real Wages of Labourers’, in Historical Monetary and Financial Statistics for Sweden: Exchange Rates, Prices, and Wages, 1277–2008, eds R. Edvinsson, T. Jacobson and D. Waldenström (Stockholm: Ekerlids and Sveriges Riksbank, 2010), 472–4; Allen, ‘The Great Divergence’.
39. Clark, England_1209–1914_(Clark).xls.
40. Moritz J. Elsas, Umriss einer Geschichte der Preise und Löhne in Deutschland vom ausgehenden Mittelalter bis zum Beginn des neunzehnten Jahrhunderts, Vol. 2A (Leiden: A.W. Sijthoff's, 1936), 263 and 553–6.
41. Robert C. Allen, Consumer Price indices, Nominal / Real Wages and Welfare Ratios of Building Craftsmen and Labourers, 1260–1913. http://www.iisg.nl/hpw/data.php#europe.
42. Hamilton, Money, Prices, and Wages, 52.
43. Jan Luiten van Zanden, The Prices of the Most Important Consumer Goods, and Indices of Wages and the Cost of Living in the Western Part of the Netherlands, 1450–1800 (2009). http://www.iisg.nl/hpw/brenv.xls.
44. Hamilton, Money, Prices, and Wages; Fernando Z. Palacios, Fluctuaciones económica en un período de crisis: Aragón en la baja edad media (1300–1430) (Zaragoza: Institución ‘Fernando el Católico’, 1994), 358–9. See also Spain_1351–1800.xls, Global Price and Income History Group, University of California at Davis. http://gpih.ucdavis.edu/.
45. Rodney Edvinsson and Johan Söderberg, ‘The Evolution of Swedish Consumer Prices 1290–2008’, in Historical Monetary and Financial Statistics for Sweden, 443–7.
46. Franzén and Söderberg, ‘Svenska spannmålspriser’, 189–214; Söderberg, ‘Prices and Economic Change’.
47. Clark, England_1209–1914_(Clark).xls; B.R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), 756–8, 763–5.
48. Gregory Clark, ‘The Long March of History: Farm Wages, Population, and Economic Growth, England 1209–1869’, Economic History Review 50, no. 1 (2007): 130–4; Lawrence H. Officer, What Were the UK Earnings and Prices Then? Measuring Worth (2008). http://www.measuringworth.org/ukearncpi/.
49. The period before 1500: Danmarks riges breve 4:7, 1399–1400. København: 2000; Birgitta Fritz and Göran Bäärnhielm, ‘Sveriges mynthistoria: Magnus Erikssons tid 1319–1363’ Stockholm University, WordPerfect file, No. 132b (1990); Schuldbücher und Rechnungen der Großschäffer und Lieger des Deutschen Ordens in Preussen. Bd 1, Großschäfferei Königsberg I (Ordensfoliant 141), ed. C. Hess, C. Link and J. Sarnowsky (Köln: Böhlau, 2008); Schuldbücher und Rechnungen der Großschäffer und Lieger des Deutschen Ordens in Preussen. Bd. 3, Großschäfferei Marienburg, ed. C. Link and J. Sarnowsky (Köln: Böhlau, 2008); Ivar Axelsson Totts räkenskapsbok för Gotland 1485–1487, ed. E. Melefors (Visby: Gotlands fornsal, 1991); Bronnen tot de Geschiedenis van den Ostzeehandel, 1:2, ed. H.A. Poelman ('S-Gravenhage: 1917), 799–831; ‘Svenskt Diplomatariums huvudkartotek över medeltidsbreven’. www.ra.se/ra/diplomat.html. For the sixteenth century Jorma Ahvenainen, Der Getreidehandel Livlands im Mittelalter (Helsinki: Societas Scientiarum Fennica, 1963), 129, 166 n 28, 168, 182; Artur Attman, Den ryska marknaden i 1500-talets baltiska politik (Lund: 1944), 143; Jean Denucé, Die Hanse und die Antwerpener Handelskompanien in den Ostseeländern (Antwerpen: 1938), 123–4; ‘Fraktböcker 1551–1558, Borgmästare och råd före 1636’, vol. 59, Stockholm City Archive; Carl-Fredrik Corin, Arboga stads historia från 1500-talets mitt till 1718 (Arboga: Arboga kommun, 1978), 143; ‘Fogdarnas räkenskaper 1529–1533’, f. 196, Riksarkivet; Ingrid Hammarström, Finansförvaltning och varuhandel 1504–1540: studier i de yngre sturarnas och Gustav Vasas statshushållning (Uppsala: Almqvist & Wiksell, 1956), 441; Handlingar rörande Finlands kamerala förhållanden på 1500-talet, 1 (Helsinki: 1892), 143; Historiska handlingar 40:1. Handlingar till Nordens historia 1515–1523, II:1, juli-december 1518, ed. L. Sjödin (Stockholm: Kungl. samfundet för utgivande av handskrifter rörande Skandinaviens historia, 1977), 244; Gunvor Kerkkonen, Borgare och bondeseglare. Handelssjöfart på Reval genom och i SV-Finlands skärgård under tidigt 1500-tal (Helsingfors: Suomen historiallinen seura, 1977), 35; Mickwitz, Aus Revaler Handelsbüchern 61–2, 149, 162 ff; Missiver fra kongerne Christern I.s og Hans's tid, 2 (København: Selskabet for Udgivelse af Kilder til dansk Historie, 1914), 90; Ingvar Peterzén, ‘Skeppet Svanens resa till Holland 1545’, Samfundet Sankt Eriks årsbok (1943): 64 and 67; Stockholms stads skottebok 1501–1510, ed. H. Hildebrand (Stockholm: Kungl, samfundet för utgifvande av handskrifter rörande Skandinaviens historia, 1915), 273; Räntekammarböcker 1532, f 44, Riksarkivet. For the seventeenth century: ‘Borgmästare och råd före 1636’, vol. 149, Stockholm City Archive; Börjeson, Stockholms segelsjöfart; Friedrich Bruns, Das Frachtherrenbuch der Lübecker Bergenfahrer, ed. A. von Brandt (Bergen: Hanseatiske museum, 1953); Christina Dalhede, Handelsfamiljer på stormaktstidens Europamarknad. 4, Viner, kvinnor, kapital: en 1600-talshandel med potential? Fjärrhandelsfamiljerna Jeronimus Möller i Lübeck och Sibrant Valck i Göteborg (Partille: Warne, 2006); Karl-Gustav Hildebrand, Falu stads historia 1641–1687 (Falun: Uppsala University, 1946), 297; Marescoe, Markets and Merchants; Leos Müller, The Merchant Houses of Stockholm, c. 1640–1800 (Uppsala: Acta Universitatis Upsaliensis, 1998), 145, 152 and 153; Albert Sandklef, Allmogesjöfart på Sveriges västkust 1575–1850 (Lund: Gleerup, 1962), 288; Georg Wittrock, Svenska handelskompaniet och kopparhandeln under Gustaf II Adolf (Uppsala: Almqvist & Wiksell, 1919), 90; Axel Zettersten, Svenska flottans historia åren 1635-1680 (Norrtälje: Norrtelje tidnings boktr, 1903). For the eighteenth century: Gösta Lindeberg, Svensk ekonomisk politik under den Görtzska perioden (Lund: Lund University, 1941), 161; Stockholms stads priscourant (Stockholm: 1705–1706, 1740–1774); Stockholmske Handels-Mercurius (Stockholm: 1736); Handelskollegiet, Protokoll, Stockholm City Archive.
50. There should be no data overlaps with the recent study of Dutch shipping by Zanden and Tielhof, ‘Roots of Growth and Productivity’.
51. Marescoe, Markets and Merchants.
52. This assumption is also made by Zanden and Tielhof, ‘Roots of Growth and Productivity’, 391.
53. Zanden, The Prices.
54. Douglass C. North, ‘The Role of Transportation in The Economic Development of North America’ in Les Grandes Voies Maritimes dans le Monde, XV e –XIX e Siècles (Paris: S.E.V.P.E.N., 1965), 235; Harley, ‘Ocean Freight Rates’, 873–4.
55. Edvinsson, Growth, Accumulation, Crisis, 86–7. See also Olle Krantz, Historiska nationalräkenskaper för Sverige. Transporter och kommunikationer 1800–1980 (Lund: Ekonomisk-historiska föreningen, 1986), 165–6.
56. Söderberg, ‘Long-term Trends in Real Wages’, 472–5; Svante Prado, ‘Nominal and Real Wages of Manufacturing Workers, 1860–2007’, 510–513, both in Historical Monetary and Financial Statistics for Sweden.
57. Rodney Edvinsson, Bo Franzén and Johan Söderberg, ‘Swedish Payment Systems 995–1534’, in Historical Monetary and Financial Statistics for Sweden, 106–113; Rodney Edvinsson, ‘The Multiple Currencies of Sweden-Finland 1534–1803’, in Historical Monetary and Financial Statistics for Sweden, 218–21; Karl-August Wallroth, Sveriges mynt 1449–1917: bidrag till en svensk mynthistoria meddelade i myntdirektörens underdåniga ämbetsberättelser (Stockholm).
58. MEMDB: Medieval and Early Modern Data Bank. http://www2.scc.rutgers.edu/memdb/index.html (accessed 26 January 2009); Lawrence H. Officer, The Price of Gold, 1257–2007 (MeasuringWorth, 2008). http://www.measuringworth.org/gold/.
59. Based on the household PPPs for the final consumption index. See OECD, 2005 PPP Benchmark Results. http://stats.oecd.org/wbos/Index.aspx?querytype=view&queryname=221, .10. The Netherlands index is based on International Institute of Social History, Value of the Guilder/Euro. http://www.iisg.nl/hpw/cpi-netherlands2007.xls, while the UK index is from Officer, What Were the UK Earnings.