Short-Run Fluctuations in the Eighteenth Century

According to Figure 12.1 rye prices were fluctuating more than the other prices, and are thus an important factor in analysing short-term changes in a real wage index. Recent research has shown that already in the eighteenth century these frequent price changes were almost identical from one diocese to another, indicating that the Danish grain market was already a national market at that time.

Copenhagen, the largest Danish net importer in the whole of the kingdom, was situated on the Sound through which the major supplies to western Europe passed on their way from the Baltic surplus areas to the importing nations in the West (Johansen 1988). The Danish market was protected by the prohibition of imports in years with sufficient supplies and exports in years with a bad harvest. Since Norway normally got a large part of its rye imports from Denmark, shortage situations were more likely to influence the situation in the northern part of the monarchy, because Danish producers could secure sufficient domestic supplies by reducing shipments to Norway—and perhaps also to the Danish towns—and in poor harvest years the ban on imports was lifted.

This means that Danish prices reflected not only Danish harvest results, but were part of a larger supply/demand situation. Although the main relationship was that poor Danish harvests resulted in high prices, it was also possible that a bad harvest in western Europe and a better situation in the Baltic area, including Denmark, might result in large supplies from eastern Europe to the deficit areas, but at high prices because of the inelastic demand in the West. The tendency towards such equilibrating trade was probably rising during the eighteenth century.

Situation no. 4 in Table 12.2 is probably the most unlikely since this would only occur if there was easy access to ample imports in years with a poor Danish harvest. Among the other situations, it is only no. 5 which would be very detrimental to the whole of the society—in the other situations the majority would benefit from movements away from the normal because the inelastic supply and demand conditions would compensate for quantity changes by the price change. Situation no. 5 was, however, one that occurred rarely after the late eighteenth century because of the agricultural reforms.

In the analysis of short-term fluctuations, it also appears that a real wage index with the price of rye as the most important factor is unable to reflect the situation of the majority of the population.

Table 12.2 Influence of harvest results on the living standards of various segments of the population

6.