The Conundrum of Rising Prices in Hungary, 1900-1918

A paper presented at the History of Crisis Research Group seminar

Place and date: Eötvös University (ELTE), Budapest, 22 October 2015.

Mátyás Erdélyi (CEFRES & CEU) presented a paper on the public debate over the increase of consumer prices in Hungary between the turn of the century and the aftermath of the Great War. Although the phenomenon of rising prices, drágaság in Hungarian or Teuerung in German, seemed to affect all social strata, especially the urban population, there did not exist any consensus on how to define and measure it, who and what to blame, and how to remedy the situation before the turn of the century. Consensus, it seems, was only reached over the fact that the increase of prices was harmful to the existing social order and therefore had to be restrained. In this setting, first, the paper investigates how a monetary phenomenon, defined as such by most economic historians, could be conceptualized by contemporaries as a “social problem” that invited contributions from various experts, professionals, and academics, although with a clearly defined hierarchy of prestige and thus competence; second, it examines how the process of pluralizing the public debate led to a detrimental incapacity to find countermeasures on the part of the government.

Despite the fact that the economic reasons behind the inflationary cycles in 1910-12 and during the Great War were radically different, continuities in the attitudes towards the phenomenon and similarities in the argumentation of opposing camps suggest that the two inflationary cycles should be indeed treated together from the perspective of mentalities. What unites them are the unchanging patterns such as the omnipresent legal expert claiming that the economic account of inflation is poorly informed by legal theory and thus proves largely useless; that the “practical man” does not value abstract price statistics as “no business has ever been done at the average price”; or that most agrarians would portray small retailers as solely responsible for both deflation, before 1896, and inflation, after 1910, without feeling inconsequent. Moreover, one could recall Gyula Illyés’ novel that described pianos and tailcoats marching from the city to the countryside in exchange for eggs, grain or a half pig during the latter years of the Great War, all that as an emblem for the agrarian-mercantile conflict and oppositions like the urban-rural or the Christian-Jewish antagonisms.

Naturally, the problematization of rising prices as a social-political and not an economic issue had bothersome consequences during the Great War: for example, 1915 brought a supply crisis in blue vitriol, a substance seasonally needed in viticulture, and thus led to an extreme increase in retail prices that seemed to be constantly aggravated by the inadvertent reactions of the government. Here, the setting up of maximum prices, the centralization and portioning of the available supply, and the requisition of excess goods were all informed by the above mentioned oppositions and did not rely much on the opinions of “practical men” and experts in trade and economics. At last, in the decades after 1900 the example of “rising prices” shows us how an insoluble social problem could contribute to the crystallization of disciplinary boundaries by forcing our experts, professionals, and academics not only to understand but also to cure the social world, even though in this case, without being able to provide an ultimate solution.

A review written by Mátyás Erdély (FF UK & CEFRES).