Price and information. Whose Power? Lessons from the early 19th century

Z. Karvalics, László (2017) Price and information. Whose Power? Lessons from the early 19th century. In: Information and power in history, 2017 március 16-17, Amsterdam.

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Abstract

Trading and exchange of goods are playing more important role in human history, than their chapters in economic history books can imply and instantiate. Prices are regulating the market behavior, while price information generates the moment of decision making for every actors of the scene. In the mainstream history literature the velocity and exclusivity of price information transmission is a source of merchants’ power: the higher the price, the greater their benefits. James R. Beniger’s brilliant book (The Control Revolution, 1986) provides a sophisticated historical reconstruction of the 19th century paradigm shift: the rationalization of distributional control through different transition stages, like the factor/jobber system, new information platforms (Price Currents and early tele-distribution services), auction systems, fixed prices and price catalogs. „Better information, in short” as Beniger (1986:159) states, „meant better control of the distributional system by all actors involved”. But these improvements (and their „teleology” for higher possible prices) reveal themselves only on the level of purposeful actions, and within a cybernetic control/ communication conceptual frame. But it is also Beniger, who illustrates, that the new infrastructure of price-information created an integrated information ecosystem of actors, generating common rules, regulations and protocols, setting up new cooperation patterns. From this broader perspective shaping prices is always a part of an overall, metacybernetic control mechanism, which regulates the full material metabolism of interconnected people as social macrosystem, governing through hidden imperatives, derived from future planning priorities. The results of Uebele, Grünebaum and Kopsidis (2013:26-27) amazingly illustrate this correspondence. Observing price elasticity in proto-industrialized Saxony between 1790 and 1830, they found, that “demographic and socio-economic change was accompanied with defensive strategies by low income households to reduce the risk of hunger”. Storage decisions “were a mix of commercial and precautionary behavior”, based on both prices and harvest shocks – while prices were forcefully influenced by storage decisions.

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