Volatility, integration and grain banks : studies in harvests, rye prices and institutional development of the parish magasins in Sweden in the 18th and 19th centuries

Sammanfattning: This study is the first to focus primarily on the Swedish parish magasins, the country’s most widespread credit institution in the last half of the 18th, and the first part of the 19th, century. During the Early Modern Period, grain price volatility was a matter of great concern. The parish magasins were conceived as a substitute for government action intended to stabilize grain prices and offer relief in case of crop failure. The thesis analyzes the problems of harvest variability and grain price fluctuations utilizing both theory and empirical evidence. It is concluded that market integration, especially by permitting imports, was more effective than inter-harvest storage in reducing the likelihood of high prices. Initially the peasants were sceptical of the new institution. Although the establishment of the magasinswas strictly speaking voluntary, substantial hierarchical pressure was applied. Once they had come into existence, however, the magasins evolved into a type of grain bank. The parishioners found them useful as a source of communal revenue at a time of rising need for local public expenditure for education and poor relief. In addition, the failure of the grain market to meet the needs of the peasantry created a demand for loans in kind. Although by no means ideal, in the absence of any superior institutions, themagasins provided valuable services. When improvements in both municipal finance and the functioning of the grain markets occurred in the second half of the 19th century, the magasins became obsolete. Both history and geography impact the formation of institutions. This study describes one such case of institutional development and attempts to explain why the outcome deviated from the original intention.