In the olden days from which our modern economic world sprung, prices were usually long-term stable but short-term unpredictable. While the value of the currency unit – the amount of goods and services you could get for a given amount of funds, income, or wealth – held fairly stable over cycles and over decades, it could shift by 10% or more from one quarter to another. Harvests mattered; economic crises mattered; gold extraction and money demand mattered. The structure of labor and employment was also very different, as everyone from farmers and miners to pre-industrial weavers faced volatile prices for their outputs.
Importantly, they also faced uncertain output quantities. Piecework for a 19th-century weaver, inside or outside Britain’s emerging “manufactories,” was subject to fluctuations on both sides of the economic equation: price and quantity. Workers, too, faced uncertain labor opportunities and volatile working days, hours, and thus take-home earnings.
The 20th century is the odd-one-out in that labor arrangements overwhelmingly were standardized, pay adjusted to working hours rather than (or as a proxy for) output, and a macroeconomic environment focused on keeping even short-term prices stable and predictable (excepting the World Wars, various hyperinflations, and the Great Inflation of the 1970s).