Empirical Evidence for Cycles within Capitalism
Discussion
CARLOS A. MALLMANN and GUILLERMO A. LEMARCHAND:
“The cyclical economical analysis for the capitalist period started with Clement Juglar in 1856. He emphasized periodicity in economic activity whereas most earlier writers had tended to interpret interruptions of growth as random financial crises. As early as 1884, William Stanley Jevons noticed the possible existence of “long- cycles” in prices and economic activity,he quotes an early work by Hyde Clarke, published in 1847, where the long-term economic fluctuations are situated within crises.
Although empirical evidences of long-waves in economic activity has existed since the beginning of the Industrial Revolution, there is still a big controversy, whether such waves are essentially consequences of the inner dynamics of economic growth, generated by random fluctuations or whether they are simply nonexistent. Van Gelderen was one of the first authors to make the hypothesis of long-cycles in economy and anticipated much of what was later “rediscovered” by N. D. Kondratieff whose classic work resulted in his name being associated with the phenomenon (usually known as K-waves).
In the 1940s, Rogers showed evidence for the existence of an economic 54-year rhythm from 1260 to 1940 in the wheat prices in England. Because wheat in its average value is closely associated with the price of commodities in general, it provides us with a rather useful index. His data clearly show 13.5 recurrences of a 54-year wavelength. Recently, Modelski and Thompson have taken a worldwide Kondratieff analysis still much further back and seek to identify these about 50-year long-cycles back to 930 AD. That makes the present long-cycle the 19th, and not just the 5th as most followers of Kondratieff would affirm. Others like Frank, Goldstein, Berry, Boswell and Misra, and Dassbach et al. believe that the present long-cycle is approximately the 12th. Modelski and Thompson find a set of four K-waves in Song China between 930 and 1250 AD. Extensive work performed by Marchetti, Nakicenovic, Grubler and Nakicenovic, Metz, and others show the existence of 50–60 year billows in a large set of different social and physical indicators.
The empirical results on economical recurrences seem to indicate that it is possible to distinguish at least three different groups of them, characterized by their average billow-length, namely:
(1) Long-waves or K-waves, with billow-lengths of approximately 48–60 years;
(2) Long-swings or Kuznetz-cycles, with recurrent processes of 20–24 years; and
(3) Business cycles, with different interpretations between 7–14 years.
In general, the so-called long-waves are presented as economic cycles because they were originally discussed by economists. Goldstein made an extensive analysis of the different arguments—in favor and against—presented by the traditional schools (e.g., capital investment, capitalist crisis, innovation, etc.). Marchetti showed that these waves extend beyond economics and that a more precise denomination would be Long-Term Pulsations in Social Behavior. Intuitively it is rather obvious that the appearance of these long-term patterns of social behavior are of an interactive nature.”