Kondratiev Cycles

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"In the middle of 1920. N. Kondratiev noticed certain recurring patterns in the changes in the economic situation of developed countries, which he called Large cycles, as opposed to small (Kitschin cycles) and medium (Juglar cycles) economic cycles, which were studied before. N. Kondratiev came to the conclusion that Large cycles consist of two waves (or phases of development): the upward one, where the economy is growing rapidly, and the downward one, where short-term phases of growth are accompanied by long periods of crises and stagnation.

The nature of these cycles N. Kondratiev could not determine until the end, since by the time of his research only two complete large cycles had passed, but he noted certain regular features of them and was able to predict on this basis the further development of the world economic situation up to the Great Depression.

Further research in this direction by many scientists and especially the work of the eminent American economist J. Schumpeter, the German scientist G. Mensch, the Russian economist S. Menshikov made it possible to formulate a general theory of large K-cycles, the main role in which the latest technologies and innovations play.

A major contribution to the study of the nature of K-сycles was made by academician S. Glazyev, who developed the theory of technological structures (TS), recognized as a scientific discovery. In 1993, in his monograph “Theory of Long-Term Techno-Economic Development”, he showed that innovations and new technologies do not develop uniformly and evolutionarily, but by discrete beams or clusters of integral complexes of technologically coupled industries, which he called technological structures (TS).

The 1 TS, in which textile machines appeared in order to complete the Industrial revolution, demanded the formation of the 2 TS: a steam engine and the transition from natural energy resources (water and wind) to coal, since the necessary labour force was concentrated in cities, and the production based on water and wind was being created in rural areas. In addition, the steam engine was more efficient than wind and water. The industrial revolution was formed by the 3 TS, which ensured the production of steel, electricity and chemical production, and the 4 TS, which gave the internal combustion engine, conveyor production and the transition to oil as the main energy resource.

At present, the world passes from the 5-th TS (which began in 1970–1980 on the basis of microprocessor technology, personal computers, the Internet, mobile communications, etc.) to the 6-th TS, which will complete the victory of the Information and Communication Revolution.

On the downward wave of the K-cycle, when the growth potential of the previous TS is completely exhausted, a cluster of basic technologies of the new TS begins to form. The formation of a cluster of basic technologies is accompanied by the development of improving and complementary innovations that contribute to the transition from the downward to the upward wave of the K-cycle, which leads to a strong growth of the world economy, which lasts, as a rule, a quarter of a century.

It is the formation and introduction of a new TS into production that leads to rapid growth of the economy on the upward wave of the K-cycle, and the exhaustion of the growth potential of the TS leads to a slowdown in the economy on the downward wave and a state that G. Mensh called “technological stalemate”, when the introduction of new technologies is actually suspended, and real innovations leading to the use of new more effective technologies are replaced by pseudo-innovations.

At the turn of XX — XXI centuries G. Arrighi, based on research by the French historian F. Braudel and principles of the world-system analysis, developed the theory of Systemic Cycles of Capital Accumulation (SCCA). F. Braudel drew attention to the fact that the centers of capital accumulation are constantly changing their geographical “registration”. In the middle Ages they were in the North of Italy, in the XVII century they moved to Holland, from the beginning of the XIX century — in Britain, and in the 20th century to the USA. These studies F. Braudel served as an impetus for the development of the theory of SCCA by G. Arrighi.

Since the main thing for capitalism is the infinite accumulation of capital, it is precisely the qualitatively special cycles of this accumulation that, according to G. Arrighi, have become milestones in the development of this system. In his monograph “The Long XX century” G. Arrighi identified four SCCA: Genoese-Iberian (XV — early XVII century), Dutch (mid XVII — late XVIII century), British (early XIX century — early XX century) and American (from the beginning of the 20th century). In his last work, “Adam Smith in Beijing”, G. Arrighi predicted the completion of the American SCCA and the coming of the Asian SCCA to replace it." (https://medium.com/@cryppix/mission-possible-7fe2129214fa)


Leo and Simone Nefiodow:

"The third Kondratieff was the first long cycle that was carried by the prac­tical application of scientific knowledge. The discovery of the electro-dyna­mic principle by Werner von Siemens enabled the conversion of mecha­nical energy into electrical energy, and the findings on the composition of matter through quantum physics imparted the knowledge of manipulating material – the foundation of modern chemistry.

The third Kondratieff ended with the global economic crisis of the late 1920s and early 1930s. The new upswing, the fourth Kondratieff, came with the automobile and petrochemistry. It marked the height of the industrial society and brought mass transit to the streets and to the air. The fourth Kondratieff drew to a close with the massive crude oil price increases by OPEC in the late 1970s.

The fifth Kondratieff began in the early 1950s. Its driving force originated in computer-based information technology. With constantly increasing speed, information technology permeated all areas of society and turned the world into a global village of information. During the fifth Kondratieff, the industrial society changed over into an information society. Since then, economic growth is primarily defined as growth in the information sector.

The fifth Kondratieff ended at the turn of this century. At the same time it ended, the sixth Kondratieff cycle began. The carrier of this new Kondratieff cycle will be health in a holistic sense.

The Sixth Kondratieff: At first glance, this statement may come as a surprise. Can health expenditures, which are economically classified as pure expenses and as something negative that should thus be avoided if possible, take on the role of a locomotive for growth and employment in the future?

At this point, we should recall the results of modern growth theory. Machi­nery, capital or jobs are only ostensibly the most important sources for economic growth. The main source for economy growth is productivity pro­gress. The sixth Kondra­tieff is carried by an improved productivity in handling health (a more detailed description of the sixth Kondratieff can be found on this homepage)." (https://www.kondratieff.net/kondratieffcycles)

More information

Graph 1: Previous Kondratiev waves: [1]

Graph 2: Succession of core cities: [2]