[OPE] long waves

I'm not really convinced either. What I do know is that there have been eras
of faster and slower output growth rates and market expansion in the history
of industrial capitalism, lasting for an interval of time often close to one
generation (about 25 years or so). But the concept of "long waves" or "long
cycles" suggests a recurrent empirical pattern which can be explained with
the same kinds of variables, and that was also Ernest Mandel's idea: a
hausse in profit volumes which is eventually choked off by a falling profit
rate. That is much more difficult to prove, in particular because the very
way in which the profitability of enterprise has been regarded has changed
across time.

Mainly, the concept of the long waves was a convenient conceptual "peg" to
discuss the interrelationship of economic principles and economic history,
and how this was mediated by all sorts of socio-political factors. That is
more or less also how Leon Trotsky intended it, in his famous essay
http://www.marxists.org/archive/trotsky/1923/04/capdevel.htm . But in fact
the Communist International theoreticians were unable to predict accurately
even the shorter-term conjuncture: the postulated post-WW1 "decline of
capitalism" (Eugen Varga) was succeeded a few years later by the
announcement of the "stabilisation of capitalism" and a few years after
that, by the "decline after stabilization".

The odd thing in "long wave" theoretizations is that there is an almost
complete lack of demographic insight. For a simple example, in 1800, the
world population totalled circa 970 million, in 1850 there were circa 1.3
billion people, in 1900 some 1.5 billion, in 1930 2 billion, by 1950 2.5
billion, in 1975 4 billion, and since then the world population has reached
6.8 billion.

In Europe, the population doubled from circa 200 million in 1800 to 400
million in 1900, reaching 600 million in 1960, 700 million in 1985, and
stands at about 732 million today.

In the interval 2000 to 2005, 60% of the 383 million people born were born
in Asia, while the population of Europe actually somewhat declined.

This has had enormous implications for the growth of the labour market, the
expansion of final demand, the infrastructure of societies and the
distribution of incomes in different parts of the world - but in fact this
growth rhythm of the population doesn't easily map onto the fluctuations in
economic growth. You can easily get an indication of this for example by
plotting the differences between GDP growth and GDP per capita across long
time-spans.

Somehow the social coexistence of real people is mostly abstracted from in
economics.

Jurriaan

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Received on Wed Oct 14 08:57:08 2009